After The Close - The major stock averages turned up a bit today, although investors remained wary of high-stakes budget talks in Washington. At the end of the day, the Dow Jones Industrial Average added 40 points and the NASDAQ rose 16 points. Market breadth on the New York Stock Exchange was positive, helped by strength late in the session.

Wall Street doesn’t seem as if will be able to breathe easy until a workable budget arrangement is agreed on between Republicans and Democrats. A relief rally could come if a deal is reached soon. On the other hand, if it starts to appear as if no compromises will be achieved as the month of December wears on, there could be heightened volatility as fears of a recession in the first half of 2013 set in. Sizable government spending reductions and higher taxes are due to take effect on January 2nd if no other course is charted.

One interested party that would loathe to see no budget accord materialize is the Federal Reserve. The central bank has been doing yeoman’s work these past few years reducing interest rates nearly to zero, leveraging its balance sheet, and taking the calculated risk that it would not spark a serious spike in inflation to help achieve what modest economic growth there has been of late.

The Fed’s ultralow-rate policies have supported the housing market recovery, in turn triggering increased spending for furniture, appliances, landscaping, and other services. Rates on 30-year mortgages edged higher this week, to 3.34%, according to government agency Freddie Mac. But that is still an extremely attractive rate for anyone looking to buy a house. Low rates are also spurring auto sales—another big ticket item.

Meantime, stocks for a change may have gotten a little bit of a helping hand from Europe, where the DAX-30, Germany’s major index, rose to its highest level in nearly five years on unexpectedly strong October factory data.

In corporate news, Apple’s (AAPL) management is apparently taking steps to address dissatisfaction with the maps function of its popular i-phones and i-pads. Its stock closed higher on the news. Other tech gainers included shares of Netflix (NFLX) and Akamai Technologies (AKAM). On the down side, investors continued to sell the stock of Freeport-McMoRan Copper & Gold (FCX) after the company announced a pair of major acquisitions yesterday,

Tomorrow brings the monthly government jobs report, which is normally very influential. But this time the data is expected to be materially affected by the disruption caused on the east coast by Hurricane Sandy. The spotlight may quickly revert back to the budget talks in Washington as a result.   - Robert Mitkowski

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


12:30 PM EST - The U.S. stock market got off to a rocky start this morning, but is now moving modestly higher. At just past noon in New York, the Dow Jones Industrial Average is up about nine points (0.1%); the S&P 500 Index is ahead by two points (0.2%); and the NASDAQ, which is the leader today, is adding on 16 points (0.5%). Widely-held technology giant Apple (APPL) shares opened lower, but have since rebounded. Market breadth is now showing a neutral bias, as advancing issues are just about even with decliners on the NYSE and on the NASDAQ. Leadership can be found in the technology, consumer, and services stocks, with modest weakness seen in the financial and capital goods issues.

Technically, the S&P has been consolidating for a few days, but is now making another move up to its 50-day moving average, located at roughly 1,418. Trading volumes picked up as the market advanced yesterday, which is encouraging and shows a commitment on the part of the bulls. Some emerging strength on the NASDAQ, and the technology sector, is important, since this Index has been lagging lately. Meanwhile, the VIX, now at about 16, is headed lower today.

The economic news released this morning was generally constructive. According to the Labor Department, initial jobless claims for the week ended December 1st came in at 370,000, which was down from last week’s figure of 395,000, and better than many had expected. Moreover, the weekly continuing claims also dipped, which is encouraging too. Traders may now be feeling a bit better about buying stocks in front of the November employment report slated to be released tomorrow morning. Notably, this monthly issuance is widely watched, and unlike some of the lesser news items, can easily move the financial markets.

