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MARKETS SNAPSHOT FOR 09/12/11

Saturday, 10 December 2011 | 00:00
DJ30 PointChange: +186.56 Level: 12184.26 NASDAQ PointChange: +50.47 Level: 2646.85 NQ100 PercentChange: +1.6 R2K PercentChange: +3.1 SP400 PercentChange: +2.4 SP500 PointChange: +20.84 Level: 1255.19 NASDAQ-Adv:2095 Dec: 461 NYSE-Adv:2581 Dec: 435 [BRIEFING.COM] Stocks closed out the week on a strong note, helping the broad market book another weekly gain. Europe remained the primary topic of trade.

Traders took early cues from Europe, where the region's major bourses bounced because of the focus on news that eurozone officials agreed to tighter fiscal controls and also to make funds available to the International Monetary Fund for use in the rapid deployment of the European Financial Stability Facility, rather than the challenge of establishing changes to the eurozone treaty. Given the dissension and dysfunction that has been displayed so often during recent months, the eurozone summit was generally regarded as a step in the right direction. That helped drive the EuroStoxx 50 more than 1% higher, but the euro only gained 0.2% to end the session at $1.338.

Reports of progress in Europe were complemented by encouraging inflation data from China, which reported sharp declines in both CPI and PPI for November. Domestic data featured the preliminary Consumer Sentiment Survey for December from the University of Michigan. It improved to a six-month high of 67.7.

Equities traded with strength amid the hope that the macro picture might improve because of Europe's efforts to shore up its precarious financial and economic conditions, while cooler inflation in China could mean that the country can curb inflation without sacrificing economic growth.

Although buying was broad based, financials spent most of the session out in front of the rest of the market. The sector settled the session 2.3% higher with help from banking plays and diversified financial institutions.

Industrials were slower in their ascent, but the sector also scored a strong gain of 2.2%. General Electric (GE 16.84, +0.53) was a leader in the space after the conglomerate announced a dividend increase that many took as a sign of confidence in cash flow.

Other corporate news was less encouraging. Both Texas Instruments (TXN 29.94, +0.02) and DuPont (DD 45.04, -1.48) cut their outlooks, but those reports were generally shrugged off by a market that remained fixated on the events in Europe.

The broadly positive bias displayed by stocks stayed intact all session, helping the major equity averages settle the session near their highs. Share volume may have been light, but stocks still cut prior session losses to give the S&P 500 a near 1% weekly gain.

The bounce on Friday helped stocks offset part of the prior session's slide, which was the worst one-day drop for the stock market in about two weeks. To little surprise, that decline was driven by a mosaic of headlines from Europe. Participants were hardly surprised that the European Central Bank (ECB) cut its target lending rate, but there was a negative response to news that the vote was not unanimous and that ECB became more cautious in its economic outlook. The tone certainly wasn't helped by the European Banking Authority report that capital shortfalls increased in their latest stress test.

News that the ECB will extend collateral eligibility to asset-backed securities was overshadowed, as was the latest weekly initial jobless claims tally. Initial jobless claims totaled 381,000, which is less than the 395,000 initial claims had been widely expected.

Mid-week trade kept stocks mired near the neutral line as participants were reminded about the headline risk associated with Europe when it was learned that analysts at S&P were focusing on the European Union's top-notch credit rating. Tuesday trade was lackluster amid an absence of economic data and material corporate announcements.

Action this week began with a solid gain on Monday, when traders took encouragement from a decline in the borrowing costs of Italy and Spain -- a tacit sign of increased confidence in the two countries -- after Italy unveiled a new austerity plan. It was also learned that the ECB intends to inject one trillion euros for use in additional bond buying. Reports that Germany's Merkel and France's Sarkozy were making concerted efforts to lead Europe through its crises were also taken positively, although analysts at S&P put Germany and France on "creditwatch negative," while also placing all 17 euro nations on ratings downgrade watch. Little was made of the November ISM Services Index, which eased to 52.0 from 52.9 in the prior month and failed to meet the Briefing.com consensus estimate of 53.4.

Source: Briefing

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