COMMENTARY | COLUMNISTS | GEORGE CHAMBERLIN

George Chamberlin's Money in the Morning

The rush to the record continues. The Dow Industrials tacked on another 72 points yesterday, pushing the blue chip index to within 210 points of its all-time high. The close at 13,954 was the highest since Oct. 15, 2007. To put that in perspective, the record close of 14,164 was set just a few days earlier on Oct. 7, 2007. Yesterday’s rally came despite a report showing consumer confidence fell to the lowest level since November 2011. People were soured by the increase in Social Security taxes, which went into effect this month and will reduce their take-home pay.

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So, with the Dow and S&P 500 closing in on record highs, what's the headline at MarketWatch.com? "Dow ... 13,000?" is the way the bearish boys and girls there celebrate the rally they have repeatedly told us is bogus. The day MarketWatch.com goes bullish would probably be a great time to start selling stocks.

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The markets got hit this morning with news of a drop in the nation's economy in the fourth quarter. The government report showed the GDP -- the total of all goods and services produced in the United States -- fell 0.1 percent in the last three months of 2012 as the result of a huge drop in defense spending, down 22.2 percent from the previous quarter. However, two other readings in the GDP were surprisingly good. Consumer spending rose 2.2 percent and spending on housing was up 15.3 percent. The media reports on the GDP said the overall decline was "surprising" as a survey of economists had predicted an increase of 1.1 percent. However, any economist paying attention would have known defense spending would be down in the quarter enough to offset any areas of growth.

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A bit more encouraging is the first in a series of reports on employment. ADP announced private sector payrolls rose by 192,000 in January as small businesses (115,000) and medium-sized businesses (79,000) accounted for all of the increase. Large employers, those with more than 500 workers, saw payrolls actually decline by 2,000 in the month.

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Another jobs report, the Intuit Payroll small business index, showed companies with 20 employees or less added 20,000 jobs in January. However, both hours worked and monthly pay for small business employees declined in the month. "Given the continuing high level of unemployment, we can expect little to no impact on small business wages and employment levels from the return of the employment payroll tax to its previous level of 6.2 percent," said economist Susan Woodward.

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Would you like a Twinkie with that bottle of beer? It appears Hostess Brands -- the bankrupt maker of Twinkies and other bakery snack foods -- has selected two potential buyers for its products and manufacturing facilities. One of the investment firms, C. Dean Metropoulos, is also the owner of Pabst Brewing. Hostess will present the offers -- expected to be around $400 million -- to the bankruptcy court next week.

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Speaking of pastries, it looks like you'll be able to visit a Dunkin' Donuts in Vietnam before you'll get one in California. The company announced this morning it has selected a franchise operator to develop the brand in places such as Ho Chi Minh City. Dunkin' announced recently it is seeking a business partner to develop its coffee and doughnut operations in California but it is unlikely any stores will be opened here before 2015.

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