It seems to have been my fate the last couple of weeks to write my column on borrrrring days. Really, Wednesday was hardly worth opening your eyes to look at. The Dow traded in a 48-point range which works out to what, less than half a percent, and the S&P500 and the Nasdaq toddled along much the same, although the S&P managed just barely to scrape to a new high.

If the market had only the Challenger job cut report and the ADP employment report, it might have been a mildly better day, as both showed improvements over the previous periods.

S&P500:

The Institute for Supply Management had a fair non-manufacturing reading for December, with output and employment up but new orders slowing.

DOW JONES INDUSTRIAL AVERAGE:

But the Federal Open Market Committee reported in the minutes of their last policy-setting meeting that they continue to be concerned about the housing market, among other things, and that kind of stalled the afternoon. Advancing issues and volume beat the decliners on the NYSE, but not the Nasdaq.

NASDAQ:

In any case, a few stocks deserve a mention above the fold, as they used to say in what used to be the newspaper publishing business (that's the top half of the page). For instance, Family Dollar Stores (FDO) had a fine day, along with some of its retail peers. The discounter said Wednesday that its fiscal first-quarter profit rose 14% on increased customer traffic. Net income climbed to $67.6 million or 49 cents a share from $59.3 million or 42 cents a year ago, beating estimates by 2 cents. Sales in the quarter, which ended Nov. 28, were up 3.9% to $1.82 billion; same-store sales were up 2.4%. Family Dollar, who owns more than 6,600 stores in 44 states, sees Q2 same-store sales rising 2% to 4% and per-share profit up 65 cents to 70 cents from last year's 60 cents, beating forecasts there too after December holiday sales turned out better than expected. The company even managed to widen gross margins by reducing freight costs and seasonal markdowns.

It's no mystery why discounters like FDO, Target, Costco and Wal-Mart have outperformed full-price retailers in the downturn: because when you and your spouse are worried about your jobs, you don't shop at Barney's or Harry Winston. Investors were all over the stock like wallpaper, sending it up over 11%:

FAMILY DOLLAR -- good place to go when you're worried about dough:

Dollar Tree (DLTR) also had a good day, up 2.35 or 4.95% to $39.91, Target (TGT) put on 70 cents or 1.44% to $49.93 and Costco (COST) was up 77 cents or 1.3% to $60. In fact, except for a sideways two-step last spring, the S&P Retail Index ($RLX) has had a stunning run almost straight up since March, gaining 81% to close today at $413.96.

Also announcing earnings was RPM International (RPM). The coatings and sealant maker reported a bigger-than-expected increase in Q2 profit of $55.9 million or 43 cents per share, up 34% from $41.7 million or 33 cents a year ago. Its net income and cash flow were at record highs despite a 3.5% decline in net sales, offset partly by acquisition growth. The company's industrial sales in international markets held up well despite a troubled global economy, and its consumer segment showed organic growth of over 3%. RPM too had extremely heavy volume, but on the sell side, despite raising its yearly earnings target from a high of $1.31 to a high of $1.45.

RPM INTERNATIONAL:

RPM's stock has more than doubled since March. As companies and consumers begin to spend more on repairs, renovations and redecorating, these shares could easily continue up. Another reason to like RPM is its healthy dividend of 82 cents or 4% at the current price. The dividend has been rising slowly but absolutely steadily since 1993.

Another industrial equipment provider, Fastenal (FAST), jumped to a 52-week high after an upgrade. Even though the nonresidential property market remains in a hole, one analyst likes the changes the company has made over the last year: a commitment to store openings, a 17% staff reduction and better inventory management all should stand the company in good stead as the economy creeps forward. Investors responded enthusiastically:

FASTENAL:

Fastenal, too, pays a dividend -- 74 cents annually, or about 1.6%.

Monsanto (MON), the world's biggest seed provider, said after the close Wednesday that it lost $19 million in the first quarter as global sales of its Roundup herbicide sank in the face of generic competition. The company's loss amounted to 3 cents per share versus a profit of $556 million or $1 per share a year ago; revenue fell to $1.7 billion from $2.65 billion, falling sharply in the chemical division and slightly in seeds. Roundup sales have been flagging for years and Monsanto has been shifting focus to its growing biotech seeds division; the company is betting its future on developing new patented crops with higher yields, greater pest resistance and more profits. This is very, very big business and Monsanto ha a full pipeline. The company has moved some dozen 11 new crops further to commercialization over the last year, including the first biotech seed developed for international markets, which have been slower to adopt the technology than the United States. The stock was up nicely on the day:

MONSANTO, from weeds to seeds:

On to Wednesday's economic reports, the most eagerly-anticipated of which was minutes of the last Federal Open Market Committee Meeting.

