A federal mortgage deal with banks over mortgage fraud would give states enforcement power. (Reuters)

Sony (NYSE: SNE) expects a $2.9 billion loss. (Reuters)

Long-term investors continue to reject investments in long-term Italian bonds. (Reuters)

The House votes to extend a pay freeze for federal employees. (Reuters)

Deutsche Boerse and NYSE Euronext (NYSE: NYX) will consider alternatives now that their merger has collapsed. (Reuters)

The size of Facebook’s IPO would top Google’s (NASDAQ: GOOG). (WSJ)

January car sales rose 11% to the fastest pace in four years. (WSJ)

AMR will cut 13,000 jobs. (WSJ)

Deutsche Bank posts a loss. (WSJ)

Pfizer (NYSE: PFE) recalls a number of birth control pills. (WSJ)

Samsung says a German court rejected an Apple (NASDAQ: AAPL) request to stop the sales of Galaxy tablets and Nexus phones. (WSJ)

States with energy exploration businesses did well during the recession while manufacturing states are still struggling. (WSJ)

Many in Congress have rejected Obama’s new mortgage relief plan. (WSJ)

Disagreements between Germany and the IMF have slowed Greek bailout talks. (WSJ)

Kodak wants out of a deal that puts it name on the location where the Oscars are held. (WSJ)

Whirlpool’s (NYSE: WHR) cost cuts helped drive its profits. (WSJ)

Regulators are worried that a marketing deal between Verizon Wireless and Comcast (NASDAQ: CMCSA) would be anticompetitive. (WSJ)

EU regulators may back down on plans to make banks keep large amounts of safe assets. (WSJ)

Spain announces plans to improve its troubled bank sector. (WSJ)

Petrobras (NYSE: PBR) sold $7 billion in bonds, near a record for emerging market companies. (WSJ)

A deal over Greek debt raises concerns that a rescue of Portugal will follow. (NYT)

Large U.S. companies have raised money at record low rates. (FT)

CDS on both corporations and sovereign debt show less concern about financial troubles. (Bloomberg)

The number of people who filed for unemployment benefits in Spain during January reached a record. (Bloomberg)

Douglas A. McIntyre

The unofficial closing bells put the DJIA down nearly 21 points to 12,632.91 (-0.16%), the NASDAQ rose nearly 2 points (0.07%) to 2,813.84, and the S&P 500 fell -0.05% or less than 1 point to 1,312.40.

There were several analyst upgrades and downgrades today, including Nike Inc. (NYSE: NKE) raised to ‘buy’ at Argus; Potash Corp. of Saskatchewan (NYSE: POT) cut to ‘neutral’ at Goldman Sachs; Tesla Motors Inc. (NASDAQ: TSLA) started as ‘buy’ at Jefferies; Amgen Inc. (NASDAQ: AMGN) reiterated as ‘buy’ and target price raised to $80 at Argus; and Range Resources Corp. (NYSE: RRC) raised to ‘hold’ from ‘sell’ with a target price of $59 at Canaccord Genuity.

Earnings reports since markets closed last night have led to some price changes as of the last half hour of trading today: Anixter Inc. (NYSE: AXE) is down -3.7% at $65.25; ARM Holdings PLC (NASDAQ: ARMH) is up 1.7% at $28.84; Celanese Corp. (NYSE: CE) is down -0.95% at $48.84; Eli Lilly & Co. (NYSE: LLY) is up 1.35% at $39.78; Exxon Mobil is down -1.98% at $83.80; Helmerich & Payne Inc. (NYSE: HP) is up 2.2% at $61.64; L-3 Communications Holdings Inc. (NYSE: LLL) is up 1.3% at $70.49; McGraw-Hill Cos. Inc. (NYSE: MHP) is down -0.5% at $46.09; Mattel Inc. (NYSE: MAT) is up 5.1% at $31.04 after posting a new 52-week high today of $31.49; Pfizer Inc. (NYSE: PFE) is down -0.8% at $21.42; and Valero Energy Corp. (NYSE: VLO) is down -0.73% at $24.10.

Other standouts from today include the following stocks:

Vringo Inc. (NASDAQ: VRNG) is up nearly 21% at $1.40. The social media software maker is apparently basking in the glow of the coming IPO of Facebook. See our coverage here.

RadioShack Corp. (NYSE: RSH) is down nearly -30% at $7.19 after setting a new 52-week low of $7.15 earlier today. The social media software maker is apparently basking in the glow of the coming IPO of Facebook. See our coverage here.

Verifone Systems Inc. (NYSE: PAY) is up more than 8% at $42.61. The payment systems maker is getting a boost from a plan by Mastercard Inc. (NYSE: MA) to subsidize the installation of new card readers that use a microchip rather than a magnetic stripe to store customer information.

Rare Element Resources Ltd. (AMEX: REE) is up more than 17% at $7.22. The rare earth minerals miner is likely gaining after a ruling from the WTO that China’s restriction on rare earth minerals’ exports violates global trade rules.

FriendFinder Networks Inc. (NASDAQ: FFN) is up about 19% at $1.26. The adult social media company is likely also being bought up on the prospective Facebook IPO.

Stay tuned for Wednesday. Automakers will be releasing sales figures for January throughout the day. We have noted the following events on the schedule (all times Eastern):

• 7:00 a.m. – Mortgage Bankers Association purchase applications
• 7:30 a.m. – Challenger Job-cut data
• 8:15 a.m. – ADP employment report
• 10:00 a.m. – ISM manufacturing index
• 10:00 a.m. – Construction spending
• 10:30 a.m. – EIA weekly petroleum status report

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Paul Ausick

As far as 2012 is concerned, Pfizer is targeting $2.20 to $2.30 earnings per share, which is slightly under prior targets and is currently compared to a Thomson Reuters consensus of $2.28 EPS.  The new 2012 guidance for sales is $60.5 billion to $62.5 billion versus a prior range of $62.7 billion to $64.7 billion.  The Thomson Reuters consensus is $2.30 EPS for this coming year.

The company noted:

• Its Primary Care unit revenues were favorably impacted primarily by foreign exchange;  growth from Celebrex, Lyrica, Pristiq and Spiriva, among others; and the addition of $93 million, or 2%, from legacy King products…
• Negatively impacted by the loss of exclusivity of Lipitor and Caduet in Nov-2011 and Aricept in Nov-2010; Together, those losses reduced Primary Care unit revenues by $775 million, or 13%, versus fourth-quarter 2010.
• Emerging Markets unit revenues were negatively impacted by foreign exchange and increased pricing pressures.
• Animal Health unit revenues rose 13% due to the addition of legacy King products as well as strong performance in the global livestock portfolio.

Pfizer has been trading up and down in the early hours of the pre-market and shares are up 0.3% at $21.65 on last look against a 52-week range of $16.63 to $22.17.

JON C. OGG

We have provided estimates from Thomson Reuters on each and offered commentary and guidance on some of these companies.  More detailed previews will be available Tuesday morning for the reports due after the closing bell.  The current previews are below:

Amazon.com Inc. (NASDAQ: AMZN) has seen shares back off of highs and the stock is down more than 20% from its year high and all-time high.  The estimates are $0.19 EPS and $18.2 billion.  The Kindle will be a huge focus, but the concern is that the company has been allowing its margins to get crushed far to much for far too long.

ARM Hldgs PLC (NASDAQ: ARMH) is key now that it powering so many smartphones, finally living up to its ambitions of the last decade.  As a reminder, these earnings are translated from British Pounds, and estimates are $0.14 EPS and $193.3 million in revenues.

Biogen Idec Inc. (NASDAQ: BIIB) is effectively the second largest pure biotech company and it finally outperformed in 2011.  Estimates are $1.49 EPS and $1.29 billion in sales.  The new screening test to determine if MS patients using TYSABRI are at risk of developing PML has been undercovered by our take.

Broadcom Corporation (NASDAQ: BRCM) was recently given a huge and successful pop after a Jim Cramer tout.  Estimates are $0.65 EPS and $1.8 billion in sales.

Exxon Mobil Corporation (NYSE: XOM) has a relatively low bar set after Chevron’s earnings stank up the place last week.  Thomson Reuters has estimates for the DJIA component of $1.95 EPS and $119.7 billion in sales.  Keep in mind that revenues are not as widely covered as earnings per share.  Estimates have ticked down by $0.03 in just the last few days.

Pfizer Inc. (NYSE: PFE) is going to show just what happens to earnings with Lipitor now being off-patent.   Pfizer has estimates out there of $0.47 EPS and $16.61 billion in revenues.

