This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Market Preview: A Double Recovery?

Updated from 6:04 p.m. ET to add information on after-hours trading.

NEW YORK ( TheStreet) -- The rally in the first few days of the new year proved too tempting to resist.

After months of outflows, mutual funds actually saw investors put money into equity funds last week. According to the Investment Company Institute, long-term mutual funds investing in stocks took in $1.43 billion in the week ended Jan. 11. Funds investing in U.S. stocks got $753 million, while international equity funds swelled by $681 million.

To put that in perspective, equity funds experienced outflows of $25.07 billion in the previous four weeks, and have been running negative overall since May.

ICI, which bases its numbers on data collected covering more than 95 percent of industry assets, said bond and hybrid funds (investing in both bonds and stocks) were still more popular, amassing inflows of $7.89 billion and $1.95 billion respectively, but it's still a sign that at least some investors are starting to back up the general bullish sentiment out there with their money.

Tomorrow is the first big earnings Thursday of the season with big names galore on the docket. It's very early, of course, but the fourth quarter is undeniably off to slow start, which is all the more concerning given the bar was set pretty low in the first place after 20% of the S&P 500 issued negative pre-announcements.

Through Tuesday, with 7% of the S&P 500 having reported, the blended (estimated and reported) earnings growth rate for the quarter sat at 5.5%, down from 7.9% on Jan. 3 and 15% on Oct. 3, according to Thomson Reuters data. Only 49% of the reporting companies have beaten expectations vs. a historical average of 70% in a typical quarter.

Again, it's very early but those numbers have to have bulls at least a little nervous. Stocks continued to chug higher on Wednesday though with the S&P 500 finishing above 1300 for the first time since mid-summer and the financials still surging, so investors haven't been all that bothered so far.

As for Thursday, Bank of America (BAC - Get Report), the last of the big money-center banks to open its books, is the headliner tomorrow morning. The shares have started 2012 with a gain of 17%, but that's probably done little to mitigate the anger of long-term holders who have seen the stock decline more than 50% in the past year.

1 of 5

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
SPY $212.25 0.52%
BAC $15.67 -0.13%
FFIV $123.18 0.64%
GOOG $565.06 3.30%
INTC $32.08 -0.83%

Markets

DOW 18,080.14 +21.45 0.12%
S&P 500 2,117.69 +4.76 0.23%
NASDAQ 5,092.0850 +36.0220 0.71%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs