If you’re wondering when investors would start caring more about their Christmas plans than their portfolios — we may now be there.
Stocks did close higher on Wednesday, but the conviction and ability of traders to push the market significantly higher — evidenced by the winnowing trading volume and tight trading range of the day’s session — may have to wait until after the holidays.
Still, traders leveraged to index funds will take their portfolio appreciation any way they can get it, and to their minds, there’s nothing wrong with tagging on another two- or three-tenths of a percentage point onto their stellar year-end gains.
The S&P 500 Index set another two-year closing high, finishing at 1259, up 4 points, or 0.3%. The Dow Jones Industrial Average was up 27 points to 11,560 and the Nasdaq rose 4 points to 2672.
For those scoring at home, that’s now a 6.6% rise in December for the S&P, essentially delivering half the market’s 2010 upside.
As was seen Tuesday, financials continue to lead the rally. The Financial Select Sector SPDR (NYSE:XLF) exchange-traded fund finished up 1% to $15.98 — a closing level not seen since May. Shares of Bank of America (NYSE:BAC) climbed 3.2%, while JPMorgan Chase finished 3% higher.
Regional banks also continued their recent climb — the SPDR KBW Regional Banking ETF (NYSE:KRE) jumped 4% to $26.88.
The dollar and commodity markets were essentially nonevents, with gold and silver prices taking a small step back.
But the newsflow was not without some economic fodder for those increasingly wondering what kind of rally can continue next year after a runup of almost 25% since early July.
Specifically, various housing market data were mixed at best. The National Association of Realtors did announce that existing home sales in November rose to 4.68 million homes, above the awful 4.42 million in sales in October. However, that’s still nearly 28% off the cyclical peak in November 2009.
Other “bright” spots for housing on Wednesday included news that mortgage applications fell 19%, while refinancings were down 25%. Throw that into the mix with a still-high nine-and-a-half month housing inventory and a report by the Dallas Fed that 3.6 million homes, or 2.7% of the total housing stock, are vacant or being held off the market.
For now, however, the imminent holidays are keeping reality checks at bay.
