This Day On The Street
Continue to site right-arrow
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
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Market Preview: Big, Round Numbers

Stocks in this article: AAPL GE BAC COGO SPY

Updated from 8:12 p.m. ET to include after-hours action.

NEW YORK ( TheStreet) -- One after another, the big, round numbers continue to fall.

First, it was the Dow Jones Industrial Average busting through 13,000. The blue-chip index began the week at 12,922, and finished Thursday at 13,252.76. Bank of America (BAC) continues to lead the way, rising a stunning 59% year-to-date, including a nearly 16% surge this week to reclaim $9.

Then it was the Nasdaq Composite's turn. Being at levels unseen in more than a decade apparently wasn't good enough as the index, up an amazing 17.3% so far in 2012, now appears to have the tailwind of a potential M&A boom at its back. The Nasdaq blew past 3000 on Tuesday and hasn't looked back, closing Thursday at 3056.37.

And finally, today saw the S&P 500 cross the finish line of 1400. Its close at 1402.60 was the highest since early June 2008 before the financial crisis took hold. For added perspective, consider that Bank of America didn't close on its purchase of Countrywide Financial until three weeks later.

The index, widely considered the broadest measure of the health of the U.S. stock market, is now up 11.5% for the year, and looking fairly bulletproof. The all-time closing high of 1565 is less than 12% away though, so investors may want to prep for some profit-taking.

UBS, which has a year-end target of 1475 for the S&P 500, said Wednesday it thinks the liquidity-driven bounce in stocks is in the "late innings" and the firm is now looking for earnings to pick up the slack. It thinks corporations have likely wrung all they can out of margins and now expects topline growth to take over. In the fourth quarter, UBS said 6.5% of the earnings growth seen was from revenue, while just 2.2% came from margins.

"In many ways, the current recovery in corporate profits is quite typical," the firm said. "At the beginning of an earnings recovery, bottom-line growth is most often driven by margin expansion. As the economy improves, margins rebound, operating leverage wanes, and revenue becomes the primary catalyst driving earnings. As a result, EPS growth rates tend to moderate as the cycle naturally matures."

Of course, the biggest driver of corporate earnings of late has been Apple (AAPL), which breached its own big, round number on Thursday, making a brief foray above $600. The sprint from $500 to $600 took roughly a month from a close at $497.67 on Feb. 15, so it's not exactly a shocker that the shares couldn't hold the line on Thursday.

1 of 4

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

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
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
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!

Markets

DOW 17,778.15 +421.28 2.43%
S&P 500 2,061.23 +48.34 2.40%
NASDAQ 4,748.3960 +104.0840 2.24%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs