Money & Investing – Banks.com

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Traditionally for Wall Street, the week between Christmas and New Year is marked by a modest climb upward known as the “Santa Claus rally“. This rally is an end-of-the-year pick-me-up that many investors look forward to. The Associated Press reports on the Santa Claus rally:

“It’s pretty much like clockwork,” says Jeff Hirsch, editor of the Stock Trader’s Almanac, which tracks market trends. “And when it doesn’t happen, it can be a very helpful warning of impending trouble.”

This year the stock market began December in somewhat typical fashion with a stagnant first half of the month. The Standard & Poor’s 500 Index is up just 0.6 percent so far in December, and the Dow Jones industrial average is down 0.2 percent.

That leaves room for the market to snap back by the end of the year, although stocks are still facing headwinds from lingering doubts about the economy as well as trepidation among investors about the huge gains logged so far this year. The S&P is already up 22 percent in 2009, the Dow 18 percent.

And it appears that the bulls are ready to go today, as well. Modest gains are being seen today in the stock market, as the Dow sees 40 more points as we approach mid-day. Investors are acknowledging that the downward revision to third quarter GDP is somewhat discouraging, but the revision isn’t horrible, and other news makes up for it. Existing home sales surged in November, and that is providing a catalyst for measured optimism.

There are still questions about the U.S. economy, and its chances for recovery, but at the same time, things seem to be going reasonably well, and the bulls are looking forward to a solid end to the year.

Disclaimer: I am not an investment professional. Nothing in this piece or on this Web site should be construed as investment advice. Before making investment decisions, do your own research and/or consult with an investment professional. All investment comes with the risk of loss. You are responsible for your own investment decisions and any loss that may result from your decisions.