Stock Market Today: December 18, 2012
After The Close - In what could be considered a replay of Monday’s market action, stocks traded appreciably higher again today on continued optimism that the White House and Congress would reach a budget accord to take some of the sting out of drastic government spending cuts and tax hikes set to take effect early in the new year.
Of note, too, in a quiet sort of way, is that the sovereign-debt concerns in Europe that plagued investors earlier this year have become a less pressing issue. Not that Europe is booming in any sense of the word, but the powers that be across the Atlantic at least for the time being appear to have the situation under control. Increasing confidence that the euro zone will make it through to better times is shown in the euro’s rise to $1.32. The currency’s has traded in a range from $1.20 to $1.35 over the past year.
At the close, the Dow Jones Industrial Average had surged 116 points and the NASDAQ had jumped 44 points. Market breadth was broadly positive, with more than two stocks gaining for every one declining on the Big Board.
The tech sector also had a good day, with shares of Apple (AAPL), Microsoft (MSFT - Free Microsoft Stock Report), and Facebook (FB) recovering some lost ground. Apple benefited from word that rival Samsung was dropping a bid to ban sales of certain Apple products in Europe.
In other corporate news, marketing and media researcher Arbitron (ARB) agreed to be acquired by Netherlands-based Nielson Holdings N.V. for $48 a share in cash. Arbitron shares were among the day’s biggest gainers.
On the down side, gold shares lagged as the price of the yellow metal fell $27 an ounce to $1,670, on the perception there was less of a need for a safe haven.
Tomorrow brings a couple of economic reports on the housing market in the form of housing starts and building permits for November. The general expectation is that the numbers will show the sector’s recovery is on track.
There are also earnings releases due out from several companies. Consultant Accenture (ACN), retailer Bed Bath & Beyond (BBBY), package deliverer FedEx (FDX), cereal maker General Mills (GIS), and payroll processor Paychex (PAYX) are all due to report their latest quarterly profits. With the exception of FedEx, gains are expected.
And, of course, Wall Street will be attuned to the budget negotiations in Washington, where hopes are rising for an agreement to be reached soon. -Robert Mitkowski
At the time of this writing, the author did not have positions in any of the stocks mentioned.
12:15 PM EST - The U.S. stock market opened higher today and has been able to build on those gains. At just past noon in New York, the Dow Jones Industrial Average is up 78 points (0.6%); the S&P 500 Index is ahead by 11 points (0.8%); and the tech heavy NASDAQ is showing leadership, tacking on 33 points (1.1%). Market breadth suggests that the rally is broad based, with advancing issues ahead of decliners by over 2 to 1 on the NYSE. Almost all of the market sectors are moving higher today, with leadership in the consumer cyclical, technology, and capital goods stocks. However, there is some minor weakness in the conglomerates today.
Technically, the S&P 500 Index has easily cleared its 50-day moving average, currently located at 1,414. Yesterday’s up move was accompanied by decent trading volumes, which is always good sign. The index also managed to move through the 1,430 area, which was a possible area of resistance. Now, the S&P 500 is about 2% away from its 52-week high. The VIX is down almost 4% to just below 16 today. Notably, the low reading suggests that bullish sentiment is intact, and possibly even excessively so. Based on the recent performance, it seems that a holiday rally may well be in the making.
The economic news was constructive today. The NAHB Housing Market Index came in at 47 for December, which matched the reading many had expected, and was also ahead of last month’s figure. Tomorrow, November housing starts and building permits are due out. The SPDR Home Builders ETF (XHB) is up considerably on the news. Elsewhere, investors may be optimistic that progress is being made on resolving the nation’s budget issues. Notably, this has been an area of concern lately.
In corporate news, shares of Baker Hughes (BHI) are trading higher, even though the oil services company issued revised guidance. In the financial area, Jefferies Group (JEF) is seeing its stock advance, after the company posted slightly better-than-expected profits. In the technology sector, shares of Oracle (ORCL) are higher. The software giant is expected to post its results today after the closing bell.
Widely traded stocks advancing today include: Arbitron (ARB), level 3 (LVLT), and Boyd Gaming (BYD). Issues headed lower include: GT Advanced Technologies (GTAT) and Smith & Wesson (SWHC). - Adam Rosner
At the time of this article's writing, the author had a position in GT Advanced Technologies (GTAT).
Stocks to Watch from The Survey – Arbitron (ARB) is in the headlines this morning, after the media and marketing research company agreed to be acquired by industry peer Nielsen Holdings for $48 a share. ARB stock is soaring in the premarket as a result. On the earnings front, shares of Jefferies Group (JEF) are up nicely in pre-market trading, after the investment bank reported better-than-expected November-period results. Wall Street also appeared pleased with an earnings report from Sanderson Farms (SAFM), a producer, processor, and distributor of fresh and frozen chicken. SAFM stock is trading slightly higher ahead of the bell. On the other hand, investors were disappointed with November-quarter financials from FactSet Research Systems (FDS), a leading provider of global financial and economic information. That stock is indicating a notably lower opening this morning. – 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 stock market started the penultimate week of the year on a decided upnote, with all of the averages up smartly on seeming progress on the U.S. budget negotiations. The gains were especially noteworthy among the financial shares, as optimism spread that a deal between President Obama and House Speaker John Boehner might yet be fashioned before the January 2, 2013 deadline for such an accord. Such a compromise would then avoid the dreaded fiscal cliff from evolving.
All told, the 30-stock Dow Jones Industrial Average gained an even 100 points, to end the session at 13,235. At the same time, the NASDAQ surged by 39 points; the Standard and Poor's 500 Index was better by 17 points; and the small-cap Russell 2000 was in the plus column by 11 points. For the year, the Dow is ahead by 8.3%, while the tech-heavy NASDAQ is a 19.3% winner. It has been a solid year by almost all accounts.
All of this took place on a day in which economic news was scarce and the nation sought to recover from the unspeakable crime that took place last Friday in Sandy Hook, Connecticut. We extend our heartfelt prayers to the families of the victims of that tragedy.
Today, meanwhile, will be another light economic news day. However, the business beat picks up notably over the last three days of this final full week of 2012, as we will get data tomorrow morning on housing starts for November. That is the first of the trio of key housing metrics reported monthly. The second such report, figures on existing home sales, will then be issued on Thursday, along with statistics on revised third-quarter GDP, weekly and continuing jobless claims, the leading indicators, and the Philadelphia Federal Reserve manufacturing index. Finally, Friday brings reports on personal income and consumer spending as well as data on consumer sentiment from the University of Michigan. (The final housing report, sales of new homes, will be issued next Thursday.) Meantime, most of these issuances have the potential to boost or rattle the markets, although we note that it will likely be the negotiations in Washington, and the hopes for a deal that will avoid the feared fiscal cliff, that will be the main focus of investors this week and into the final days of the year.
As for the market outlook this morning, the bourses are generally higher in Europe so far today, with the London FTSE, the Paris CAC-40, and the Frankfurt DAX up between 0.4% and 0.5% each so far on U.S. budget hopes, while on our shores, the S&P 500 Index futures are ahead by more than three points, while the NASDAQ futures, benefiting from a presumed sharply higher opening in the shares of Apple Inc. (AAPL), are up by nearly 13 points. So when trading resumes in about a half hour from now, it should do so with a nicely higher bias. – Harvey S. Katz
At the time of this article's writing, the author did not have positions in any of the companies mentioned.