Browse archives: 2007 | 2006 | 2005 | 2004 | 2003 | 2002 | 2001 | 2000 | 1999 | 1998 | 1997 | 1996 | 1995

Published on 12/29/1999 All articles from this issue

Will the Santa Claus rally hold?

printer friendly version

By Clyde Noel

Stock Report

The Santa Claus rally put a lot of indexes in record territory last week, but don't bet your portfolio on St. Nick. The raging bull market is rewriting history and distorting time-honored market theories along the way. Not all indices are bullish, because Alan Greenspan is going to have his say on interest rates next month.

The Nasdaq composite index crossed 4,000 for the first time last week, the Dow Jones industrial average leaped into a record close, and the Town Crier Stock index continued to increase it's profit margin.

The Town Crier Index doubled its money with a week to go before the end of the year. Since Jan. 1, the index increased 100.93 percent. The $50,000 invested in the market Jan 1, now totals $100,465, with a return of $50,465 profit. Each company listed in the Town Crier Index has a major executive living in Los Altos or Los Altos Hills.

It's hard to single out one company since most issues had healthy increases last week, but you can't overlook Yahoo! with a 52 point increase and up 239 percent for the year.

Last week, three Town Crier Index companies split their stock 2 for 1, They are: BEA Systems, Flextronic Int. and Network Appliance.

Companies typically split their stock to increase liquidity and make it easier to buy a lot of 1000 shares. An investor may not be able to buy 1,000 shares of BEA Systems stock at 140, but may consider buying 1,000 shares at 70.

The Santa Claus rally usually begins in the last five trading days of the year and carries over into January's first two trading sessions, setting the tone for the market.

The tech-heavy Nasdaq is up 81.07 percent since Jan. 1, and The Dow Jones industrials are up 24.22 percent. The stock market may ring in records during the week between Christmas and New Year's, but analysts say the party could get crashed by interest rate worries in January.

Longer term, there is anxiety about the raft of economic data to be released in January. Most economists predict the U.S. economy will continue to be strong, but investors fear the Federal Reserve will raise interest rates by 25 or 50 basis points when the monetary policy panel meets in February.

Clyde Noel covers the stock market for the Town Crier.