After the Close - The new trading week began with the bears making a case for themselves. Renewed concerns about the looming “fiscal cliff” of tax hikes and spending cuts on these shores and worries about the sovereign-debt problems in the euro zone prompted some selling after last week’s strong performance, which included a more-than-170 point jump in the Dow Jones Industrial Average during an abbreviated trading session on Friday. The lack of any major news on the economic or corporate fronts to offset the aforementioned worries also worked in favor of the bears today. At the closing bell, the Dow 30 and the broader S&P 500 Index were down 42 and three points, respectively. The NASDAQ fared better, with the index up 10 points on the shoulders of a decent showing for technology stocks. Still, there was a definitive negative tone to trading, with declining issues ahead of advancers on both the New York Stock Exchange and the NASDAQ, though by a miniscule margin on the latter.

The selling was pretty broadbased, with most of the 10 major sectors finishing in negative territory. The energy group was the day’s biggest laggard, followed by the noncyclical consumer area. Continued worries about what affects the possible U.S. fiscal cliff scenario and the lingering debt concerns on the Continent would have on the global economy weighed on the performance of the energy stocks. A setback for the consumer cyclical stocks was also a bit surprising given that early indications are that sales were up year-over-year on Black Friday. Conversely, it was a good session for those long utilities and technology issues. The latter group moved higher on the strength of computer hardware stocks and strong showings from tech giant Apple (AAPL), Facebook (FB) and Knight Capital (KCG). Shares of Facebook jumped on an analyst upgrade earlier today, while KCG stock was up on rumors that the struggling financial services company may be an acquisition target.

As noted, with little on the earnings and economic beats, the eyes of investors were on the “fiscal cliff” negotiations and the euro-zone debt woes. The major European bourses finished lower today on these concerns. In Europe, the attention remains on Greece, where finance leaders and the International Monetary Fund made their third attempt in as many weeks to agree on releasing emergency aid for Greece. Holding up a deal to this point are worries about how Greece's debt, estimated to peak at 190% to 200% of GDP in the next two years, can be cut to a more sustainable level by the end of this decade. Meantime, renewed concerns over here about bickering amongst Washington lawmakers and business groups over the proper rates for taxing and spending next year unnerved investors to a modest degree. Our sense is that until some concrete decisions regarding both issues are reached, the markets are likely to be quite volatile over the remaining weeks of 2012. This scenario bears watching, as the S&P 500 Volatility Index (or VIX) at just over 15 still suggests that the market is way overbought at this moment—and any negative news could prompt some selling on Wall Street.

Looking ahead, the economic news will begin pouring in, with reports on consumer confidence and durable goods orders due tomorrow. We will also get data on new home sales (Wednesday), initial weekly jobless claims and another revision to third-quarter GDP (Thursday), and personal income and spending (Friday). Investors should also note that the latest Federal Reserve Beige Book summation of economic conditions is due on Wednesday afternoon. If nothing else, the handful of economic reports may take some of the investment community’s attention away from the fiscal issues being debated on Capitol Hill and the soap opera in the euro zone, which may not be a bad thing for the U.S. equity indexes.  - William Ferguson

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


12:30 PM EST - The U.S. stock market opened lower this morning. However, after some speculative buying, the NASDAQ, at least, now seems to be in a bit better shape. At just past noon in New York, the Dow Jones Industrial Average is still down 84 points (-0.6%); the S&P 500 Index is off eight points (-0.5%); but the tech-heavy NASDAQ is just off two points (-0.1%). Market breadth still suggests a negative bias to today’s session, as declining stocks are outnumbering advancers by a decent margin on the NYSE. The market sectors are largely in negative territory, with weakness concentrated in the energy and financial issues. This may reflect weaker crude oil prices this morning, as well as concerns about the nation’s “fiscal cliff”. In contrast, the utility issues are bucking the downtrend, and technology is holding up relatively well.

Technically, the S&P 500 Index has attempted to recover over the past few sessions. However, trading volumes have been quite weak lately, suggesting that there may not be too much conviction behind the latest rally attempt. The market is taking a breather today, after the Thanksgiving holiday weekend. Many on “Wall Street” are now likely wondering if a “Santa Claus” rally will materialize over the next few weeks, as we close out the year.

Concerns about the situation in Europe may still be weighing on investors. Finance officials in the region continue to meet, in an effort to provide a partial solution to Greece’s debt problems. The major bourses traded lower today, and this has set a negative tone for the markets in the United States.  

