MARKET SNAPSHOT: As Goes January, So Goes The Year?

By Nick Godt

The market is set for a 7% drop in January, not boding well for the rest of the year, if one believes the old adage.

According to research from Quantitative Analysis Service, the month of January tends to predict the direction the market will take for the year accurately 65% to 75% of the times.

"That's not an impeccable record," says Ken Tower, market strategist and senior vice president at the firm. "But, along with April, it definitely has a better track record at predicting the year than any other month in the year."

The S&P 500 index (SPX), used by most investing professionals as a gauge of the broad market, is currently on track for a 7.4% drop for January.

LONDON MARKETS: Banks Rally, But Mining Shares Drag Index Lower

By Steve Goldstein

U.K. banks rallied on Friday, with a rise in mortgage approvals giving a modest boost to confidence, but losses from the mining sector dragged the top index to a lower close.

Barclays rose 5.8% and the Royal Bank of Scotland added 4.8% to conclude a wild week in the banking sector.

Approvals rose to 31,000 in December from 27,000 in November, though it still was the second-worst figure in history. Total net lending also rose.

"If these data continue to show an improvement in the flow of credit then this is tentative good news," said Alan Clarke, an economist at BNP Paribas.

After a volatile session, the FTSE 100 closed down 1% to 4,149.64, as markets took in a mixed reaction to economic data from the U.S.