By Kate Gibson, MarketWatch
NEW YORK (MarketWatch) -- U.S. stock investors in the days ahead
may contend with managers' year-end positioning, with stocks coming
off two weeks of gains that pushed the S&P 500 and the Nasdaq
Composite to multi-year highs.
"Most of the things that people are anxious about are not going
to drive trade. There is the chance of a wild card for sure, but
don't know that any data or announcements where the stage isn't
already set," said Sandy Lincoln, chief investment strategist at
M&I Investment Management.
"We're getting to get into the end-of-the-year" trade involving
position squaring by portfolio managers and other investors,
Lincoln said.
Up 0.3% for the week , the Dow Jones Industrial Average (DJI) on
Friday gained 40.26 points, or 0.4%, to 11,410.32, its best finish
since Nov. 5.
Of the blue-chip index's 30 components, Bank of America Corp.
(BAC) and General Electric Co. (GE) fared best, with the former
tallying a weekly rise of 7.9% and the latter up 5.6% from the
prior Friday's close.
Conversely, Boeing Co. (BA) and 3M Co. (MMM) were hardest hit,
with the aerospace manufacturer losing 3.6% for the week and the
industrial conglomerate's stock falling 3%.
The S&P 500 Index (SPX) added 7.4 points, or 0.6%, to
1,240.40 on Friday to close at its highest level since September
2008. It rose 1.3% from the prior week's close.
The Nasdaq Composite (RIXF) on Friday rose 20.87 points, or
0.8%, to 2,637.54, its highest level since December 2007. The
tech-laden index tallied a weekly gain of 1.8%.
The week ended with signs a tax-cut package would pass the
Senate, helping push bond yields upward for another day, as
investors viewed the legislation as likely to boost economic growth
as well as the U.S. deficit.
The tax-cut deal would also extend benefits to the long-term
unemployed, while putting "a few more dollars in paychecks for
those who still have a job this holiday season," noted Standard
& Poor's analysts David Wyss and Beth Ann Bovino in a research
note.
Dividend time?
After a lengthy period of cash-hoarding by corporate America,
the recent week saw a spate of dividend hikes or talk of future
payments to shareholders.
GE, the country's biggest conglomerate, on Friday said it would
hike its quarterly dividend by 17% to 14 cents a share, with the
move the second hike in GE's payout to shareholders this year. The
dividend, however, is still well under the 31 cents in play before
GE slashed its dividend in 2009 as the maker of jet engines and
turbines rushed to save cash during the financial crisis.
Another large manufacturer, Honeywell International Inc. (HON) ,
also said on Friday it would raise its dividend, by 10%.
The head of GE Capital, the company's finance arm, told
investors during the week the unit expects to hike profit in the
next two years and restart dividend payments to its parent company
in 2012.
Honeywell is expected to lay out its financial targets in the
week ahead.
Western Union Co. (WU) also hiked its dividend last week, while
grocer Whole Foods Market Inc. (WFMI) said it would revive a payout
and Tyco International Ltd. (TYC) said it would ask for shareholder
approval to increase its dividend by 20%.
Earnings
In the week ahead, five S&P 500 companies are expected to
report four-quarter results, starting with retailer Best Buy Inc.
(BBY) on Tuesday. The remaining four reports are slated for
Thursday, and include Discover Financial Services (DFS), FedEx
Corp. (FDX), General Mills Inc. (GIS) and Oracle Corp. (ORCL)
The estimated earnings growth rate for the S&P 500 for the
final quarter of the year is 31%, with the financial, material and
energy sectors tallying the highest growth rate for the quarter,
according to Thomson Reuters analyst John Butters.
The Federal Reserve's Federal Open Market Committee meets
Tuesday. It's not expected to make any big changes to its $600
billion bond-buying program.
Economic reports ahead include data on November retail sales on
Tuesday, as well as the government's tally of those filing initial
claims for jobless benefits on Thursday. Friday brings leading
economic indicators for November.