Put on Your Market Rally Caps

XCSFDHG46767FHJHJF

tdp2664 InvestorPlace Eight trading sessions have now passed since the stock market bottomed on Oct. 3. How are we doing? Good enough! So far, it doesn’t look like March 2009 all over again. The figures we’re getting for breadth and volume don’t point to an explosive surge like the one that kicked off the bull market 31 months ago, but that kind of shock-and-awe firepower isn’t necessary for the market to stage a vigorous year-end rally. Let’s enjoy the uptrend as much as we can, for as long as we can. Peering ahead into 2012, I suspect that Europe’s woes, combined with a marked growth slowdown in China, will create persistent headwinds for global bourses — including our own. However, there seems to be enough positive news flow, for now, to lift the S&P 500 back into the 1,250 to 1,275 range over the next two to three months. With a little extra luck, the S&P might even make it back to 1,300. That would be optimistic, though. So, we’re talking about fairly modest upside from here. To play it, I suggest buying safe, defensive stocks with generous dividends. They’re likely to hold their ground best when the market climate cools again — as it probably will before the end of next year’s first quarter. Earnings Reports On Wednesday, PepsiCo (NYSE: PEP ) reported sales and profits that neatly topped Wall Street estimates. Operating net per share jumped 10% versus the year-ago period, despite the company’s well-publicized struggles with rising commodity prices. I love PEP’s strategic thrust into more nutritional product lines, including hummus, salsa and dips. According to a new study by the Robert Wood Johnson Foundation, companies that produce better-for-you foods also generate superior long-term financial results. It’s rare among food-and-beverage stocks to find one trading close to the same P/E ratio it fetched at the major bottom in early 2009. Yet PEP fits that description. Current yield: 3.3%. Keep buying the shares at $65 or less — a slightly lower limit reflecting my cautious outlook for the market beyond Jan. 31. What about banks? JPMorgan Chase (NYSE: JPM ) put out a decent set of Q3 numbers Wednesday, but to no avail. Investors focused on litigation expense and a drop in investment-banking revenues — two factors that might drag on JPM (and other big banks) for a couple more quarters. JPM, like Bank of New York Mellon (NYSE: BK ), undoubtedly will survive the current banking shakeout and emerge stronger than ever. I own a big chunk of both stocks and have no intention to sell. The plump, safe dividends paid by both