The Nasdaq rose above 3,000 for the first time since December 2000. The extraordinary move was helped by Apple (NASDAQ: AAPL), which makes up a large portion of the index’s value. But shares of the companies of most other sectors have rallied. Tech stocks in general have risen. So have many shares in retail and biotech firms. Many analysts claim that 2012 is nothing like 2000, when the Internet bubble pushed the Nasdaq above 5,000 briefly. Then it took only a year for the index to drop below 2,000. Of course, earnings are strong until they are not. Tech companies face the same reality of gravity that all other companies do. Valuations will get higher than investors can stand as the index continues to rise. The Nasdaq may not remain above 3,000 for long.

The Buffett Tax

A new Reuters/Ipsos survey shows that about two-thirds of Americans favor what has become known as the “Buffett tax.” This tax would set a minimum tax rate of 30% on people who make over $1 million a year. The poll does not break out the results from individuals who make more than $1 million a year. The sample size may have been too small for that. If they could be measured, their opinions likely would be different from people who make $50,000.

Bank Stress Tests

Most of the stress tests of the nation’s 19 largest banks showed that the firms have adequate capital to survive an economic event similar to the financial crisis of 2008. One exception was Citigroup (NYSE: C). Citi had over two years to get its house in order. This included selling or segregating bad businesses and the elimination of 50,000 jobs. Many of the building blocks added to the financial supermarket by “founder” Sandy Weill have completely disappeared. The bank’s management must be humiliated. And Citi will have to renege on its near-promise to return money to investors via a higher dividend or stock buyback.

Gas Prices Up Again

Gasoline prices nationally, based on the cost of a gallon of regular, increased ever so slightly again yesterday to $3.811. That is up from $3.805 a day ago and $3.511 a month ago. A recent poll from Gallup showed that most Americans would curtail consumer spending if regular gas reached $5.30. But, for about a third of Americans, that figure is $4 or lower. Economists wonder when gas prices will begin to hit the economy. The Gallup data is a pretty good measure.

Douglas A. McIntyre

Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.