As expected, the Fed left interest rates unchanged at the record low 0% to 0.25% to stimulate borrowing and it’s hoped, growth. It was a very cautious report, raising no false hopes, but with a couple of glimmers of optimism. Out of consideration for my readers, I'll condense into a medium nutshell what the report told us the Fed more or less predicted at its December meeting:

Even more stimulus may be required . . . . We must watch the impact of the low, low dollar since it tends to raise the cost of the U.S.'s monster imports and could lead to inflation . . . . It may become necessary to increase purchases of debt instruments if the economy weakens any more, even though the current purchase programs is set to end in March . . . . There was some disagreement about ending the Fed's purchase of mortgage-backed securities: a few said they should think about buying even more; but at least one member said, in effect, Nonsense, we should stop buying right now and even think about selling back what we have (It wasn't the only area of debate) . . . . Layoffs are slowing and temp hiring is up, but firms aren't doing much hiring and unemployment will remain high (recall that in the previous meeting the Fed cut its unemployment projections), and tight credit, weak demand and a frail economy are still preventing employers from hiring . . . . Growth will strengthen over the next two years . . . But output won't be exciting . . . . . . . Commercial real estate will continue to deteriorate . . . . Inflation should stay below 2% throughout this year . . . . Real GDP will improve but recovery is still expected to be very sluggish . . . . Moderate economic growth strengthened in the fourth quarter and will continue through 2010 and into next year . . . . And there won’t be a bubble in asset prices.

So . . . . some faintly bright spots, but intractable unemployment along with tight credit and threats of inflation will remain the big shadows over the market and the economy in the months to come, trimming income and thus keeping a damper on consumer and capital expenditures. The report didn't have a perceptible effect on the markets.

MARKET INDEXES, Wednesday, Jan. 6:

On Wednesday the Institute for Supply Management released its non-manufacturing report for December. It was mixed. Output and employment are improving, it said, but new orders are slowing down. The "headline composite" rose 1.4 points from November to 50.1, for three months of growth out of the of the last four but indicating very little month-to-month change in overall activity for the bulk of the economy.

New orders, the sine qua non of business, fell month over month but at least it was the slowest decrease in four months. Reflecting previous gains in orders, the business activity component, the rough equivalent of a production reading, rose more than 4 points to 53.7. With production increasing, the employment index, though still below 50 to indicate month-to-month contraction, rose nearly 2.5 points to 44, which should raise expectations regarding Friday's payroll report. Both stocks and commodities took an immediate dip in response to the results. The ISM wisely doesn't try to cram all of this into a multi-line graph, opting for a succinct and helpful table:

ISM DECEMBER NON-MANUFACTURING RESULTS:

Respondents' comments varied by industry and were either slightly optimistic about business conditions, or neutral. For the record, the seven industries reporting growth in were agriculture, forestry, fishing & hunting; retail trade; other services; professional, scientific & technical services; public administration; health care & social assistance; and finance & insurance. The nine decliners were arts, entertainment & recreation; educational services; utilities; management of companies & support services; accommodation & food services; real estate, rental & leasing; transportation & warehousing; wholesale trade; and construction.

The Mortgage Bankers' Association, back at their desks, reported their index up 3.6% last week after dropping 4% in the Dec. week. The refinance index fell 1.6% last week after plummeting 30.5% in Christmas week, which doesn't count. (Can you really imagine somebody saying, "We couldn't afford to refinance the mortgage and buy Christmas gifts for the kids, so naturally we refinanced"?) Something new happened: The average 30-year mortgage rose to 5.18% in the latest week, up from 5.08%. There's concern that interest rates may begin to rise as economic growth picks up and the Federal Reserve winds down its purchases of mortgage-backed securities. Well, rates couldn't stay in fantasy land forever.

In some not-terrible employment news, payroll-processing mammoth Automatic Data Processing (ADP) said private-sector employers cut 84,000 jobs in December, the fewest since March 2008. Although higher than expected, It was the ninth straight month that job losses narrowed from the previous month. (The number of cuts in November was revised down to 145,000 from the previously reported 169,000.)

