After The Close - Stocks turned in a comparatively quiet performance today, tamed by the overhang of "fiscal cliff" concerns and a lack of enthusiasm in this holiday-shortened week, despite the positive news that home prices are on the rise in many parts of the country. After an attempt at a late afternoon rally fizzled, the Dow Jones Industrial Average closed down 24 points and the NASDAQ lost 22 points, with the NASDAQ’s drop being far greater on a percentage basis. Nearly two stocks declined for every one advancing on the New York Stock Exchange.

Keeping a lid on sentiment were reports indicating that holiday shopping sales hardly rose versus the prior year. That hurt shares of retail-related stocks, including those of Coach (COH), Brown Shoe (BWS), Oxford Industries (OXM), Sketchers (SKX), Ralph Lauren (RL), and Amazon.com (AMZN). There was even selling in stable consumer names, such as Dow components Coca-Cola (KO - Free Coca-Cola Stock Report) and Procter & Gamble (PG - Free Procter & Gamble Stock Report).

Meanwhile, tech stocks fared a bit worse than most, with shares of Apple (AAPL) losing ground, partly on fears of rising competition. The utilities sector fell back, too, possibly on renewed concerns regarding higher dividend taxes if no deal is soon struck to avoid the looming fiscal cliff.

On the up side, shares of basic materials companies had a good day. Winners included coal stocks Alpha Natural Resources (ANR) and Arch Coal (ACI). Oil prices also rose more than $2 a barrel, to nearly $91, owing to concerns about supply disruptions in northern Iraq. That supported issues in the energy sector.

Tomorrow brings a few economic reports that may influence trading to a degree. At 8:30 A.M., the Labor Department will release its weekly reading on initial unemployment claims filings. Not much change is expected from last week’s number, which pointed to a continuation of the modestly upbeat trend in the job market. Then, at 10:00 A.M., data on consumer confidence and new-home sales are due out. Analysts are looking for a moderate decline in consumer confidence in December from the prior month, but an uptick in home sales from October to November.

But, of course, Wall Street’s overriding concerns is how much, if any, progress is being made by the powers that be in Washington toward avoiding the fiscal cliff. At this point, some sort of temporary moves seem likely to be a first step at resolving the issues, rather than a broad tax and spending plan that both sides can live with. Partial measures may not get investors too excited, but might be enough to prevent a sharp selloff.   - Robert Mitkowski

At the time of this writing, the author did not have positions in any of the stocks mentioned. 


12:20 PM EST - The U.S. stock market got off to a decent start this morning, but started selling off about an hour into the session. As we pass the noon hour in New York, the Dow Jones Industrial Average is off about 49 points (-0.4%); the S&P 500 Index is down eight points (-0.6%); and the tech-heavy NASDAQ is leading the averages lower, surrendering 23 points (-0.8%). Market breadth shows a weak tone to the session, as declining stocks are outnumbering advancers on the NYSE. And, most of the market sectors are losing ground today. There are sharp declines in the consumer names, and the technology issues are also weak. Nonetheless, there is some strength in the basic materials and energy issues. Notably, oil is having a good session, with crude up about 2.6% to over $90 a barrel. Elsewhere, in commodities, gold is also seeing some buying.

Technically, the S&P 500 Index hit some resistance a few days ago. Furthermore, volumes were quite heavy, suggesting some meaningful selling on the part of traders. A more apprehensive sentiment can be seen by looking at the VIX, which is up almost 9% today to a reading of over 19. Meanwhile, the S&P 500 Index is now close to its 50-day moving average located at 1,413, and hopefully for the bulls this will function as some support.

Traders are still following the situation in Washington, as the President will be working with Congress to resolve the nations’ budget issues before the first of the year. Many are concerned that an increase in taxes and more limited spending could de-rail the nation’s economic recovery. Meanwhile, the economic news was light today. The housing market is still recovering, however, as the Case-Shiller 20-City Index showed housing prices rising 4.3% in October, which was better than the 3.0% increase logged in September, and also ahead of analyst expectations. Tomorrow, we get more information on the housing front, as new home sales for November are due out. We also get a look at the weekly initial jobless claims, and the consumer confidence figure for December.