Seagate Tech Inc. (NASDAQ: STX) has already risen off of guidance but the Thai flooding and PC flux right now create ongoing wild cards.  The disk drive maker is expected to post earnings of $1.07 EPS and $3.14 billion in revenues.

United Parcel Service Inc. (NYSE: UPS) is expected to report earnings of $1.26 EPS on sales of $14.45 billion.  We will be looking for additional information on past price hikes in the new climate.

United States Steel Corporation (NYSE: X) recently announced that its production in Slovakia was returning to a 5-day week from a 4-day week due to demand and after labor agreement negotiations.  The estimates are a large loss at -$0.84 EPS on $4.73 billion in sales.  While it has bounced, U.S. Steel is still down by half from a year ago.

Valero Energy Corporation (NYSE: VLO) is holding up better than we would have guessed if you have watched refining margins of late.  Estimates are for a loss at -$0.17 EPS on $32.3 billion in sales.

JON C. OGG

The companies we’ve included are Pfizer Inc. (NYSE: PFE), Merck & Co Inc. (NYSE: MRK), Bristol-Myers Squibb Co. (NYSE: BMY), Teva Pharmaceuticals Industries Ltd. (NASDAQ: TEVA), Amgen Inc. (NASDAQ: AMGN), and GlaxoSmithKline plc (NYSE: GSK).

Pfizer Inc. (NYSE: PFE) trades around $22.00 and the 52-week range is $16.63 to $22.00. With a $168 billion market cap, this one trades at about 15-times expected earnings and 9.5-times expected 2012 earnings. Thomson Reuters has a mean price target objective of $23.76, indicating implied upside of 8%.

Merck & Co Inc. (NYSE: MRK) trades near $38 and the 52-week range is $29.47-$39.00. With a $117 billion market cap, Merck trades at about 28-times expected earnings and 10-times expected 2012 earnings. The mean price target objective is $39.85, indicating a potential upside of 4.9%.

Bristol-Myers Squibb Co. (NYSE: BMY) trades near $34 and the 52-week range is $24.97-$35.44. With a market cap of about $58 billion, this one trades at about 17-times expected earnings and 17-times forward earnings. The mean price target objective is $32.91, indicating that shares are fully valued and upside potential has gone missing.

Teva Pharmaceuticals Industries Ltd. (NASDAQ: TEVA) trades at about $44 and the 52-week range is $35.00-$57.08. With a market cap of $39 billion, Teva trades at about 13-times earnings and 8-times forward earnings. The mean price target objective is $53.15, indicating an implied upside of nearly 21%. The company has also seen gains since disclosing a new CEO.

Amgen Inc. (NASDAQ: AMGN) trades at about $66 and the 52-week range is $47.66-$65.70. With a market cap of $58 billion, this one trades at about 16-times earnings and 11-times forward earnings. The mean price target objective is $65.45, and, like Bristol-Myers, Amgen is fully valued and there is no implied gain at the current price.

GlaxoSmithKline plc (NYSE: GSK) trades at about $44 and the 52-week range is $36.28-$46.50. With a market cap of $221 billion, this one trades at about 44-times earnings and 13-times forward earnings. The mean price target objective is $49.58, indicating an implied upside of 12.7%.

Only Teva and GlaxoSmithKline have double-digit upside potential percentage gains. Of the two, Teva’s upside potential is greater, largely because it just lost a patent dispute (which pushed the share price down) and gained a new CEO, an industry veteran from Bristol-Myers (which pushed the share price back up). The downside on the company is that it is trading down about -18% over the past 12 months, the only one of these six companies to show a loss for the period.

Glaxo is preparing a regulatory filing in the US with a replacement for the company’s Adair asthma drug which loses patent protection next year. Late-stage trials have been promising, and the stock could get a nice boost if the FDA grants approval. Glaxo also received three new drug approvals from the FDA in 2011,

Paul Ausick

Amgen’s current dividend is 2.3%, which is rather high for a biotech stock. It also should be noted that the $64.00 price is above the stock’s old former rangebound levels of $50.00 to $60.00. Pfizer currently yields 3.7%, but that is about to rise to closer to 4%, and Merck yields about 4.50% after its dividend hike.

