Loading...
 

After The Close - The U.S. stock market started out higher, but weakened in the afternoon.  At the close of the day, the Dow Jones Industrial Average fell 60 points (-0.5%); the S&P 500 Index was lower by seven points (-0.5%); and the tech-heavy NASDAQ surrendered eight points (-0.3%).  Market breadth also suggested a weak tone to the session, as declining issues outnumbered advancers by a decent margin on the NYSE. Most of the market sectors pulled back today, with meaningful weakness in the transportation, basic materials, and energy issues. Meanwhile, there was some relative strength in the healthcare and technology stocks.

Technically, the stock market tested its 50-day moving average, located at roughly 1,420, this morning. Unfortunately for the bulls, the index encountered some resistance at this key technical level, and then headed lower. This was not totally unexpected, given that the market has staged a decent run since mid-November. With the third-quarter earnings season now behind us, news out of Washington will likely dominate the headlines. Ultimately, if a solution to the nation’s fiscal issues presents itself, this could serve as a catalyst for further market gains as we approach the holidays and wrap up the year.

Meanwhile, the economic news was somewhat mixed today, and this probably caused some concerns to surface. The Institute of Supply Management’s Manufacturing Index came in at 49.5 for the month of November, which was down a bit from last month’s reading and also short of analyst expectations. However, things looked a bit better in the construction area. According to the Department of Commerce, construction spending rose 1.4% in October, which was quite a bit better than had been widely been anticipated. The remainder of the week brings some important releases, such as factory orders and weekly jobless claims. However, all eyes will be on the November employment report due to be released on Friday.

Today’s corporate news was also mixed. Shares of LDK Solar (LDK) were off sharply, after the company reduced its top-line outlook, noting weakness in Europe. Nonetheless, not all the news was negative. Shares of computer giant Dell (DELL) advanced on a Wall Street upgrade. There was also some M&A news that was encouraging. Computer Sciences (CSC) stock moved higher on news that it will sell its credit services offerings. Also, SUPERVALU (SVU) stock was higher on reports that private equity firm, Cerberus, may be interested in making a deal with the struggling grocer. - Adam Rosner

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

12:15 PM EST - U.S. stocks started the day on an upbeat note, as traders appeared to be encouraged by overnight news that China’s manufacturing activity was up in the prior month. However, this optimism dissipated rather quickly when word spread that the U.S.’s own report card on manufacturing in November was not as good as expected. Indeed, the Institute for Supply Management indicated that activity in the sector contracted after two months of expansion. November’s index came in at 49.5, compared to a consensus that had been looking for around 51.3, and the prior-month’s level of 51.7. (A reading of 50 or higher is taken to indicate expansion.) Moreover, the latest reading was the lowest in more than three years, when the U.S. and the rest of the world were still navigating their way through the wake of the financial crisis.

This latest setback comes on top of ongoing concerns over whether Washington can settle its differences and come up with a way to deal with the spending cuts and tax increases scheduled to go into effect on the first business day of the new year.

Overall, after peaking at around 13,087, the Dow Jones Industrial Average shed nearly 100 points after the manufacturing news, and was down 10 points at the noon hour in New York. The S&P 500 and NASDAQ traced a similar arc for the morning, though both managed to return to fractionally above the unchanged mark.

Across the pond, the European bourses also opened their session on the positive side. In addition to the aforementioned news on China, traders likely reacted favorably to Spain making a formal request for over $50 billion to help recapitalize its ailing banks. Meanwhile, Greece indicated that it will put about $13 billion to buy back its bonds to help lower its daunting debt load. After trending higher following the open, however, the FTSE 100, DAX, and CAC 40 all gave back most of their gains and were trading near the lows for the day as they approached their respective closing bells.   - Mario Ferro

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 Today is a quiet day on the earnings front, though a few companies are scheduled to report quarterly results after the market closes, such as automotive parts and accessories retailer Pep Boys (PBY) and garbage and recycling company Casella Waste Systems (CWST).