In the corporate arena, the news has been quiet. Shares of Pfizer (PFE Free Pfizer Stock Report) are trading slightly higher, as the company’s drug Eliquis has been granted approval in Japan. Netflix (NFLX) stock is up, even though the company suffered a service outage on Christmas Eve.   - Adam Rosner

At the time of this article’s writing, the author did not have positions in any of the companies mentioned. 


Stocks to Watch from The Survey Corporate news is very light again this morning, as traders and investors slowly turn their attention back to equities after the markets were closed yesterday for the Christmas holiday and Monday saw an abbreviated session. Ahead of the bell, shares of Herbalife (HLF), which had plunged last week, are rebounding slightly, likely on news that the seller of weight management, supplements, and personal care products has hired law firm Boies, Schiller & Flexner LLP to defend it against negative comments made by noted investor and hedge fund manager William Ackman. Shares of Zynga (ZNGA) are also trading slightly higher in the premarket, on reports that the online game developer is close to launching real-money gambling games in the United Kingdom. – Matthew E. Spencer

At the time of this article’s writing, the author did not have positions in any of the companies mentioned.


Before The Bell - Wall Street will shortly re-open for business, following what we hope was a happy, joyous, and safe Christmas holiday for all of our readers. And the stock market will re-open to no new developments on the fiscal cliff front, as the hours tick down to what seems increasingly likely to be a failure to strike a deal on a so-called Grand Bargain regarding the budget dealings. It seems as though the White House and Congress remain too far apart to get the job done in time to avert the feared January 2, 2013 deadline for fashioning a compromise accord. At best, we now see a partial agreement falling into place by January 2nd. It could be weeks before a full agreement will be structured, in our view.

The two sides will get down to budget business dealings tomorrow, and could well work through the New Year's break next week. The consensus seems to be that the inability for a deal to get done by January 2nd will increase the uncertainty on the economy, with the likely prime casualties being the automotive, apparel, and retail industries. Retailing, alone, employs a good chunk of the nation's work force. So any major delay in reaching a deal could cause the nation's unemployment rate, now a worrisome 7.7% to begin with, to spike up to 9%, or so, within months.

Meanwhile, after Monday's modest setback, which saw the Dow Jones Industrial Average fall by 52 points, the equity futures are now posting small gains, with the S&P 500 Index futures ahead by almost three points and the NASDAQ futures up by a tad more than three points. That would seem to presage a nominally better opening when traders get down to business in less than an hour from now.

As to other news, we still are some three weeks away from the start of peak fourth-quarter earnings season, a time that figures to result in some mixed tidings from Corporate America, in an economy that likely will not have grown by more than 1.0%-1.5% in the fast-concluding three months.

As to more imminent tidings, the holiday-shortened week will feature some key housing metrics, starting with the Case-Shiller home price index report for October today. Another price increase seems likely to have been recorded in this fast-improving market. Then, tomorrow, the Commerce Department will issue its latest data, for November, on sales of new homes. Earlier this month, the government reported a slight dip in housing starts, but a nifty gain in building permits, which is more of a leading indicator. At the same time, the National Association of Realtors, a trade group, had released data showing a rise in sales of existing homes. We sense that new home sales also ticked up last month. We also will be getting a survey on consumer confidence from the U.S. Conference Board for December. That report will be issued at the same time as the new home sales figures, specifically, at 10:00 AM (EST) tomorrow morning. Finally, the week concludes with reports on weekly jobless claims tomorrow morning, and data on pending home sales and the Chicago-area purchasing managers on Friday.

As noted, though, the focus will be on Washington and there is the potential for some stepped-up volatility in the equity market depending on the course of the news developments out of the Capitol. That could be good or bad, although at this point, the burden of proof would appear to be on the bulls, who have largely had their way this year. – Harvey S. Katz

At the time of this article's writing, the author did not have positions in any of the companies mentioned.