The question for 2012 is simple: Which biotech stocks will be among the second waves to initiate paying a dividend? By our count, these are the biotech outfits that might entertain following Amgen’s dividend path: Biogen Idec Inc. (NASDAQ: BIIB), Celgene Corporation (NASDAQ: CELG), Alexion Pharmaceuticals, Inc. (NASDAQ: ALXN), Cubist Pharmaceuticals Inc. (NASDAQ: CBST), PDL BioPharma, Inc. (NASDAQ: PDLI), Regeneron Pharmaceuticals, Inc. (NASDAQ: REGN), and Vertex Pharmaceuticals Inc. (NASDAQ: VRTX).

We would have evaluated the chances of Gilead Sciences Inc. (NASDAQ: GILD) initiating a dividend, but this $11 billion proposed buyout of Pharmasset, Inc. (NASDAQ: VRUS) is likely to keep Gilead tied up for quite some time.

Alexion Pharmaceuticals, Inc. (NASDAQ: ALXN) is close to all-time highs above $70 and is now worth a whopping $13.2 billion. Estimates are $1.30 EPS for 2011 and $1.66 EPS for 2012, making this one have a much higher valuation while it is still rapidly growing. Some investors may expect that it could start paying out a dividend, but it is too soon by our take today, even with a $445 million balance of cash and liquidity with almost no long-term debt.

Biogen Idec Inc. (NASDAQ: BIIB) has estimates of $5.89 EPS in 2011 and $6.31 EPS in 2012. The company had only about $3 billion in cash and investments at the end of September versus a current market cap of about $27 billion. 2011 was the year that investors decided to give up on worrying about the very rare PML cases in TYSABRI, and that allowed Biogen shares to rise almost 60% in 2011. If Biogen decides to get off the no-dividend bandwagon soon, we would only look for an initial payout of $1.00 on an annualized basis for a while.

Celgene Corporation (NASDAQ: CELG) may still be too new of an earnings story to start expecting a dividend. The earnings estimates are $3.80 EPS in 2011 and $4.51 EPS in 2012. With almost $2.6 billion in cash and investments, its market cap is larger than Biogen’s at $30 billion.

Cubist Pharmaceuticals Inc. (NASDAQ: CBST) managed an incredible breakout year as its drugs treat hospital-borne infections, with nearly a 100% share price gain in 2011. The market cap is now about $2.45 billion, and it had nearly $1 billion in cash and liquidity before a recent $221 million acquisition versus about $450 million in long-term debt. Cubist probably could start to pay a dividend if it wants to, but the company has decided to be an acquirer rather than hoarding cash or going defensive. Chances are that it may need to hold on to its cash while it absorbs Adolor and anything else it is considering.

PDL BioPharma, Inc. (NASDAQ: PDLI) has been a dividend payer from its patent royalties, but some payments have been one-time payments until its most recent $0.15 payout for each of the past four quarters. The company also recently forecast a 5% revenue drop and investors are already braced for lower royalty payments. The company recently lost its CFO after only about three years on the job and we really do not like to see CFOs leave biohealth companies. Estimates are $1.18 EPS for 2011 and $1.38 EPS in 2012, but it has about $225 million in cash and liquidity versus a market cap of $867 million. The company may just stick with its current payout structure’s high yield as is until (or if) it can secure another large patent license.

Regeneron Pharmaceuticals, Inc. (NASDAQ: REGN) is worth some $5.1 billion or so in market capitalization and is fresh off the news that it settled with Genentech over U.S. opthalmic sales of the eye drug EYLEA with a patent case still brewing, but with Regeneron agreeing to pay out $60 million if sales reach $400 million and it will pay royalties out as well. With cash and liquidity of near $500 million at then end of September we think it is a bit premature to ask this one to start shelling out its cash to shareholders yet, considering it is still expected to have a wide loss in 2012.

Vertex Pharmaceuticals Inc. (NASDAQ: VRTX) is so far off of highs now that it seems unlikely investors are expecting much on the dividend front. The company is back on the path of growth after some changes and stumbles, and now its market cap is almost $7 billion. With this one it just feels too soon to expect any dividends in reality. We could analyze all we want, but its new revenue growth is challenged by a cash balance of just over $800 million versus $400 million in long-term debt. What is interesting is that Vertex’s $0.30 EPS expected for 2011 is expected to be $4.55 EPS in 2012. It had a loss of $3.77 EPS in 2010. Maybe after another year or so we can evaluate its future dividend strategy.