The service sector reported job growth for the first time in 21 months, with an increase of 12,000 jobs in December -- though that could be because of an expansion in temporary employment. The figure was offset by a loss of 96,000 in the goods-producing sector and a drop of 43,000 manufacturing jobs; we're still waiting for an upturn in employment at plants and on construction sites. Not a true fan of the happy ending, ADP said it expects the jobless rate to edge higher to about 10.25% during the first quarter of this year and linger for the next two years, hovering above 9% by the end of 2010 and higher than 8% at the end of 2011. Its results agree for the most part with the government's:

ADP/BLS UNEMPLOYMENT REPORTS:

As for planned job reductions, they fell in the fourth quarter to the lowest level in more than nine years, according to the tally kept by outplacement firm Challenger Gray & Christmas. Big U.S. companies announced 45,094 job reductions in December -- the fewest since the recession began two years ago. December's total was down 10% from November's 50,349 and down 73% from December 2008. In Q4, companies announced just 151,121 job reductions, the fewest since early 2000 and down 67% from the fourth quarter of 2008, Challenger said Wednesday. For all of 2009, big companies announced 1.288 million job cuts, up about 5% from 2008's total and the most since 2002. About 70% of the year's total occurred in the first six months of the year. Challenger considers it a "promising sign of fewer job cuts in 2010."

Layoffs slowed in the second half for most of the hardest-hit sectors, including retail (down 85% from the first half to the second), industrial goods (down 62%), autos (down 54%) and government and nonprofits (down 33%).

The Energy Information Administration said demand for gasoline and most distillates held steady at the same time that refinery output and imports rose. Result -- builds in most petroleum inventory readings last week. Crude stocks rose 1.3 million barrels with gasoline up a steep 3.7 million barrels; inventories of distillates dipped slightly. One interesting detail is a continuing rise in demand for jet fuel, this at a time when news out of the airline sector has been downbeat. Oil prices swung wildly in reaction to the results, first up about $1 to $82.40 and then down to as low as $81, closing the day around up 1.7% $83.18 a barrel, down from a new 52-week high of $83.52 and then about 40 cents lower after hours. The closely-oil-industry-tracking Powershares-DeutscheBank Oil Fund (DBO) was up, but how long can this vertical run last?

Powershares-DB Oil Fund (DBO):

Kraft Foods (KFT), much in the news lately with its persistent $16 billion hostile bid for British confectioner Cadbury, was up again today. To recap, the company is raising cash for the purchase by selling its very profitable North American frozen pizza business to Switzerland's Nestle. But not before Warren Buffet, whose Berkshire Hathaway (BRK-A) owns 9.4% of Kraft, said it opposed Kraft’s plan to issue up to 370 million new shares to support its Cadbury offer, thereby much diluting the stock. “The share-issuance proposal, if enacted, will give Kraft a blank check allowing it to change its offer to Cadbury — in any way it wishes — from the transaction presented to shareholders in the proxy statement,” Berkshire said. By selling the pizza unit for $3.7 billion in cash, Kraft raised money to increase the cash portion of its Cadbury offer, though it did not raise its overall price.

The company is under some pressure not to dilute the stock too greatly The final bid is due Jan. 19 and Kraft shareholders will vote on the new shares proposal on Feb. 1. (Note to Kraft CEO Irene Rosenfeld: My mother owns 300 shares and is voting No. Don't try to stop her.) Kraft has a significant and growing presence in China. Apparently the Chinese love Oreos and Tang, which they drink hot. The stock gapped up Tuesday on huge volume and inched up again Wednesday:

KRAFT FOODS (KFT)--Do we need Cadbury, says Buffet:

Commodities, which in general had a great 2009, moved up Wednesday. Natural gas contracts gained 6.2% to $6.01, gold was up 1.6% to 1,136.50 an ounce and zooming silver added 2.1% to $18.18 an ounce; precious metals were today's stars. Platinum, which plunged 66% from its record high of $2,273 per ounce in early 2008 to a low of $763 per ounce a few months later, has recovered by 104% to $1,556 per ounce.

Stillwater Mining (SWC) -- platinum and palladium are soaring:

The volatility/complacency indicator, the VIX, continues to edge below 20, its supposedly magic "Sell" number. But is it? Can the VIX continue to drop -- it closed today at 19.16, a 52-week low -- while the market moves higher? Sure it can. It's not common, but it's been done. Look at this graph for roughly January 2003 through mid-2008. The VIX fell below 20 on June 30, 2003 and the market kept getting higher. The VIX hit 15 in September of 2004, and the market kept getting higher. Finally, the VIX fell to 10 -- not a typo -- in early 2007. Then, several months later, only after the VIX has spiked up did the market realize where it was and like Wile E. Coyote suddenly discovering that he had walked right off a cliff, it fell with a thud. Moral: The VIX may be better at calling a bottom than a top.

THE MARKET CAN INDEED DEFY A FALLING VIX:

On tap for Thursday are jobless claims, the natural gas report and the Bank of England interest rate reports, which could be movers. There's more job news from the Monster employment index and retails news from chain store sales. All eyes will be on Friday's report of the employment situation.