By Clyde Noel

Stock Report

Believing in a Santa Claus rally at this time of year, requires as much imagination as believing in St. Nicholas. His rally didn’t arrive before Christmas, but we hope he arrives during the last five trading days of the year.

With the stock market off its all-time highs, December, in general, has been a good time to buy stocks because of Santa. Since World War II, Standard & Poor’s 500 index of stocks has gained an average of 2.09 percent in December.

History shows if Santa Claus doesn’t stop long enough for a couple of good trading days, the bears, instead of bulls, move in and take control.

We heard Santa’s bells three days last week when the Dow went over 10,000 again, but investors started selling stocks to capture gains and losses for tax reasons.

In the last five trading days of December, bargain-hunters typcially start snapping up stocks at cheap prices.

One sector Santa Claus is not stopping his sleigh for is the technology area. Stocks fell sharply last Thursday when Sunnyvale’s Juniper Networks rattled Wall Street with an earnings warnings.

Also negative for the market was President Bush’s revised plan to boost the U.S. economy.

Town Crier stocks taking a downside hit last week were: Applied Materials, Cisco Systems, Intel, Flextronics and Sun Microsystems.

Finding a good stock the last few days in December is like looking for a good wine to drink on New Year’s Eve. Unless you know what you’re buying, you may have to look at several before you find one.

-Noel, a seasoned investor, covers the stock market for the Town Crier.