WALL STREET GETS NICE START; DOW RISES NEARLY 180 POINTS
NEW YORK — The stock market got a big jump on a better year.
After a flat 2011, stocks rose sharply Tuesday in the first trading of 2012 after investors returned from a $2.25 billion joint venture the holiday and found enlast year for some of Chescouraging economic reapeake’s acreage in North ports from the United Texas’ Barnett Shale. States and around the
“Total is delighted to be world. building on our technical The Dow Jones indussuccesses with Chesatrial average rose 179.82 peake in the Barnett Shale points, or 1.4 percent, to joint venture and to ex12,397.38, its highest close pand into the liquids-rich in more than five months. Utica Shale play in Ohio,” The Standard & Poor’s said Yves-louis Darricar500 index, a broader gauge rère, president of Total Exthan the Dow, finished up ploration & Production. almost 20 points at 1,277. “This is consistent with The S&P finished 2011 alour strategy to develop pomost exactly where it sitions in unconventional started — down a sliver, plays with large potential 0.04 of a point. and, in this case, with valThe market may have ue predominantly linked to gotten an extra boost from oil price. what’s known as the Janu
“This joint venture will ary effect: Investors sell provide us with a material stocks at the end of the position in a valuable year to lock in losses for tax long-term resource base purposes, then come back under attractive terms and in January and buy stocks with a top-class operator.” again.
Chesapeake seems to be The effect could be perfecting the art of findmore pronounced this year ing venture partners to because the stock market help develop its acreage in was so volatile in 2011 and emerging resource plays. more investors had losses
The latest Total deal to take, said Sam Stovall, marks the seventh time chief equity strategist at Chesapeake has secured a Standard & Poor’s Capital Iq.joint venture.
Mcclendon said ChesaMoney managers also peake has sold about 1.5 usually get a fresh infusion million net acres for $14.8 of cash at the beginning of billion in those deals, while the year because workers retaining about 3.6 million who maxed out their conacres worth $45.7 million, tributions to retirement as indicated by its venture accounts well before the partners. previous year ended start contributing again.
These investors are back hunting for bargains, he said: “Investors are a lot like dieters and look to January as a new beginning.”
January is a fairly good predictor of the year for U.S. stocks. Only seven times since 1950 has January turned out to be a “major error” in predicting the year to come, according to the Stock Trad- er’s Almanac.
In other words, whichever direction the market has gone in January, the rest of the year has usually followed.
The “major errors” are usually extraordinary events, the almanac points out. In 2001, for example, the S&P 500 rose 3.5 percent in January, but the market was rocked by the Sept. 11 attacks and fin- ished the year down 13 percent.
The first day of the year is less useful for fortunetelling than the first month. If you were to bet on whether the market would finish the year up or down based on how it performed the first day, you would be right only about half the time.
And there’s no special power to January. A strong market in any single month makes it more likely that the market will be higher over the 12 months to come, Dan Greenhaus, chief global strategist at the brokerage BTIG, pointed out in a note to clients.
“As goes any month, so goes any 12-month