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Economic Data (USA)

Wednesday, December 28, 2005

All 3 Majors Gain As Inversion Fears Wane and Gold Surges

All 3 major indices gained today as investors responded to positive consumer confidence news and to news that the 10-year U.S. Treasury Bond yield is once again higher than the 2-year bond yield (10-year is now 4.37%, and the 2-year is now 4.36%.)

The price for gold continues to surge as demand from both investors and jewelry makers remains strong. Investors are hot for gold because the numbers don't lie: if you had invested $10,000 in gold at the beginning of 2005, your investment would have proven more profitable than most stock investments and all bond investments. Gold is also popular because many investors believe that central banks around the globe--most notably China--may purchase gold in the near future as a way of diversifying state assets. New York Spot Gold closed up @ $513.80 per once today.

Energy stocks performed well on news that OPEC may cut production levels in order to stabilize prices. Exxon-Mobil gained $0.38 to close @ $56.25 per share, while Valero Energy added $0.97 to close @ $51.87 per share, and shares of Amerada Hess rose by $3.82 to close @ $126.57. NYMEX Crude Future is currently $59.82 per barrel.

Whole Foods Market Inc., America's biggest natural foods chain, performed very well today on news that the company is to be listed on the S&P 500 Index of stocks. Stock in Whole Foods rose by $3.67 to close @ $79.10 per share. To put this news into perspective: Standard & Poor's decided not to add Google to the S&P 500.

Stock in Celgene Inc. rose by $3.37 to close @ $60.85 per share. A JMP Securities analyst predicts that sales of the anemia drug Revlimid may go as high as $700 million by 2008.

The Board of Directors @ Guidant Corp. have recommended that shareholders vote "yes" to Johnson & Johnson's proposed $21.5 billion takeover bid. Guidant rose by $0.45 on the news to close @ $65.14 per share, while Johnson & Johnson gained $0.12 to close @ $60.42.

Today's Numbers:

DJIA: Closed Up @ 10,796.26 (+18.49)

NASDAQ: Closed Up @ 2,228.94 (+2.05)

S&P 500: Closed Up @ 1,258.17 (+1.63)


NYMEX crude oil future closed @ $59.82/barrel

New York Spot Gold closed @ $513.80/ounce

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