With high unemployment , fears of Fed tightening and worries about Europe’s sovereign debt casting a pall over the market a year ago, I went shopping for stocks. As I said then, I didn’t want to be distracted by interesting but extraneous issues of global finance, focusing instead on the bread and butter of stock investing: revenue and earnings.
I’m glad I did. Stocks have rallied since then, with the Standard & Poor’s 500-stock index up 25% through Thursday. The five stocks I recommended last year (and bought myself) were Amazon.com ( AMZN ) , United Therapeutics ( UTHR ) , Under Armour ( UA ) , Salesforce.com ( CRM ) and Chipotle Mexican Grill ( CMG ) . This may be the best portfolio I’ve ever picked: As a group, they have more than doubled, gaining a collective 111%.
Today investors are still fretting about high unemployment, the prospect of higher interest rates and Europe’s debt crisis. So I figured it was a good time to revisit my methodology, both to reassess last year’s picks and come up with some new recommendations.
Stocks declined at the end of a lackluster week as investors already on edge about global growth became concerned that China could take steps to brake its economy’s expansion.
The Dow Jones Industrial Average fell 90.52 points, or 0.80%, to 11192.58, its lowest level since Nov. 2, the day of the U.S. Congressional elections. The Dow fell 2.2% for the week.
Stocks have surrendered all of their gains since Republicans seized control of the House of Representatives and the Federal Reserve announced its much-anticipated bond-buying program.
The Nasdaq Composite fell 37.31, or 1.46% to 2518.21. The Nasdaq shed 2.4% for the week, ending a string of five consecutive weekly gains. The Standard & Poor’s 500-stock index fell 14.33, or 1.18% to 1199.21 on Friday, also breaking a five-week winning streak.
Asian markets fell on Friday as concerns resurfaced that the Chinese government would further tighten monetary policy to counter inflation.
The benchmark Shanghai Composite Index fell 5.2%, erasing nearly a quarter of its three-month upswing. Read more…
U.S. stocks eked out a slim gain, after minutes from a September meeting of the Federal Reserve increased confidence that the central bank will take further action to stimulate the economy.
The Dow Jones Industrial Average gained 10.06 points, or 0.1% to close at 11020.4. The Nasdaq Composite added 15.59 points, or 0.7% to 2417.92, and the Standard & Poor’s 500-stock index advanced 4.45 points, or 0.4% to 1169.77.
After a morning in the red, stocks turned positive Tuesday after minutes from the central bank’s September meeting showed officials’ discussions focused on buying more Treasurys or on new strategies for inflation if prices remained too low and unemployment too high. The minutes also disclosed that the Fed’s staff cut the projections for economic growth in 2011 and expected the underlying inflation rate, already below the central bank’s informal objective, to slow further next year.
“What the Fed said today didn’t surprise anybody,” said Bill Vaughn, portfolio manager at Evercore Wealth Management.
Stocks sank deeper into the red in late trading Wednesday, as a decline in financial stocks more than offset a boost in oil prices and energy stocks.
The Dow Jones Industrial Average lost 48 points, or 0.5%, to 10807, while the Standard & Poor’s 500-stock index shed six points to 1142 and the Nasdaq Composite dropped eight points to 2371.
Speculation that the Federal Reserve will take further steps to spur the economy has pushed the dollar lower in recent days. The U.S. Dollar Index, which measures the greenback against a basket of six currencies, hit its lowest level in eight months Wednesday.
Investors remained focused on any possible Fed action, as a small handful of Fed officials delivered speeches throughout the day.
By Kristina Peterson
NEW YORK—U.S. stocks advanced, as economic data took the edge off deflationary fears and earnings reports from Home Depot and Wal-Mart raised hopes that consumer spending was stabilizing.
On track to snap its five-day streak of declines, the Dow Jones Industrial Average was recently up 51 points. Investors who had flocked to bonds amid the recent flood of disappointing economic data on Tuesday headed into stocks as data suggested deflation may not be imminent.
“There’s been such a run to Treasurys and hiding under a rock because deflation was such a worry,” said Bill Stone, chief investment strategist at PNC Wealth Management. Tuesday’s rise in July U.S. producer prices—the first increase in four months—helped ease those concerns, he said.
The Dow gained 0.5% to 10353. The Nasdaq Composite rose 0.8% to 2200. The Standard & Poor’s 500-share index climbed 0.7% to 1087.
Consumer companies climbed after earnings from two key retail giants boosted hopes that consumer spending may still be helping to support the economic recovery.