Daily Investment Interpretations
June 29, 2011
(Wednesday Night): The
markets soared for a third day in a row: S&P advances above 1,300,
. The NASDAQ
Composite was up 11.18
points (0.41%) at day's
end to 2,740.49. The Dow jumped 72.73
at 12,261.42; the S&P 500 gained 10.74
to end at 1,307.41. Oil climbed back up to $95.10; Gold
rose a little to $1,511: Some gold bugs think storm has passed. The VIX
Brett Arends writes about the Story behind the market's Ďboomí... namely, that during the booming first quarter of 2011, corporations were using their excess cash to buy up corporate stock, but corporate insiders weren't buying. ""
ď'While insiders are willing to use corporate cash to try to support the value of their stock-based compensation, they donít seem to think their stocks are attractively priced,' Biderman said. Where did the companies find the money to buy back their stock? In some cases the money came from profits. Thatís a good thing. But in other cases they just borrowed the funds. According to the latest data from the Federal Reserve, corporate debt surged again last quarter ó to the highest levels on record... When a company borrows money to bolster its own stock price, it makes me wary of the bonds. When the executives arenít even willing to invest their own money, it doesnít exactly make me enthusiastic about the stock either."
Stocks are up slightly tonight.