In other news, Delta Air Lines (DAL) is reportedly interested in acquiring a stake in industry peer Virgin Atlantic. Singapore Airlines owns a 49% stake in Virgin and appears to be looking to unload it. Elsewhere, Dean Foods (DF), a leading manufacturer and distributor of milk and dairy products, has agreed to sell its Morningstar Foods unit for $1.45 billion. DF stock is up modestly in pre-market trading.

Finally, the trend of companies declaring special cash dividends ahead of the looming “fiscal cliff” of tax increases and spending cuts continues, with satellite television operator Dish Network (DISH) and women’s apparel retailer Cato Corp. (CATO) announcing one-time distributions that will be made before yearend. – 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 - The last trading day of November came and went with a whimper. The Dow Jones Industrial Average, the NASDAQ, and the S&P 500 Index finished relatively unchanged on Friday, which was the trading pattern for much of the session. Some encouraging news from the international community—particularly Germany agreeing to the terms of a third installment bailout loan for debt-encumbered Greece—offset some disconcerting economic news on these shores; personal income was flat in October, while spending fell. The mixed news led to a directionless day on Wall Street to close out the somewhat volatile month.

Nonetheless, the final month of trading in 2012 begins with the major U.S. equity indexes poised to produce nice annual returns for investors. December commences with the Dow 30, the tech-heavy NASDAQ, and the broader S&P 500 Index sporting gains of 6.6%, 15.6%, and 12.6%, respectively. Our sense is that the developments regarding the looming yearend fiscal cliff of automatic tax increases and spending cuts will play a major role in determining whether the equity indexes are able to hold these gains to the finish line. The ongoing sovereign-debt soap opera in the euro zone will also add to what is likely to be an eventful month for investors. If anything, the likely daily twist and turns of fiscal cliff negotiations will probably make for a volatile month on Wall Street.

The week ahead will once again be a quiet one on the earnings front. However, there will be no shortage of reports on the economic beat. The Institute for Supply Management’s report on manufacturing activity (due at 10:00 A.M. EST) kicks off the busy week. This afternoon, the latest data on monthly vehicle sales are due. Then on Wednesday, the investment community’s focus will shift to the labor market when payroll-processing giant Automatic Data Processing (ADP) releases data on private-sector jobs creation; Thursday brings data on initial weekly unemployment claims; and on Friday the government’s much-anticipated report on nonfarm payrolls and unemployment is released. We will also get reports this week on nonmanufacturing activity and productivity (Wednesday) and consumer sentiment (Friday). Wednesday’s report on the nonmanufacturing (services) sector is expected to be closely examined, especially with the all-important holiday shopping season now in full gear.

As for the markets, with less than an hour to go before trading commences on these shores, the equity futures are higher ahead of the aforementioned releases of data on manufacturing activity and automobile sales. According to LMC Automotive, a Detroit-area industry consulting firm, November vehicle sales are expected to be the highest since early stages of 2008, while the consensus is that U.S. manufacturing expanded in November, though at a slower pace because of the effects of Hurricane Sandy.

In the international markets, Asia’s indexes finished mixed overnight. Japan’s Nikkei broke the 9,500-mark for the first time since April, as the nation’s construction pace rose due to repair projects related to last year’s natural disasters. Japanese equities were also helped by a weaker yen and China’s improved manufacturing activity. Speaking of China, the nation’s main equity indexes were weaker, with Shanghai Composite and Hong Kong's Hang Seng finishing 1.0% and 1.2% lower, respectively. Although China's November PMI of 50.6 was the best reading in seven months, it still fell short of expectations, which prompted some selling in China’s equity market. Meantime, the European bourses are higher as trading enters the second half on the Continent. Economic news seems to be the driving force there, as a handful of manufacturing activity readings were reported in the euro zone. Most notably, France’s reported PMI of 44.5 was slightly below expectations, while Spain's PMI of 45.3 was ahead of the consensus figure. Overall, the euro zone’s PMI reading met expectations at 46.2, a showing that investors seemed to like. – William G. Ferguson

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