After reviewing the great biotech sector’s larger components, it sure does not sound like many other than Biogen Idec Inc. (NASDAQ: BIIB) are really new prime-time dividend candidates for 2012, other than the high payout of PDL BioPharma, Inc. (NASDAQ: PDLI).

JON C. OGG

In 2010, the methodology called for a target of 11,455 and the DJIA closed out at 11,577.51 for the year. In 2011, the methodology called for a blended peak consensus of 13,042.06. While the DJIA closed 2011 up 5.5% at 12,217.56 for the year, the peak 2011 DJIA price was 12,928.50. Using stock market projections often feels like a game of horseshoes, or a bit like throwing hand grenades, because being close enough is generally all that matters. The blended DJIA price target peak for 2012, using the 24/7 Wall St. methodology is 13,678, or a gain of 11.96%.

Amazingly enough, this year’s projected figure may actually be understated because this removes the wild card performances of Bank of America Corporation (NYSE: BAC) and J.P. Morgan Chase & Co. (NYSE: JPM). Bank analysts have price targets that are still much higher than current prices and these have a low weighting in the actual share price weighting of the DJIA methodology. For that reason, the 13,678 is based upon 28 components. If we included the target using our methodology with just J.P. Morgan Chase & Co. (NYSE: JPM) shares, we would get an expected gain of 12.9% to 13,793; but if we also include the large upside targets to Bank of America Corporation (NYSE: BAC), then the DJIA target would be 14,035 for a gain of 14.88%.

There are caveats that have to be considered, particularly for a projected gain of almost 12% in 2012. The first is that analysts as a group are often too bullish, and the second is that this is intended to represent a peak level of 2012 rather than a year-end call. Only one of the 30 DJIA components, Verizon Communications Inc. (NYSE: VZ), is trading above its consensus price target from Thomson Reuters due to fresh highs in the stock. Many DJIA stocks closed well under their 52-week highs, but most consensus price targets on the 30 DJIA components would actually hit new 52-week highs in 2012 if the analysts are correct. A solid fourth quarter for U.S. stocks is part of why the analysts are still excited on individual stocks in 2012.

2011 was a very volatile year. The United States lost its prized Triple-A rating by S&P, emerging markets cooled off, the European Union went into meltdown mode, and all the while the big American companies managed to grow earnings, buy back stock at a feverish pace and even managed to grow their dividends. The last quarter for the DJIA was actually up about 12% versus 5.5% for the year. The broader market of the S&P 500 was up 11% in the fourth quarter but managed to close out the year literally 0.04 points lower than a year earlier.

The best of the 30 DJIA stocks was McDonald’s Corporation (NYSE: MCD) with a gain of about 31%. It rose so much that analysts now only see about 3% upside, based on year-end price target objectives. The three highest price components helped the DJIA gain as follows: International Business Machines Corporation (NYSE: IBM) rose about 27%, Chevron Corporation (NYSE: CVX) rose almost 20%, and McDonald’s Corporation (NYSE: MCD) rose over 30%. Warren Buffett even bought about $10 billion worth of IBM shares.

There were also many big losers out of the 30 DJIA components. A 58% drop in Bank of America Corporation (NYSE: BAC) shares made it the worst performer of the 30 DJIA stocks. Other big losers were Alcoa, Inc. (NYSE: AA) at -43%, Hewlett-Packard Co. (NYSE: HPQ) at -38%, and even J.P. Morgan Chase & Co. (NYSE: JPM) was dragged lower by almost 20% as the bank stocks slid. A couple of key components were barely changed. General Electric Co. (NYSE: GE) managed a small gain of almost 1.4% and Caterpillar Inc. (NYSE: CAT) closed down 1.5%.

The DJIA projection methodology has come within about 1% in each of the past two years. Does it seem too good to be true for 2012? With how sensitive the economy is today, it feels like it may be too good to be true. 2011 was so volatile and the DJIA performance of 5.5% compared to basically a total wash on the S&P 500 performance. Is it fair to question a methodology that worked for the past two years? If the DJIA hits 13,678 in 2012, that would compare to a high of 12,928.50 over the past year.

There are at least some things that could drive such a bullish projection. 2012 is an election year and that has often helped stocks. Will the gridlock of today interrupt 2012? The recession is now two and a half years in the rear-view mirror. The problems at the end of 2011 are likely to act as continued headwinds in 2012. Europe is still on the border of crisis. China is not posting the blazing growth needed to drive mature economies. Many segments of the manufacturing sector have excess capacity and moderate demand. Still, traditional valuations of stocks today are very low by historic standards. Companies are still raising dividends and still repurchasing stocks.

