The S&P 500 Index rose about 17% in 2010, a good year by any measure. That rise apparently indicates that investors’ appetite for risk is growing. But is that actually the case?  TD Ameritrade Holding Corp. (NASDAQ: AMTD) reported earnings this morning of $145 million, or EPS of $0.25, on net revenue of $656 million. That matches analysts’ expectations on EPS and surpasses revenue estimates of $648 million. Charles Schwab Corp. (NASDAQ: SCHW) also reported earnings this morning, with net income totaling $119 million, or EPS of $0.10, on net revenue of $1.13 billion. Analysts had been expecting EPS of $0.10 on revenue of $1.11 billion.

E*Trade Financial Corp. (NASDAQ: ETFC) is scheduled to announce fourth quarter earnings next week, and analysts are expecting EPS of $0.04 on revenue of about $323 million.

Both TD Ameritrade and Scwab reported sequential increases in new business during the fourth quarter. TD Ameritrade reported 164,000 new accounts, up from 125,000 in the third quarter, but down fro 180,000 in the fourth quarter of 2009. Schwab reported 225,000 new accounts in the quarter, up from 168,000 in the third quarter, and also up from 202,000 in the same period a year ago.

During the month of November, trading volume at online brokerages reached its highest level since the “flash crash” In May. According to the US Bureau of Economic Analysis, US personal savings fell to $614.8 billion in November, down from $622.8 billion in October.  So either consumers were spending more on holiday gifts or they were investing more, or both.

Retail spending was up for the 2010 holiday season, but not by as much as hoped. The evidence from the brokerage firms is that retail investors do seem to be coming back as the equity markets continue to post steady gains.

The US savings rate has fallen from a recent peak of about 7.3% in 2009 to about 5.3% at the end of 2010. Demand for goods and services, as measured by unemployment figures, is growing very slowly. If consumers were buying more stuff, businesses would have to hire more workers to produce the stuff. But that’s not happening yet.

What is happening is that equities are growing nicely, and more retail investors are moving back into the markets. TD Ameritrade shares recently posted a new 52-week high, but that was the result of speculation about a possible link-up with E*Trade. For the past year, TD Ameritrade’s shares have posted a gain of about 10%, while both Schwab and E*Trade have posted share price drops of about -3% and -7%, respectively.

TD Ameritrade received a downgrade from ‘outperform’ to ‘market perform’ from BMO Capital last week, so that’s cooled some enthusiasm for the shares today as well. The company’s shares are trading down about -0.8% shortly after opening. Schwab shares are down about -1.4%, and E*Trade shares are off -1.5%.

Paul Ausick

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