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After the Close - Wall Street was unable to shake off the blues again today, as fears about the looming "fiscal cliff" held center stage for another day. Shares fell notably toward the close of trading, too. The concern, of course, is that unless Congress takes action soon, a combination of preset tax hikes and spending reductions will push the economy into recession in 2013. That would, in turn, clearly have a negative effect on corporate profits. Traders had previously been overlooking weakness in earnings to a degree on the thinking that the slump might be temporary, but that no longer seems to the case. Worries about higher taxes on dividends and capital gains are also prompting some selling.

Even so, the Dow Jones Industrial Average is only off about 7.5% from its 52-week high, and not yet even close to bear-market territory, which is usually considered to be a 20% drop. But there has been a notable correction in progress since early October, evidenced by more stocks hitting yearly lows than highs of late.

At the close, the Dow was down 185 points and the tech-heavy NASDAQ was off 37 points, or slightly less on a percentage basis than the Dow, as good quarterly results from Cisco Systems (CSCO Free Cisco Stock Report) supported sentiment toward tech names a bit.

In terms of sectors, the selling pressure was acutely felt among shares of basic materials, consumer discretionary, and industrial companies. A wide range of stocks in those groups, including Barrick Gold (ABX), Potash Corp. (POT),  Ford (F), Nike (NKE), Coach (COH), Boeing (BA - Free Boeing Stock Report), and Caterpillar (CAT - Free Caterpillar Stock Report) all saw their market capitalization ease this session. Even homebuilding issues, such as Lennar (LEN), that had been on a tear for much of the year with the recovery in housing-market conditions, did not fare well today. 

Tomorrow brings a handful of reports on the economy and corporate earnings that could move the market, if results differ materially from expectations. Business data on tap include figures on initial unemployment claims, the Consumer-price index for October, a manufacturing survey from the New York Federal Reserve, and the Philadelphia Fed’s monthly survey on the region’s business outlook.

Earnings-wise, reports from retailers Wal-Mart (WMT - Free Wal-Mart Stock Report), Target (TGT), and The Gap (GPS), along with computer manufacturer Dell (DELL), and tax software specialist Intuit (INTU). The substantial amount of news due to be released should make for an interesting day, and may give Wall Street more to chew on than its fixation with looming government budgetary decisions.  - Robert Mitkowski

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

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3:30 PM EST - After attempting to hang in there with just moderate further losses, the bulls have apparently given up the fight--at least for the current session. Specifically, after being off by between 50 and 80 points for much of the day, the Dow Jones Industrial Average has sold off notably in the past few minutes, and as we go more deeply into the final hour of trading that 30-stock composite is now off by 165 points, or well over a full percentage point. That puts this index back to just below 12,600.

Meanwhile, the other indexes are following suit, with the NASDAQ shedding 33 points, or also more than 1%, and the Standard and Poor's 500 Index losing 17 points, or just over 1%. The small and mid-cap indexes are faring even worse, proportionately. Further, declining stocks are swamping gaining issues on the Big Board to the tune of some five to one; the ratio of losing stocks over winning equities on the NASDAQ is some three to one. Also, 52-week lows are topping new highs on the NYSE modestly and overwhelming them on the NASDAQ.

Behind this additional weakness are concerns about the fast-approaching fiscal cliff of mandated tax increases and spending cuts. That feared one-two punch is scheduled to take effect on January 2, 2013 unless the spirit of compromise prevails in Washington. Recent comments by the leaders of both parties cast some doubt on that hoped-for good will, although we continue to sense that a last-minute deal will be struck. For now, however, the bears are in control and seemingly tightening their post-election grip.   - Harvey S. Katz  

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

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12:30 PM EST - The U.S. stock market opened higher this morning, but then slipped into negative territory. Now, the market is making an effort to pare its losses, and reverse course again. At just past noon, the Dow Jones Industrial Average is off about 77 points (-0.6%); the broader S&P 500 Index is lower by seven points (-0.5%); and the NASDAQ is lower by eight points (-0.3%). Market breadth indicates underlying weakness, as declining issues are swamping advancers by about 3 to 1 on the NYSE. Furthermore, almost all of the market sectors are trading lower, with considerable weakness in the basic materials and consumer cyclical names. There is some relative strength in the technology stocks, as these issues are off only slightly. Technically, the S&P 500 Index has broken through its 200-day moving average, located at about 1380. Also, heavier trading volumes on weak market days also is of some concern.

The initial move higher this morning likely reflected some better-than-expected corporate news.  Specifically, Dow-30 component and technology bellwether Cisco (CSCO - Free Cisco Stock Report) posted strong results. Notably, this report helped lift the technology sector, and the networking stocks in particular. In apparel, Abercrombie & Fitch (ANF) stock is up over 25% on a strong report and an encouraging outlook. There was even some good news in the challenging office supplies arena, as shares of Staples (SPLS) rose on a better-than-expected release.

