With the first week of the new year filed away, a positive January effect is still in play for 2011, as three major indices closed up for the week. For those who subscribe to "the January effect," the belief that a positive first month of an election year bodes well for the remaining 11 months, these first days are important. Some analysts even suggest that the close of the first week is even more important than where we stand on the 31st.
Lots of macro news propelled today's market to mixed results. The jobs report has U.S. unemployment down to 8.5% as more than 200,000 new jobs were added. Some of them were probably seasonal, but the number came in well above estimates and moved jobless claims to the best level in nearly three years. We also saw news that the Federal Reserve plans to set a target inflation rate while urging for fiscal policies to buoy the housing market. On the flip side, high yields for troubled eurozone countries Spain and Italy before next week's bond offerings continue to cause concern that the region's problems are far from solved.
With all of that going on, it is no surprise that we saw mixed performances on relatively thin volume. The Dow Jones Industrial Average
The mixed results were reflected inside the Dow as well. Three well-known blue chips turned in poor showings. The worst of the group was the world's third-largest aluminum producer. Alcoa
Second place goes to turbulent Bank of America
All told, it appears the market is continuing a positive trend to kick off the year. It's worth watching with a close eye to see how the market closes this week and this month, as well as whether past trends for January remain true.
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