US Stocks Poised For Positive January

(MarketWatch) - US stocks in the days ahead are positioned to continue what so far was a robust January, a month that tends to serve as a reasonable predictor of how the rest of the year will pan out.

"It's nice to have these gains to start the year off, as statistically, it tends to bode for a better year when you have a strong January," according to Hank Smith, chief investment officer at Haverford Investments.

On Friday, the major indexes notched a third straight week of gains, with the Dow Jones Industrial Average rising 96.50 points, or 0.8 percent, to finish at 12,720.48, up 2.4 percent from the week-ago close.

In the week ahead, investors will wade through quarterly results from more than 100 large-cap stocks, including Apple, Yahoo, McDonald's, Ford, Boeing and Netflix.

They also will get word from the Federal Reserve about policymakers' interest-rate expectations, after a two-day meeting; more housing data; and an estimate of fourth-quarter economic growth.

"We've had a strong January, which is definitely an indication that expectations are starting to turn around," according to Marc Pado, US market strategist at Cantor Fitzgerald.

Smith agreed, saying the current market stability is somewhat in defiance of expectations. "Had you polled almost any investor at the beginning of the year, they would have said volatility would have ruled," he said.

The adage "so goes January, so goes the year," stems from the January barometer devised by the Stock Trader's Almanac, which found the S&P 500's performance during the month to be a reasonably decent predictor for the year ahead.

The benchmarks are up between four percent and seven percent for the month to date, with seven trading days left to go.

"We're right in the heart of earnings-reporting season, with a ton more earnings to go next week," Smith said.

The S&P 500 Index added nearly one point, or less than 0.1 percent, to end Friday at 1,315.38, up two percent for the week, while the Nasdaq Composite shed nearly two points, or not quite 0.1 percent, to close at 2,786.70, up 2.8 percent from the prior Friday's finish.

Read more: MarketWatch