Nonetheless, traders had to grapple with some mixed economic reports this morning, and this may explain some of the weakness in the market. According to the Commerce Department, retail sales slipped 0.3% in October. This showing stands in contrast to the sharp increase in sales logged in September. Excluding auto sales, the October sales figure was a bit better, showing no change. These numbers may have some traders concerned that the consumer may be losing steam before the holiday season. Although we add that results include lost business due to Hurricane Sandy. Elsewhere, according to the Labor Department, producer prices actually declined slightly in October, which suggests that there is little to worry about on the inflation front.  Also, business inventories moved up a bit more than anticipated in September, which indicates that the business outlook remains bright. Later this afternoon, the FOMC is slated to release the minutes from its October meeting.

Stocks moving up sharply today include Facebook (FB), Frontline (FRO), and F5 Networks (FFIV). Stocks heading lower include Sony (SNE) and Trina Solar (TSL).   - Adam Rosner

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

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Stocks to Watch from The Survey Earnings reports are in the headlines again today, with leading networking equipment maker and Dow-30 component Cisco Systems (CSCOFree Cisco Stock Report) garnering much of the attention. Cisco stock is up sharply in the premarket, after the company reported solid October-period results after the market closed yesterday.

A number of retailers are also on today’s earnings calendar, with Abercrombie & Fitch (ANF) looking to be the big winner in that space. The teen apparel retailer delivered better-than-expected October-quarter results and offered an upbeat outlook. The stock is soaring in the premarket as a result. Investors also appeared pleased with a quarterly report from Staples (SPLS). After the market closes today, other retailers, such as Limited Brands (LTD) and Williams-Sonoma (WSM), are scheduled to release quarterly financials.

In other news, shares of Overseas Shipholding (OSG) are plunging ahead of the opening bell, after the maritime transportation company voluntarily filed for Chapter 11 bankruptcy protection. – Matthew E. Spencer

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

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Before the Bell - The stock market suffered a late selloff yesterday, which served to easily overcome what had been a half-hearted attempt to right a ship that has been navigating in very choppy waters over the past week. All told, the Dow Jones Industrial Average, which had been up more than 80 points earlier in the session, lost all of that and an additional 59 points to close at 12,756. That was its lowest level since July. Any hopes of a quick trip to 14,000 have been all but dashed for now. 

Meantime, in addition to the Dow's setback, the Standard and Poor's 500 Index lost six points and the NASDAQ, pressed by losses in such tech stalwarts as Microsoft (MSFT Free Microsoft Stock Report), as that company suffered a key personnel departure, fell more than 20 points. The breadth of the market also was weak, with twice as many stocks losing ground as gaining territory on both the Big Board and the NASDAQ.

Hurting stocks once again yesterday, just as they have been for the past week, are concerns about the pending so-called fiscal cliff of scheduled tax hikes and spending cuts in this country, and fresh concerns out of Europe, notably Greece. The “fiscal cliff” is set to kick in on January 2, 2013, unless Congress works out a compromise with the White House in the interim. We continue to believe that such a deal will be struck in time, but given the uncompromising language now emanating from both sides, such an assumption is hardly etched in stone. As to Europe, there are increasing indications that the economic reversals now ubiquitous along the southern tier of the beleaguered Continent, could well spread to most of the nations in the euro zone, that loose economic confederation that is tied, among other things, to a weakening currency.

Meanwhile, news aside from Europe and Washington was light again yesterday. However building products retailer and Dow-30 component Home Depot (HD Free Home Depot Stock Report) did chip in with better-than-expected quarterly results and added in an upbeat forecast going forward. That helped the blue chip counter the aggregate downtrend in the Dow as it gained more than two points on the session.

Then, after the close of trading, networking giant and fellow Dow component Cisco Systems (CSCO Free Cisco Stock Report) posted strong quarterly net and that stock is indicated nicely higher this morning. The Cisco gain is also helping the equity futures to a nice gain with less than an hour to go before the start of the new trading day. All told, the Standard and Poor's 500 Index futures are up nearly five points and the NASDAQ futures are ahead by almost 12 points.

Finally, the economic beat picks up this morning, with data just issued showing a dip of 0.2% in the Producer Price Index for last month; a rise of that magnitude had been the expectation. Meanwhile, retail sales fell by 0.3% in October; a drop of 0.2% had been the forecast. Excluding the volatile auto component, the so-called core rate of retail spending was unchanged for the month.  - Harvey S. Katz

At the time of this article's writing, the author had positions in CSCO.