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After The Close - Stocks turned in a weak performance today on uninspiring economic data and indications that both sides in Washington may be digging in regarding measures to take to avoid going over the fiscal cliff. The market was largely directionless early on. But trading began to turn bearish following a news conference called by House Speaker John Boehner to give his views on why budget negotiations with the White House had stalled. Selling pressure increased until the final hour, when reports surfaced that Mr. Boehner would meet with President Obama tonight. Shares again fell back, but managed to finish moderately off their session lows.

In truth, Wall Street had enjoyed a nice rally from mid-November to early this week on the view that lawmakers would come up with a package to avert drastic spending cuts and tax hikes early in 2013 that could cause a recession. Signs that any such deal might be delayed or be ensnarled by another nasty fight over raising the nation’s debt ceiling cut short some of the enthusiasm today, though.

At the close, the Dow Jones Industrial Average was off 75 points and the NASDAQ had declined 22 points. Market breadth was broadly negative.

At the sector level, consumer discretionary stocks and tech shares were among the weakest. Ford Motor (F) and Nike (NKE) were big name companies that saw their stocks drop more than the market as a whole. Meanwhile, shares of Apple (AAPL) and Qualcomm (QCOM) led the way lower in the tech space.

A number of energy stocks also saw tough going as oil prices on the New York Mercantile Exchange dropped by 70 cents a barrel to around $86. Oil-market psychology has been hurt lately by subpar demand growth and the perception that supplies may increase as a result of increased drilling in the United States and Iraq. Energy-related stocks, such as Exxon Mobil (XOM - Free Exxon Stock Report) and National Oilwell Varco (NOV), experienced some selling pressure as a consequence.

Tomorrow brings a handful of fresh economic reports for investors to size up. The Consumer Price Index (CPI) is expected to decline 0.2% for October, on the heels of lower fuel prices. And while the so-called core CPI figure is projected to show a rise of 0.2%, that would still be within what most economists consider a comfortable range.

Readings on the nation’s industrial production and capacity utilization are also due out on Friday, but nothing earth-shaking is expected there.
Almost certainly attention will remain riveted on the budget negotiations in Washington D.C., where any signs of progress would be welcome. -Robert Mitkowski

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

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12:15 PM EST - The U.S. stock market was choppy all morning, but is now modestly in negative territory. At just past noon in New York, the Dow Jones Industrial Average is off 38 points (-0.3%); the S&P 500 Index is down five points (-0.4%); and the NASDAQ  is off 12 points (-0.4%). Market breadth indicates a mixed tone, as declining stocks are outnumbering advancers by a narrow margin on the NYSE. Moreover, weakness can be seen in most of the market sectors. There are losses in the energy and consumer cyclical companies but, there is some relative strength in the transportation and financial stocks.

Technically, the S&P 500 Index may be taking a breather, after several constructive sessions. Volumes picked up again yesterday, indicating increased interest in equities. The Index may have hit some resistance at the 1,430 mark, which provided support in September and October. However, with the end of the year about 15 days away, a holiday rally may still be possible, especially if there is some good news concerning the nation’s budget. Meanwhile…

Investors are shrugging off some decent economic news today. The nation’s job situation appears to be getting better. According to the Labor Department, initial jobless claims for the week ended December 8th, declined to 343,000 from the prior week’s 375,000 reading. The showing was better than had been anticipated. Furthermore, weekly continuing claims also declined, supporting the idea that the situation is improving. Elsewhere, retail sales advanced 0.3% in November, but fell a bit short of the consensus view. However, this figure was better than the modest decline posted last month. There is little to indicate that inflation is becoming a problem, as the Producer Price Index fell in the month of November.

In corporate news, shares of Best Buy (BBY) are up sharply on reports that company’s founder is looking to purchase the company. Also, Clearwire (CLWR) stock is higher as Sprint Nextel (S) plans to purchase a larger interest in the company. In the retail sector, Pier One (PIR) shares are modestly higher, after that company put out a decent quarterly report.

Widely traded stocks moving higher today include: Boston Beer (SAM), Nii Holdings (NIHD), and RF Micro Devices (RFMD). Issues headed lower include: Harbinger Group (HRG), Lattice Semiconductor (LSCC), and Lexmark (LXK).   - 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 There are a number of stocks making big moves ahead of the opening bell this morning. Notably, shares of Best Buy (BBY) are soaring in the premarket, on a report that Richard Schulze, the founder of the electronics retailer, will likely make a fully financed bid for the company sometime this week. Shares of telecommunications services provider Clearwire Corp. (CLWR) are also up sharply in pre-market trading, after industry peer Sprint Nextel (S) offered to buy the 49% of  Clearwire stock that it does not already own. Finally, Boston Beer (SAM) stock is skyrocketing ahead of the bell, after the brewer increased its guidance.

Elsewhere, shares of home goods retailer Pier 1 Imports (PIR), telecommunications equipment company Ciena Corp. (CIEN), and homebuilder Hovnanian Enterprises (HOV) are all moving modestly higher in the premarket on earnings news. Too, CVS Caremark (CVS) stock is indicating a nicely higher opening today, after the drug store operator updated its guidance, increased its dividend, and announced a share-repurchase program. – 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 Federal Reserve concluded its two-day Federal Open Market Committee meeting yesterday afternoon and, at first, the stock market strengthened, encouraged by the obvious commitment on the part of the central bank to extend its aggressive monetary easing ways via additional purchases of longer-dated government securities. However, upon second glance, the Fed's aggressive stance underscored the ongoing weakness in the economic recovery, most notably the inability of the expansion to create enough jobs to bring the unemployment rate down sharply. Worse, should we go over the so-called fiscal cliff on January 2nd, and thus bring on the mandatory tax increases and spending cuts that so many now dread, the outlook for the economy, and employment, would logically worsen--and perhaps dramatically so.

Such concerns, in fact, took over the reins during the final hour, or so, of the trading day, and a once-formidable stock market rally faded badly by the close, with the Dow Jones Industrial Average, which had earlier been ahead by some 70 points, ending up down three points. The NASDAQ, pressured by selective weakness in technology stocks, fell back eight points. But the Standard and Poor's 500 Index managed to hang on to a fraction of a point increase, after having been ahead by some 10 points earlier.

The FOMC meeting took center stage, in part, because other news was sparse. Underscoring the Fed worries, as we noted above, is unemployment, which stands at a still-lofty 7.7%, after having fallen back over the past three years from roughly 10%. The central bank, though, is unimpressed by the recent declines in joblessness, and has said that its program of bond purchases would stay in effect until the jobless rate fell to 6.5%. That could well be two years, or more, as the level of job creation--at 146,000 in the latest monthly survey, which covered November--is still too low to materially bring down unemployment from its current lofty perch.

The absence of hard news on the economy, however, is ending this morning, with a trio of issuances just out in the past half hour. First, the Labor Department issued data showing that weekly jobless claims fell sharply, to 343,000, in the past seven-day stretch. That was much better than expected. Then, that same agency noted that the Producer Price Index dropped sharply in November, falling by 0.8%. The PPI was pushed decidedly lower by falling energy quotations. Finally, the Commerce Department intoned with data showing that retail sales edged up by 0.3% last month. However, if we back out the volatile auto sales component, to get the so-called core rate of retail spending, we see that this sector was unchanged during the month. Meantime, the aggregate retail sales gain was a bit less than expected, but the unchanged reading on the core rate of sales was exactly on consensus.

As for the stock market, investors, as noted, appear unimpressed with the latest Fed actions, and as if to underscore this lack of enthusiasm, the stock market seems likely to open the day's festivities with little overall movement. – Harvey S. Katz 

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