NEW YORK (
) -- The markets edged up Wednesday on light trading.
Dow Jones Industrial Average
added 9.48, or 0.08%, to 11,585.38, while the
was up 1.42, or 0.11%, to 1,259.93. The
was up 4.05, or 0.15%, to 2,666.93.
Pete Najarian said on
's "Fast Money" TV show that he didn't read too much in what he called today's "market meltup." He said there were no dramatic moves, adding he was glad to see a little bounce in the Shanghai stock market.
Jon Najarian said the markets reacted positively to the bond auctions today. Todd Gordon, co-head of the research unit of Aspen Trading, said the significant support in the long and short ends of the bond market is signaling a rally in stocks, the dollar and bonds in 2011.
Steve Cortes noted on a technical level that buying gets aggressive every time the 10-year note rises above 3.4%.
Stephen Weiss predicted yields will rise higher in 2011 as the country tackles a shadow housing inventory that will be around for two to three more years in what he called a "homeless recovery."
Wall Street Journal
columnist Brett Arends said there were several things that made him nervous about the markets, including valuations, leverage and sentiment.
Arends said there is still much too consumer and corporate debt. He also was worried about the bullish sentiment in the market.
Shifting to silver, which has reached its highest levels in 30 years, Cortes said he carefully watches the silver/gold ratio because it's a good barometer for a stock rally. When there is strong demand for precious and industrial metals, there's a good chance of an S&P rally, he said.
Cortes sensed a bubble in the metals, especially with gold at $1,400 an ounce. "Would the wise men bring gold to baby Jesus at these prices?"
With financials up 10% in December and looking strong for 2011,
reporter Mary Thompson said banks will continue to do well through consolidation and loan growth. Jon Najarian added that regulations will prove costly for banks. Thompson agreed, saying regulations will drive consolidation, especially among smaller banks which will face a reduction in fee income.
In some brief comments on private exchange trading, Jon Najarian said he was wary of it. He said he didn't like the way the game was being set up, especially the lack of regulation. "It smells bad to me."
Simon Hobbs, the moderator of the show, noted that small cap stocks outperformed the broader market this year. He brought in Lance Helfert, president of West Coast Asset Management, to give his three small-cap picks.
, which he said has a strong grip on proxy processing, is slightly under $3 billion in market cap, does not too much debt, offers a 3% yield and could a great acquisition candidate.
He also liked
, calling it a great household name and a product that does well in good and bad times. Lastly, he liked
, which he said dominates its space, holding assets such as the House of Blues and Ticketmaster.
In a brief brother vs. brother segment, the Najarians took up the issue of high oil prices. Jon said he didn't think oil at $100 a barrel has become a headwind yet because people are still spending. He said that sentiment could change if oil goes above $100.
Pete said $100 oil translates into $4 for a gallon of gas and a psychological jolt for consumers. "It will present problems for the markets."
Commenting on ag stocks, Pete Najarian said the sector is hot, especially
, where there has been unusually strong options activity.
Shifting to the tweeter desk, Jon Najarian said there was a lot of discussion today about the sharp rise in rare earth element stocks. He said
is up 59% in the past five trading days, while
is up 11% this week.
In a followup on Pete Najarian's discussion Tuesday on investing in Russia, David Riedel, of the Riedel Research Group, interpreted Putin's move to ease restrictions on foreign investment in Russia as an effort to turn the page after a Russian court again convicted imprisioned oil tycoon Mihail Khodorkovsky, this time for stealing more than $30 billion in oil from his own company and laundering the proceeds.
Riedel likes the investment opportunities in Russia. He offered two picks in the cellular trade:
Mobile Telesystems OJSC
. He said both trade at nine times earnings, sport a 6% dividend yield and offer growth in the high teens.
In the final trades, Jon Najarian liked
. Cortes said he would short the homebuilders after his tell,
broke support. Gordon said he would sell Molycorp. Pete Najarian liked
. And Weiss liked
--Written by David Tong in San Francisco.
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