The Dogs of the Dow have a yield of roughly 4% for 2012. The 10-Year Treasury yield closed out 2011 at only 1.87% and the 30-Year Treasury Bond closed out 2011 with a yield of only 2.89%. After a rough glance, it looks like 24 of the 30 DJIA stocks have a higher yield than the 10-Year Treasury Note, and 13 of 30 even outyield the 30-Year Treasury Bond. This sets up a scenario where income-oriented and yield-hungry investors may use the DJIA and other established dividend players as competition for income rather than buying Treasuries.

Will Ben Bernanke’s promise to keep interest rates exceptionally low through mid-2013 hold true? Even if it does hold true, by the end of 2012 that promise will have only six months or so left to it. Are not markets supposed to be price exploration mechanisms for the months and year ahead?

Of the other 30 DJIA stocks, there are some good things to look forward to and some headwinds at the same time. Cisco Systems, Inc. (NASDAQ: CSCO) is trying to turn itself around. Intel Corporation (NASDAQ: INTC) recently gave a big revenue warning, and that may hold back more interest in Microsoft Corporation (NASDAQ: MSFT). Pfizer Inc. (NYSE: PFE) and Merck & Co. (NYSE: MRK) both made good gains in 2011 despite a patent expiration cliff and less-than-exciting drug pipelines. And Wal-Mart Stores Inc. (NYSE: WMT) is entering 2012 after a near 14% gain and is acting like it wants to surge to new multiyear highs.

If the implied gains of almost 12% do somehow manage to come true in 2012, the implied peak target on the SPDR Dow Jones Industrial Average (NYSE: DIA) would be roughly $136.47, if the performance of the ETF matches the index performance tick for tick.

The nearly certain nine Dogs of the Dow are as follows: AT&T Inc. (NYSE: T); Verizon Communications Inc. (NYSE: VZ); Merck & Company, Inc. (NYSE: MRK); Pfizer, Inc. (NYSE: PFE); General Electric Co. (NYSE: GE); E.I. du Pont de Nemours (NYSE: DD); Johnson & Johnson (NYSE: JNJ); Intel Corporation (NASDAQ: INTC); and The Procter & Gamble Company (NYSE: PG).  The horserace for the tenth spot on the Dogs is taking place among three DJIA components, with a distant fourth in the running: Microsoft Corporation (NASDAQ: MSFT); Kraft Foods Inc. (NYSE: KFT); Chevron Corporation (NYSE: CVX); and J.P. Morgan Chase & Co. (NYSE: JPM).

Here is the current expected order of the 2012 Dogs of the Dow, with dividend yields included:

• AT&T Inc. (NYSE: T) 5.9%
• Verizon Communications Inc. (NYSE: VZ) 5.2%
• Merck & Company, Inc. (NYSE: MRK) 4.5%
• Pfizer, Inc. (NYSE: PFE) 3.7%… After the most recent dividend hike which has not been paid out, the new yield will be 4.06% rather than a rounded off 3.7%.
• General Electric Co. (NYSE: GE) 3.6%
• E.I. du Pont de Nemours (NYSE: DD), or DuPont, 3.6%
• Johnson & Johnson (NYSE: JNJ) 3.5%
• Intel Corporation (NASDAQ: INTC) 3.4%
• The Procter & Gamble Company (NYSE: PG) 3.14%

The four DJIA stocks competing for the tenth-spot:

• Microsoft Corporation (NASDAQ: MSFT) 3.07%
• Kraft Foods Inc. (NYSE: KFT) 3.08%
• Chevron Corporation (NYSE: CVX) 3.03%
• J.P. Morgan Chase & Co. (NYSE: JPM) 2.98%

What is so interesting about this list is that Microsoft is entering the Dogs for what may be the first time ever.  McDonald’s Corporation (NYSE: MCD) is actually not in the list this year.  Those which have recently raised dividends outside of Microsoft are AT&T, Merck, Pfizer, and G.E.

If you average the top nine DJIA yields, investors get an average of about 4.06%.  If you include a 3.05% average for the competing four to go into the tenth spot, then the average dividend yield comes to 3.96%. As far as how this compares to the 2011 list, the lowest yield a year ago was roughly 3.1% as well.

