After The Close - Stocks turned higher in afternoon trading today, and at the close had posted constructive gains, supported by positive data on the economy and housing. For the session, the Dow Jones Industrial Average added 60 points and the NASDAQ tacked on six points. Two stocks gained for every one declining on the New York Stock Exchange.

Traders’ attention remained focused on the looming "fiscal cliff" of steep preset government spending cuts and tax hikes set to take effect on January 2nd. A vote on one proposal is set to take place in the House of Representatives this evening okaying higher taxes on people with annual incomes above $1 million. Even if passed, the bill in its current form is not expected to make it into law. But the market seemed to take heart that at least the process is moving forward.

Some have argued that in the long run it might be better to go over the cliff, since less spending on the part of Uncle Sam and higher taxes are part of the medicine that would help improve the nation’s fiscal health. But the potential economic pain that might ensue in the first half of 2013 if such measures were allowed to take hold does not appeal to Wall Street in the least. Corporate profits have already exhibited a flattening trend, and a slowdown, or worse, in business conditions early in the new year, for whatever reason, could undermine investor sentiment.

Meanwhile, at the sector level, financial stocks led the way, bolstered by news of a merger between NYSE Euronext (NYX) and Intercontinental Exchange (ICE). NYSE Euronext shares surged on the news. At the same time, Bank of America (BAC - Free Bank of America Stock Report) and JPMorgan Chase & Co. (JPM - Free JPMorgan Chase Stock Report) were the Dow’s best percentage gainers.

In other markets, oil prices inched ahead, touching $90.00 a barrel on the New York Mercantile Exchange. Gold prices continued their recent slump, though, falling below $1,650 an ounce.

Before tomorrow’s opening bell, investors will get reports on personal income and spending for November, where expectations are for decent gains. And shortly after trading commences, a final reading on consumer sentiment for December is due. The sentiment gauge is projected to be slightly above its initial reading, but well below November’s reading.

At for the fiscal cliff negotiations, Congress and the White House appear to be moving grudgingly toward some sort of budget agreement, although there are no guarantees one will be reached by the early 2013 deadline. -Robert Mitkowski

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

12:35 PM EST - The U.S. stock market was somewhat directionless this morning. As we pass the noon hour in New York, the Dow Jones Industrial Average is off about 13 points; the S&P 500 Index is ahead by a point; and the tech-heavy NASDAQ is slipping slightly. Nonetheless, market breadth suggests a mixed tone, as advancing issues are still ahead of decliners on the NYSE. About half of the market sectors are headed higher, with gains in the conglomerates and financial issues. Meanwhile, there is weakness in the basic materials and technology issues.

Technically, the S&P 500 Index has put in a strong run over the past few weeks, so some consolidation here is probably necessary. Yesterday’s selling was orderly, and there were even some pockets of relative strength in the market, suggesting that there is still some underlying support for equities. So, it is likely too early to declare that the holiday rally is stalling.

Traders are likely reacting to the rather large batch of economic reports released today. First, investors received a weak reading on the jobs situation. According to the Labor Department, initial jobless claims for the week ended December 15th came in at 361,000, which was above the 344,000 claims logged in the prior week, and a bit higher than analysts had expected. Weekly continuing claims also rose a bit, adding to the concerns. This was followed by a more positive issuance on the general economy. According to the Department of Commerce the nation’s GDP increased by 3.1% in the third quarter, which was stronger than the consensus view of 2.8% and above the prior estimate of 2.7%. Meanwhile, the housing market recovery seems to be on track, as existing home sales for the month of November reached 5.04 million, exceeding both expectations and last month’s showing. Elsewhere, the economy in the Philadelphia region is making progress, as well. Finally, the Conference Board’s report of leading indicators came in weaker than forecast for the month of November.

In corporate news, shares of Darden Restaurants (DRI) are trading lower after the company posted weaker-than-expected results. Jabil Circuit (JBL) stock is rising, after the tech company issued a decent report. In retail, shares of Bed Bath & Beyond (BBBY) are lower on weak guidance.

Widely traded stocks advancing today include: NYSE Euronext (NYX), office furniture maker Steelcase (SCS), and CarMax (KMX). Issues headed lower include: Carnival (CCL) and Allscripts (MDRX). - 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 is some M&A news out today. Notably, IntercontinentalExchange (ICE), which owns and operates exchanges for trading derivatives contracts, has struck a deal to buy industry peer NYSE Euronext (NYX) for $33.12 a share in cash and stock. This represents a premium of nearly 38% over NYX’s preannouncement closing price. NYX stock is surging in the premarket, while ICE shares are indicating a modestly higher opening. Likewise, shares of Illumina (ILMN) are up sharply in pre-market trading, after a report in a Switzerland-based newspaper said that drugmaker Roche may have increased its bid for the medical supplies company.

Elsewhere, shares of drug store operator Rite Aid (RAD), automotive retailer CarMax (KMX), and packaged foods company ConAgra (CAG) are all trading higher in the premarket on earnings news. On the other hand, shares of homebuilder KB Home (KBH), cruise ship operator Carnival Corp. (CCL), management and technology consulting company Accenture PLC (ACN), and home goods retailer Bed Bath & Beyond (BBBY) are all indicating lower openings after reporting quarterly results.

Finally, shares of Allscripts Healthcare Solutions (MDRX) are plunging ahead of the bell, after the provider of electronic health record systems changed its CEO and announced that it would no longer look to sell the company. – 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 broke its latest mini-winning streak yesterday, as optimism about a quick conclusion to the contentious budget talks that are now ongoing in Washington faded during the afternoon. Thus, by the close, the Dow Jones Industrial Average, which had fashioned back-to-back triple-digit gains, saw that string not only break, but that 30-stock composite of mostly blue chip companies come very close to falling by triple digits, losing 99 points on the day. The tech-heavy NASDAQ held up somewhat better, losing only 10 points, while the smaller-cap indexes managed to turn in mixed performances. Underscoring the nominal nature of the aggregate declines, save for the Dow and the Standard and Poor's 500 Index, were the basic standoffs on the advance-decline ratios on both the Big Board and the NASDAQ.

Meanwhile, in addition to the tidings out of Washington, we also had the economy to deal with, and here, the news was somewhat more reassuring, as the U.S. Commerce Department reported that housing starts eased back just slightly in November, but still managed to turn in their second-best showing of the year. At the same time, building permits, a more forward-looking metric, jumped nicely last month, reaching their highest level in some four years. It should be noted that both series--starts and permits--are being compared with the prior-quarter levels. When we look at the data and we compare them to the year before, the gains are stellar. The housing recovery is clearly alive and well.

However, we cannot make such a claim about the budget talks. To be sure, they are alive and ongoing, but the latest comments from the respective leaders are less than compelling. Specifically, President Obama and House Speaker John Boehner seem to again be at odds about the major parameters of a hoped-for accord, as they swap harsh comments, but still leave some room for further negotiations. In the end, we sense that a compromise will be fashioned, and hopefully before the January 2nd deadline for such a deal, before tax increases and spending reductions become mandatory. We sense that there is a very good chance for a deal to be put into place by the deadline, or shortly thereafter. But the tensions are high, and doubts are beginning to surface in some quarters.

Now, looking ahead to a new session, we have a busy economic day ahead of us, with the nation's GDP growth for the third quarter having been revised from an increase of 2.7% to one of 3.1%. Then later this morning, the National Association of Realtors will release figures on sales of existing homes for November. A modest gain is the forecast. However, all of this is a secondary concern to the budget talks, as the better GDP data have not produced any upward wrinkle in the equity futures, which still point to just a mixed opening when trading gets under way 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.