Prior to the open market participants were dealt some underwhelming retail sales numbers for November. Specifically, both total sales and sales less autos increased by 0.2%, but total sales had been generally expected to increase by 0.6%, while sales less autos had been generally expected to post a 0.5% increase.

Big box electronics retailer Best Buy (BBY 23.79, -4.28) issued another disappointing announcement for its third fiscal quarter that featured an earnings miss. The stock would inevitably slump for one of its worst performances of the past few years.

However, most traders were willing to look past such negative themes, focusing rather on the cues that were coming from Europe. Renewed buying interest there was partly credited to encouraging data from Germany, but day-to-day shifts in sentiment have been a recurring theme in recent months. Europe's major bourses would eventually slide.

Prior to Europe's pullback, stocks were able to build on their opening gains because of rumors that the Fed might make more than mere mention of the possibility of further quantitative easing. That took the stock market to an early gain of about 1%, but the inability of the S&P 500 to overcome technical resistance and a retreat by the euro dashed those gains. The euro ended the day about 1.1% lower at $1.303, which makes for its lowest level in 11 months.

Stocks found support at the flat line and even made a modest rebound, but sellers soon redoubled their efforts upon receiving the latest FOMC policy statement, which did not make any new mention of plans for further quantitative easing, but recognized that strains in global financial markets continue to pose significant downside risks to the economic outlook. To little surprise, the Fed kept target interest rate in the range of 0.00% to 0.25% and remained committed to extending the average maturity of its holdings.

Given the uncertainty of the macro picture, many investors continue to crave the safety of Treasuries, even with the yield on the benchmark 10-year Note at only 2.0%. Results from an auction of 10-year Notes today showed dollar demand of $74.1 billion on a bid-to-cover of 3.53 and an indirect bidder participation rate of 61.9%. For comparison, an average of the last six auctions gives dollar demand of $65.2 billion on a bid-to-cover of 3.03 and an indirect bidder rate of 42.2%.

Advancing Sectors: Utilities +0.5%
Declining Sectors: Telecom -0.1%, Health Care -0.2%, Consumer Staples -0.3%, Energy -0.5%, Tech -0.9%, Industrials -1.1%, Financials -1.5%, Materials -1.7%, Consumer Discretionary -2.0%

Source: Briefing