DJ30 PointChange: +25.43 Level: 11793.73 NASDAQ PointChange: -15.49 Level: 2570.96 NQ100 PercentChange: -0.8 R2K PercentChange: +0.1 SP400 PercentChange: -0.1 SP500 PointChange: -0.48 Level: 1214.68 NASDAQ-Adv:1243 Dec: 1263 NYSE-Adv:1693 Dec: 1287
Stocks slogged along for almost the entire session. They ultimately
finished flat. The lack of action made for an unexciting finish to the
stock market's worst week in more than a month.
Premarket posture was positive. Participants responded to the
stabilization of yields on the debt of such trouble spots as Spain and
Italy, renewed strength in the euro, and a climb by Europe's bourses
from their session lows. Buying in Europe eventually lost momentum,
leaving the region's major averages to settle with varied losses.
An absence of follow through buying in Europe undermined this
morning's improved tone. In turn, stocks slipped at the open of U.S.
trade and never really established a direction of trade. Movement in the
S&P 500 was partly limited because of resistance near 1225 and
support at the weekly low just beneath 1210.
Consistent with trade earlier this week, stocks lacked a legitimate
form of leadership. That said, financials managed to put together their
best performance of the week by advancing 0.5% as a group. They still
shed more than 5% for the week, though.
Tech stocks, which make up the largest sector by market weight,
lagged once again. With a 0.7% slide the sector logged its third
straight loss. Tech stocks collectively fell about 4% this week.
The expiration of monthly options likely added to the market's chop.
Option-related trade helped inflate share volume on the NYSE in the
absence of market-moving corporate news and economic data. Share volume
on the Big Board still didn't break 1 billion, though.
Action on Friday made for a rather boring follow-up to the sharp
losses suffered in the prior two sessions. Those back-to-back declines
combined for a drop of more than 3%, which made up the bulk of the near
4% weekly slide suffered by stocks.
Stocks fell in excess of 2% on Thursday as a technical breakdown
brought about a barrage of selling that sent the stock market to its
lowest level in nearly a month. Participants became less interested in a
generally pleasing batch of data that featured the least weekly initial
jobless claims tally since April (388,000) and better-than-expected
housing starts and building permits for October. Housing starts hit an
annualized rate of 628,000, while building permits set an annualized
pace of 653,000. However, the Philadelphia Fed Survey for November
slipped more than expected to 3.6 from 8.7 in the prior month.
The stock market's slide on Wednesday came amid a confluence of
events, including a retreat by the euro and a reminder from analysts at
Fitch that domestic banks could be hurt if the fiscal and financial
problems of Europe worsen. Analysts at Moody's added to the specter of
contagion by downgrading credit ratings of 10 banks in Germany, which is
Europe's strongest, most diversified economy. A lack of leadership also
left stocks with little chance of fighting off the efforts of sellers. Trade
was hardly influenced by stronger-than-expected 0.7% increase in
monthly industrial production. Data for the day also featured a 0.1%
decline in the October Consumer Price Index (CPI) and a 0.1% increase in
core CPI, as had been generally expected.
Producer price data also proved cool when it was released on Tuesday.
During October producer prices were down 0.3% and core prices were
flat. Neither was too different than what had been widely expected.
Overall retail sales for October proved strong with a 0.5% climb, but
sales less autos were even more impressive with a 0.6% increase. Despite
the generally pleasing nature of the data, action among stocks was more
closely correlated with the euro, given its nature as a barometer of
sentiment in Europe. Although the euro still suffered a loss that day,
its move up from its session low helped lift stocks to their only gain
of the week.
The euro opened the week with a slump, reflecting a weaker bias in
Europe, even though Italy had approved new austerity measures and held
another successful debt offering during the weekend. Given concerns
about Europe's stability, many bank stocks were pressured for fear of
their exposure to the continent.
With so much focus on Europe and the sensitivity to headlines out of
the region, earnings matter little to overall market sentiment. Still,
it is worth noting both Lowe's (LOW 23.50, +0.39) and Home Depot (HD 37.88, +0.26, +0.26) posted better-than-expected bottom lines. Dell (DELL 14.90, -0.02) also had an upside surprise, but that was overshadowed by its tepid forecast. Wal-Mart (WMT 57.23, +0.50) earnings actually came short of what Wall Street had expected.
Outside of earnings, IBM (IBM 185.24, -0.49) got
some attention after it was learned that billionaire investor Warren
Buffett has been acquiring shares in the company for the past month. Chevron (CVX 97.88, -2.20) and Transocean (RIG 47.47, -1.46) were cast in a negative light amid concerns about their role in a recent oil leak.