Is it any coincidence that the average yield last year among the ten Dogs was 4.01%?  Here is the 2011 Dogs of the Dow review from a year ago for comparison.

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JON C. OGG

Boeing Co. (NYSE: BA) offered a surprise dividend hike that we would have expected perhaps next year, but it came anyhow. General Electric Co. (NYSE: GE) was one we have been calling on for a higher dividend down the pipe and it jumped in far sooner than expected. Those that hiked their dividends exactly as we expected are the Walt Disney Company (NYSE: DIS) with a much higher jump than the market was expecting, followed by AT&T Inc. (NYSE: T) and Pfizer Inc. (NYSE: PFE).

Those from whichwe are still looking for dividend hikes after the first of the year and just beyond the first quarter of 2012: Cisco Systems Inc. (NASDAQ: CSCO), the Coca-Cola Company (NYSE: KO), Exxon Mobil Corporation (NYSE: XOM), International Business Machines Corporation (NYSE: IBM), Johnson & Johnson (NYSE: JNJ), JPMorgan Chase & Co. (NYSE: JPM), 3M Company (NYSE: MMM), and Wal-Mart Stores Inc. (NYSE: WMT).

For those investors who love dividends, we would focus also in 2012 on some of the key ETFs, like the iShares Dow Jones Select Dividend Index (NYSE: DVY), Vanguard Dividend Appreciation ETF (NYSE: VIG), PowerShares Dividend Achievers (NYSE: PFM) and the iShares High Dividend Equity (NYSE: HDV) ETF products.

We have broken out some summaries of each DJIA component from which we still expect to see dividend hikes from soon.

Cisco Systems Inc. (NASDAQ: CSCO) has recently kept is low dividend static, and we would look for a 2012 announcement of a higher payout. It could boost the payout, but it needs its restructuring a bit further in the rear-view mirror to avoid bad PR. Look for Cisco to boost its payout in 2012 for its March or July payment. Even with its silly share buybacks, Cisco’s payout ratio is only about 14% of its expected 2012 earnings and the company has a mountain of cash.

Washington Mutual shareholders and creditors set a deal that could allow an exit from bankruptcy. (Reuters)

The policy meeting of the Federal Reserve could end with no actions at all. (Reuters)

Low availability of water makes it a profitable investment for many global financial organizations. (Reuters)

AT&T (NYSE: T) may try to change its plan to buy T-Mobile due to government resistance. (Reuters)

Another MF Global official says he does not know what happened to $1 billion of the firm’s money. (Reuters)

Jive Software will post its IPO slightly above the expected range. (Reuters)

Deutsche Boerse and NYSE Euronext (NYSE: NYX) will offer more concessions to close a merger deal. (Reuters)

Martin Marietta (NYSE: MLM) makes an offer of $4.8 billion to buy Vulcan Materials (NYSE: VMC). (Reuters)

Apple (NASDAQ: AAPL) softens its approach to selling its iAd inventory as Google (NASDAQ: GOOG) has had success in the mobile ad market. (WSJ)

The euro reaches a 10-month low. (WSJ)

McDonald’s (NYSE: MCD) begins delivery services in Asia. (WSJ)

Bank of America (NYSE: BAC), JPMorgan Chase (NYSE JPM) and Citigroup (NYSE: C) try to settle charges of mortgage fraud. (WSJ)

Pfizer (NYSE: PFE) increases its dividend and share buyout. (WSJ)

Italian unions stage strikes because of austerity plans. (WSJ)

Novartis’s (NYSE: NVS) multiple-sclerosis pill Gilenya has safety problems. (WSJ)

Diamond Foods (NASDAQ: DMND), faced with accounting problems, will delay its next quarterly filing. (WSJ)

LSE says it will buy the remaining 50% stake in FTSE that it does not already own from Pearson (NYSE: PSO). (WSJ)

The share of U.S. income earned by the top 1% dropped to 17% in 2009 from 23% in 2007. (NYT)

Experts prepare in case Greece leaves the eurozone. (NYT)

Google’s buyout of Motorola Mobility (NYSE: MMI) is delayed by EU authorities. (NYT)

Newspaper chain Lee Enterprises (NYSE: LEE) files for Chapter 11. (NYT)

Some EU-based banks are selling their most valuable assets as regional debt weighs upon their balance sheets. (Bloomberg)

Douglas A. McIntyre