After The Close - The first trading day of December, a month that has traditionally been good to investors, got off to a bumpy start for the bulls. The major U.S. equity indexes were not too far removed from the neutral line for much of the session before selling picked up in the final hour of trading on a day where declining issues led advancers by a notable margin on both the New York Stock Exchange and the NASDAQ. With little news of note either on the corporate and the economic fronts, save for another strong report on manufacturing activity (more below), there seemed to be some profit taking in a market that entered the month overbought.

From a sector perspective, much like the broader market averages, most of the 10 major groups weakened in the final hour of trading. Surprisingly, many of the economically sensitive sectors were not helped much by the better-than-expected reading on manufacturing activity for the month of December, as the basic materials and industrial stocks were among the bigger weak spots today. Conversely, there was some mild buying interest in the energy and healthcare sectors. The energy stocks, unlike the materials and industrials issues, got a mild boost from aforementioned data showing U.S. manufacturing activity at its highest in more than two years. In particular, Marathon Petroleum (MPC) was a big winner in the energy space.

As noted, this week that will bring a slew of reports from the business beat. There could be a few game changers among the crowd, including the latest data on third-quarter GDP (Thursday) and on the labor market (Friday). The latter report, along with the Federal Reserve’s latest Beige Book summation of economic conditions (due Wednesday afternoon) will be closely scrutinized by investors for clues about if and/or when the central bank might begin to pull back on its aggressive monetary tactics. Any form of bond-buying tapering later this month when the Federal Open Market Committee meets could prompt some selling on Wall Street.

Meantime, with earnings season now in the rearview mirror, investors were focused on industry-specific data, particularly that of the retailing industry following the conclusion of Black Friday and the first holiday-shopping weekend of the season. On that front, the news was far from uplifting, as research firm ShopperTrak reported that Thanksgiving and Black Friday only produced $12.3 billion in sales for the industry, which was below expectations. Too, many of the transactions were at deep discounts, which squeezed margins at many of the larger retailers. Retailing stocks, most notably those of struggling outlets Sears (SHLD) and J.C. Penney (JCP), were lower on the disappointing industry data. There should be more data on the retailers over the next few days as Cyber Monday figures are released. Speaking of Cyber Monday, it is worth noting that shares of eBay (EBAY) outperformed Amazon (AMZN) on a very important day for the major Internet retailers. Overall, to date, it is not looking like it will be a banner holiday-shopping season for the retailers. - William G. Ferguson

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


12:35 PM EST - The U.S. stock market is putting in a mixed, but improving, showing today, as traders return from the Thanksgiving holiday weekend. At just past noon in New York, the Dow Jones Industrial Average is now up 10 points; the broader S&P 500 Index is up about four points; and the technology-heavy NASDAQ is higher by one point. Market breadth is negative, as declining issues are ahead of advancers by about two-to-one on the NYSE.  Also, the major market sectors are mostly in negative territory. There is weakness in select consumer names. The basic materials issues are also lagging. However, there is some strength in the financial area, in the healthcare stocks, and in the mid-cap sector.

Technically, the market continues to hold up well, as we move into the last month of the year. Notably, the S&P 500 Index is still trading above 1,800, which is encouraging, as this is likely a key level to watch. The VIX is up slightly to 13.85 today, as some traders may be feeling a bit cautious about the market, especially, given the strong run we have seen over the past several weeks.

Meantime, it is a busy week for economic reports, building up to the government’s November non-farm payroll release, set to be issued on Friday morning. In addition, traders will get a look at the Fed’s Beige Book summation for December on Wednesday. Given the ongoing concerns over Fed policy, this release will also likely be widely scrutinized. As for today, the ISM Index registered 57.3 for November, which was well ahead of expectations. Also, construction spending, while a bit weak in September, increased 0.8% in October, which is encouraging. In addition to the aggregate economic reports, traders will also likely be looking to various retail store figures to monitor holiday shopping and the general mood of consumers.

In the corporate sector, there were no major companies reporting this morning. However, after the close, Krispy Kreme (KKD) is set to put out its figures. We will also hear from recreational vehicle maker Thor Industries (THOR). - 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 SurveyCorporate news is rather light this morning, as traders turn their full attention back to the markets after the Thanksgiving holiday. Retailers will certainly be in the spotlight today, given what looks to be a lackluster start to the holiday shopping season. Indeed, the National Retail Federation estimated that spending over the Thanksgiving weekend fell 2.7% from a year earlier. Traffic seemed pretty strong, but spending did not appear to keep pace. Elsewhere, earnings reports are scheduled to start trickling in again after the market closes today, when restaurant operator Krispy Kreme Doughnuts (KKD) and recreational vehicle manufacturer Thor Industries (THO) are expected to release October-quarter results. – 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 - Traders return to Wall Street this morning to start a new week and a new month, following some nice fireworks in November and a mixed final session of the month, an abbreviated day that saw the equity markets close at 1:00 PM (EST). All told, the Dow Jones Industrial Average and the Standard and Poor's 500 Index shed early gains to close narrowly lower on the day, while the tech-laden NASDAQ held onto a nice gain on the day.

Now, as noted, a new month gets under way and it will be a busy one, as investors try to make sense out of the early Christmas retail rush over the weekend, as they await the pending results of Cyber Monday, in which the expectation is that many shoppers, leery and tired of the crowds in the malls, will opt to do their purchases on line.

In addition to this news, there also will be a big succession of data issuances that will catch the eye of investors, starting out this morning at 10:00 (EST) with two releases, namely the monthly report from the Institute for Supply Management on manufacturing activity for the month of November. A modestly slower rate of improvement is the consensus forecast. Also, at that time, we will get a report from the government on construction spending for both September and October (with the former having been delayed by the earlier partial shutdown in Washington). Small increases are expected for each month.

Then, tomorrow will bring monthly data on new car sales for November. A further gain is the likely result here, as that key sector continues to pick up speed. Then, Wednesday will bring a report on the international trade balance. A slight improvement is seen there. Data on new home sales for both September and October are expected as well, with flattish results for both months. Also on Wednesday, the ISM will issue its companion report on non-manufacturing activity. Finally, the week will wind down with revised third-quarter data on U.S. GDP growth; an upwardly revised gain of 3.2% is the forecast in this category. Then, on Friday, we are scheduled to receive reports on personal income, consumer spending, employment, and unemployment. The big release will be the employment and jobless surveys, where the nation is believed to have created 204,000 new payrolls last month, while the jobless rate is expected to have fallen from 7.3% to 7.2%. 

This latter employment report, always looked at critically, will likely take on added importance this time around, as the Federal Reserve will be holding its next FOMC policy meeting on December 17th and 18th. It is likely that the payroll issuance and the unemployment rate will play a role in what the central bank opts to do with its bond-buying program. It is possible that a stronger-than-expected report on job creation could induce the Fed to start some minor tapering of its monetary program. We shall see.

As to the stock market in the hours ahead, the markets fell in China overnight, while they are directionless in Europe so far this morning. But over here, they have pulled into the black after a slightly lower period earlier this morning. This last trend would seem to presage a somewhat higher opening when traders get going 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.