Wall St likely to end 2009 with a flourish

Sunday, December 27, 2009
NEW YORK: Wall Street is likely to make a strong showing in the final week of 2009 as the bulls gear up to toast the first annual advance for US stocks in two years on hopes of more economic stability in 2010. The US stock market’s resiliency since the March bottom has put investors in the mood to celebrate.

The trading week will be cut short by the New Year’s Day holiday on Friday, when US financial markets will be closed. The S&P 500 is poised for what could possibly be its best year since 2003 — in sharp contrast to a year ago, when stocks plummeted in the fallout from the mortgage crisis and panic rocked investors, as 2009 got under way.

Even though no “all clear” has been sounded for the US economy, equity strategists said stocks were poised to add to recent gains next week and build a base for a solid start to2010 as optimism about the recovery grows. There’s an expectation now that economic indicators will keep showing improvements in key areas like housing and the labor market. “There’s an upward bias,” said Alan Lancz, president of Alan B. Lancz & Associates Inc, an investment advisory firm, based in Toledo, Ohio. “Economic numbers have been good. It’s been an ideal situation for equities as there aren’t that many other alternatives.



I think the smarter money is going into equities.” The benchmark Standard & Poor’s 500 Index started out November in a tight trading range. But by Christmas Eve, when stock trading ended early for the holiday, the S&P 500 had climbed to a 14-month closing high as investors bet the recovery will be strong enough to justify loftier stock valuations. US markets are closed on Friday for Christmas.