Although initial reports for the holiday sales have been positive so far, this has not moved the market higher. Meanwhile, there was no major economic news released today. Tomorrow brings reports on durable goods orders for October. The housing market will also be back in the spotlight with the release of the September Case Schiller 20-City Index, and the FHFA Housing Price Index. We also get a look at consumer confidence figures for November. 

The corporate news was light today. However, shares of Zhongpin (HOGS) were up sharply, after China’s big agricultural company has agreed to a merger with Golden Bridge Holdings. Also, struggling Knight Capital Group (KCG) stock is higher on reports that the company may sell part of its operations. In technology Facebook (FB) stock is trading higher on some Wall Street analyst upgrades. - 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 Full trading resumes on Wall Street today, after the markets were closed on Thursday for Thanksgiving and only open for half the day on Friday. The earnings calendar is light, but retailers will probably be in the spotlight, as investors try to read the Black Friday tea leaves and see how things play out today, on what is known as “Cyber Monday”. Stocks such as Amazon.com (AMZN), eBay Inc. (EBAY), Macy’s (M), Target (TGT), and Wal-Mart Stores (WMTFree Wal-Mart Stock Report) could see active trading today.

In other news, shares of Zhongpin, Inc. (HOGS) are soaring in the premarket, after the China-based meat processor agreed to be taken private for $13.50 a share. The stock of Knight Capital Group (KCG) is also indicating a sharply higher opening this morning, on reports that the securities brokerage company may be looking to sell its market making business. – 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 - Thanksgiving may have been this past Thursday, but the real celebration took place on Friday--at least down on Wall Street where investors threw caution to the wind and helped send the stock market soaring. In all, the Dow Jones Industrial Average jumped by 173 points, in an abbreviated post-holiday trading session that ended at 1PM (EST), while the NASDAQ added 40 points, and the Standard and Poor's 500 Index rose 18 points. 

All told, investors went on a strong buying binge on what has become known as Black Friday, when, theoretically, the retailers, both large and small, make enough money to put them in the black, so to speak, for the year. Initial estimates are that sales rose solidly from a year earlier on this day. Forecasts also are that the average American will spend $423 on holiday gifts in 2012, up from $398 in 2011. Also, the pundits are suggesting that 137 million Americans will have shopped last weekend, or 44% of the U.S. population.

Meanwhile, most of the projected increases are coming on-line, as physical in-store visits were apparently down on Friday, with sales being below last year's totals.

Whatever the actual numbers, the totals coming out today and over the past weekend are all estimates and subject to revision as the holiday season winds down. In fact, such estimates often are revised lower, as crowds do not always mean increased sales at this time of year.

As for the stock market on this post-holiday trading session, as noted, it rose strongly, as it often has done in the past on the day after Thanksgiving. In fact, over the past 70 years, this session has been a winning one almost 60% of the time. It seems optimism is mostly on the increase on this day, as hopes rise for a solid economic finish to the year.

However, it was probably not the onset of the holiday shopping season, the end-of-year-euphoria, or Black Friday that played the major role in the day's action, but likely hopes that the current standoff in Washington will be resolved with this nation not going off of the proverbial fiscal cliff on January 2, 2013. Expectations are that we will get some tax increases, or revenue enhancements, as some would call it, along with a series of spending cuts. Evolving forecasts are, though, that the Draconian cuts and tax hikes that have been speculated upon will not occur as a post-election spirit of compromise may yet prevail.

If that is, indeed, the case, then the latest rally could have some staying power and we could get a formidable year-end rally in the market. As it is, Friday's close by the Dow Jones Industrial Average at 13,009 marked the first finish for that blue chip index above 13,000 since the election on November 6th. Meanwhile, our sense continues to be that some sort of deal will be reached in time, or at least an agreement to forestall the tax hikes and spending cuts until a compromise can be achieved once the new Congress gets going.

As to the week ahead, we will be getting a pair of key economic reports tomorrow when we receive data on durable goods orders for October and the Consumer Confidence Index for November. The former is expected to have fallen, while a gain is seen for the latter. Then, on Wednesday, we will get data on October new home sales. Thursday will bring reports on weekly jobless claims and revised third-quarter GDP. Finally, Friday sees reports on personal income and consumer spending. Ahead of all this, some profit taking would seem ahead at the opening of the trading week, as the S&P and NASDAQ futures are each off a little more than four points. However, those indicated losses are materially smaller than they were earlier in the morning, so any dip could be small and shortlived.   - Harvey S. Katz

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