Financial Headline News for Tuesday 1/3

HAPPY NEW YEAR!!! BEST OF LUCK IN 2012

1) Phil's Financial Tip of the Day:
It is that time of year again-Goal Setting.

Here is how I break down my goals each year by category:

1)As a father/mother/married/single person

2)Religious
3)Professional
4)Financial
5)Entertainment
6)Physical
7)Social

For your financial goals, focus on:

1) Building an emergency fund of 6 months.
2) Attacking your debts by paying off from lowest to largest amounts one by one or paying off debts from highest to lowest finance % one by one.
3) Contributing 15% to retirement only after the emergency fund of 6 months is complete and all debts are paid off in full.

2) In the Markets today:
Wall Street stocks kicked off 2012 with a rally on Tuesday after data showed U.S. manufacturing activity and construction spending picked up. The Dow advanced roughly 180 points.

Happy New Year: Stock indexes end up about 1.5%-From USA Today

Stocks ended higher Tuesday, the first trading day of 2012, after positive economic reports from around the globe.

The Dow Jones industrial average jumped nearly 180 points, gaining 1.5%. The S&P 500 ended up 19 points, gaining 1.6% and the Nasdaq composite rose 44 points, a 1.7% gain.

Banks and materials and industrial companies posted the largest gains. Bank of America (BAC) rose 4.8% and Caterpillar (CAT) 4%, were big winners among the 30 stocks in the Dow.

The gains were broad. All but one of the 30 Dow stocks, Johnson & Johnson (JNJ), were higher, and nine out of the 10 industry groups in the Standard & Poor's 500 index rose. Utilities, traditionally conservative stocks to own, were the only sector to fall.

In the latest sign of strength in the U.S. economy, manufacturing expanded in December at the fastest pace in six months. Construction spending jumped in November as builders spent more on single-family homes, apartments and remodeling projects.

Germany, Europe's largest economy, reported that the number of people unemployed last year was the lowest in two decades. And a Chinese manufacturing index rose in December, reversing a November slide and raising hopes that China's economic slowdown is under control.

January is traditionally a fairly good predictor of the year to come for U.S. stocks. In the past 83 years, the full year has taken its direction from the first month 60 times, said Howard Silverblatt, senior index analyst at S&P.

The first day is less useful, however. 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.

Tuesday was on the track to be the fourth straight year of market gains on opening day. On Jan. 3, 2011, the S&P rose 14 points, but the market finished the year almost exactly where it began. The S&P 500 finished down a sliver — 0.04 of a point.

The economic reports overshadowed, at least for a day, concerns in the global markets about the European debt crisis, which will probably be the main catalyst for markets in the weeks ahead.

Surveys showing that the economies of China and India may be picking up momentum are helping boost the mood of investors.

Earlier Tuesday, the government of debt-crippled Greece's warned that it would have to ditch the euro currency if it cannot secure a second international bailout worth $169 billion.

Investors have been afraid that a Greek exit from the euro currency union would further disrupt the Greek economy and cause heavy losses for European banks that hold Greek government debt, perhaps triggering a global financial crisis.

It's a busy week for economic data, culminating in Friday's closely watched U.S. December employment report. That often sets the market tone for a week or two, and investors will be keen to see whether the recent improvement in the U.S. economic news is evident in the jobs data, which tends to lag other economic indicators.

The consensus in the markets is that the U.S. economy generated another 150,000 or so jobs during the month — solid, if unspectacular, job creation in the world's largest economy.

Overseas, markets were mostly higher. In Europe, Germany's DAX was up 0.6%, but the CAC-40 in France was 0.8% lower. Britain's FTSE 100 index of leading British shares, which was closed Monday, was trading 1% higher.

Asian stocks rose earlier, with Hong Kong's Hang Seng Index jumping 2.4% to close at 18,877 on its first trading session of 2012. South Korea's Kospi index rose 2.7% to 1,875 and Australia's S&P ASX 200 gained 1.1% at 4,101. Benchmarks in Japan and mainland China remained closed for the extended New Year's holiday.

3) Top financial story of the day:
U.S stocks kicked off the new year with strong gains, as better-than-expected economic data around the globe buoyed investor sentiment. The Dow was at late-July levels.

US Factory Growth Shows Jobs Might Be Picking Up-From CNBC

US manufacturing activity-as well as employment in the sector-rose to its highest level since June, joining a series of economic reports that indicates Friday's jobs number may be better than some expect.

The growth in the ISM Manufacturing index also matches a global trend of improving factory activity in December from the month before. The ISM index rose to 53.9 from 52.7 in November and 50.8 in October. A reading above 50 shows economic expansion.

The employment component rose to 55.1 from 51.8 in November, the highest since June.

"Manufacturing might be a kind of small part of the employment picture, but it's consistent with some of the other indicators which should show it (December employment) to be a good report," Feroli said.

Feroli said he is currently expecting December nonfarm payrolls of 185,000, above the consensus 150,000. The report is released Friday morning.

Pierpont Securities Chief Economist Stephen Stanley said while he does not see the employment component of the ISM to be that predictive of jobs, he does see the improvement in the index as a measure that could reflect a better hiring environment.

"There've been a lot of encouraging signs over the last month or two. Claims numbers are lower, certainly. The confidence board indicators are better. That's something people look at, and it just seems anecdotally that things are getting better," Stanley said. "I think there's every indication the jobs market is improving."

He said he forecast nonfarm payrolls at 135,000 at December but expects to revise up his preliminary number.

"I don't expect any explosion in hiring over the next couple of months, but I think we'll keep looking at incremental gains," he said.

4) Quote of the Day from Dave Ramsey.com:
Each generation goes further than the generation preceding it because it stands on the shoulders of that generation. You will have opportunities beyond anything we've ever known. — Ronald Reagan