Market Talk

Major stock indexes finish mixed, though the overall bias was slightly higher, with bulls continuing to churn out gains.

Both Nasdaq Comp and S&P 500 finish fractionally higher, while the Dow Industrials couldn’t quite shake a roughly 25-point negative drag from slumping shares of Boeing and American Express. Unimpressive volume, scarcity of fundamental drivers to influence direction, and likely to see something similar tomorrow as meaningful data (revised 3Q GDP, existing home sales) aren’t due until Wednesday.

Consumer staples end in red, while energy leads sector gainers. DJIA slips 13.78 to 11478.13, and Nasdaq Comp rises 6.59 to 2649.56. S&P 500 adds 3.17 to end at 1247.08.

Considering this grinding advance, some worthwhile perspective from Oppenheimer strategist Brian Belski, who notes stock gains appear “to have created a wave of bullishness among investors and analysts.” While he’s on board with positive view on equities, Belski notes his 2011 S&P 500 target of 1325 is now at the low end of consensus.

“From our perspective, most of the positive news has already been priced by the market and unless the economy begins to accelerate at a much faster pace, we think it will be difficult for the market to deliver another double-digit return year,” he writes.

Keep an eye on the pace of job growth, Belski says, “which we think will dictate this year’s economic growth rate and hence market performance – If jobs begin to grow faster than current expectations, we would likely adjust our targets higher and vice versa.”

Off to a slow start this week, but mulling over a couple things from this morning, including St. Louis Fed President James Bullard’s appearance on CNBC. Didn’t see the segment but read a write-up. Spoiler alert: there’s no Hoenig-like straight talk to be found here. Instead, we get this (from Dow Jones Newswires’ Mike Casey):

Asked whether the quantitative easing program, which has been dubbed “QE2,” was a factor behind the strong gains in commodity prices, he said the gains were most likely led by normal demand and supply factors and saw “no evidence” that Fed policy was behind it. However, he did say the relationship would need to be studied.

That “no evidence” part catch your eye, too? Thought it might. Reminded us of proclamations from certain Fed officials five or six years ago that there was no evidence of a housing bubble. Just like when the Fed says something’s “contained,” it probably isn’t; when they say “no evidence,” there’s probably conclusive evidence circulating. Why else would he admit the relationship between QE2 and commodity prices needs to be “studied”? Continue reading…

Path of least resistance continues to look higher for stocks, with premarket futures pointing up as we approach the start of a holiday shortened week. Tensions on the Korean peninsula weighed on Asian stocks overnight, but don’t seem to be much bother for European markets which show a solid advance.

Fair amount of economic data this week, but it’s packed into Wednesday and Thursday. Highlights include a third look at 3Q GDP, November existing and new home sales, durable goods orders and final gauge on Dec consumer sentiment.

S&P futures up 4.60; 10-yr higher, yield at 3.28%.