Finally, traders got a mixed batch of corporate news this morning. Shares of Lululemon Athletica (LULU) were off earlier, but are now in positive territory. The athletic clothing maker posted decent quarterly numbers, but issued mixed guidance. Sirius XM Radio (SIRI) stock is higher after the company announced a share repurchase program and a special dividend payment. Elsewhere, there has been some merger activity. Walter Energy (WLT) shares are higher on a possible acquisition offer from BHP Billiton (BHP). This may be encouraging for coal issues, which have been badly battered over the past year. - 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 There are a few earnings reports out today. Investors appeared pleased with results from H&R Block (HRB), as the tax preparer’s October-period deficit narrowed and revenues increased. That stock is up slightly in the premarket. Shares of pork processor Smithfield Foods (SFD) are also indicating a marginally higher opening this morning on earnings news. On the other hand, investors appeared less enthused with athletic apparel retailer lululemon athletic (LULU). October-period results were better than expected, but the company’s guidance for the January term fell a bit shy of expectations. That stock is down modestly ahead of the opening bell.

In other news, shares of Walter Energy (WLT) are up notably in pre-market trading, on a report that metals and mining company BHP Billiton (BHP) may be considering a bid for the coal company. Shares of Zynga (ZNGA) are also trading higher ahead of the bell, on news that the online game developer has applied for a Nevada gaming license, which could be its first step in offering real-money gambling games. – 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 Dow Jones Industrial Average rose nicely in the latest session, while the tech-heavy NASDAQ, pulled down by an outsized loss in the shares of iconic computer maker Apple Inc. (AAPL), fell back notably. That, in a nutshell, was the tale of the tape yesterday on Wall Street.

Specifically, the 30-stock Dow, underpinned by a strong gain in the shares of insurance giant Travelers Cos. (TRV - Free Travelers Stock Report), rose 83 points, after having been comfortably ahead by well over a hundred points for much of the session. In the process, the Dow reached a one-month high, climbing back above the psychologically critical 13,000 level. The financial stocks also did well, led by Bank of America (BACFree BofA Stock Report), which jumped by better than 5%, to close at $10.46 a share. Notwithstanding that banking behemoth's well-chronicled ills, the stock has now more than doubled from its 52-week low of $4.92 a share, and is within six cents of matching its best levels of the past 12 months.

All of this came on what was an inauspicious day for economic news. To be sure, the Institute for Supply Management did help the day along with the issuance of some better-than-expected news on the nonmanufacturing side, as that trade group's index for the services sector came in at a mildly expansionary 54.7 last month. That was slightly ahead of the October level of 54.2 and above the expectation of 53.5. However, this gauge of activity in the services area has been range-bound for the past year, with incremental changes to the upside, at best. At the same time, Automatic Data Processing (ADP) issued its monthly survey on private-sector payroll growth, and that metric came in below expectations. That closely tracked report, which has some on-again, off-again correlation with the U.S. Government's report on non-farm payrolls, which is set for release tomorrow morning at 8:30 (EST), easily offset the better news from the ISM.

As for the Apple meltdown, that heretofore one-decision stock, plunged by $37.05 a share yesterday, bringing the issue down to a close of $538.79. Now, that is still not-too-shabby for those holding the stock for several years. However, yesterday's close compares poorly with a 12-month high of $705.07, bringing the aggregate price drop to 23.6%. According to Wall Street tradition, this puts the stock in bear market territory. And, as if on cue, the issue is indicated about five points lower in the pre-market this morning. The latest drop in Apple shares appears to reflect some concerns about market share regarding that company's tablets.

Elsewhere, the contentious talks to hopefully avoid the ominous fiscal cliff continued in Washington, with both sides expressing some cautious optimism, but neither, apparently, ready to give in materially. That soap opera could well go down to the wire--or beyond that time. The deadline for reaching a deal before a series of tax hikes and spending cuts is set to go into effect, is January 2nd.

Finally, in a hopeful development on the economic front, the U.S. Labor Department has just issued weekly jobless claims data, which showed that such layoffs fell by 25,000 in the latest week, to 370,000. That was below the expectation of 380,000. So that could augur well for tomorrow's monthly employment figures.

As to the stock market this morning, the latest indications point to a slightly weaker start when traders get down to business in less than an hour from now. – Harvey S. Katz 

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