Encouraging economic data outweighed concerns regarding the
"fiscal cliff" and lifted the markets into the green on Friday.
Among the positive economic readings, consumer sentiment jumped
to its highest level in more than five years and wholesale
inventories data showed strength. However, Friday's gains were
not strong enough to prevent the S&P 500 from registered its
worst week since the beginning of June.
The Dow Jones Industrial Average (DJI) rose 0.03% to close the
day at 12,815.24. The Standard & Poor 500 (S&P 500) was
up by 0.2% to finish yesterday's trading session at 1,379.85. The
tech-laden Nasdaq Composite Index gained 0.3% to end at 2,904.87.
The fear-gauge CBOE Volatility Index (VIX) rose 0.7% to settle at
18.61. Consolidated volumes on the New York Stock Exchange,
American Stock Exchange and Nasdaq were roughly 6.6 billion
shares, slightly higher than the daily average of 6.52 billion
shares. Declining stocks beat the advancers on the NYSE; as for
50% stocks that fell, 47% stocks moved higher.
Benchmarks finished in the green following two consecutive
days of losses. However, Friday's modest gains failed to save the
benchmarks from suffering weekly losses. For the week, the Dow
fell 2.1%, the S&P 500 shed 2.4% and the Nasdaq lost 2.6%. At
the beginning of the week investors were worried about the
outcome of the Presidential election but after Barack Obama's
re-election investors have shifted their focus to the impending
fiscal cliff debate.
Meanwhile, Thomson Reuters/University of Michigan reported in
a preliminary reading that the consumer sentiment index has
jumped to its highest level since July 2007 in November.
According to the report, consumer sentiment increased to 84.9 in
November from 82.6 in October. This was above the consensus
estimate of 82.1.
President Obama has asked top Democratic and Republican
leaders this week to commence discussion on the impending fiscal
cliff. Speaking on the issue following his re-election, President
Obama said: "I'm not wedded to every detail of my plan. I'm open
to compromise, I'm open to new ideas, I'm committed to solving
our fiscal challenges, but I refuse to accept any approach that
isn't balanced." Once again, he emphasized that rich Americans
will have to pay more tax
U.S. markets were badly hit for the week ending November 9, as
investors remained concerned whether the fiscal cliff of $600
billion in spending and tax increases would be resolved in time.
According to experts and the Congress Budget Office, this need to
be successfully negotiated; otherwise it could result in another
Separately, the U.S. Census Bureau reported that total
inventories of merchant wholesalers rose by 1.1% from August to
$494.2 billion in September. Inventories for durable goods
increased 0.9% in September, whereas inventories of metals and
minerals, excluding petroleum, increased 1.9% from August.
Inventories of nondurable goods rose by 1.4% in September.
On the international front, investor apprehension continued
over the Euro zone debt crisis. According to the German economy
ministry, growth in Germany will decrease in the coming two
quarters as companies delay investment. Meanwhile, France's
central bank warned that recession may hit France by the end of
Coming to the sectors, the Technology SPDR (XLK) surged 0.5%.
Stocks such as Apple Inc. (NASDAQ:
), Google Inc (NASDAQ:
), SanDisk Corporation (NASDAQ:
), Digi International Inc. (NASDAQ:
) and Microsoft Corporation (NASDAQ:
) rose 1.7%, 1.7%, 0.3%, 0.9% and 0.1%, respectively.
The Utilities SPDR (XLU) lost 0.6% and was the major loser
among S&P 500 industry groups. Stocks such as Exelon
), The Southern Company (NYSE:
), NextEra Energy, Inc. (NYSE:
), TECO Energy, Inc. (NYSE:
) and Duke Energy Corp (NYSE:
) lost 1.8%, 0.5%, 0.3%, 0.8% and 1.0%, respectively.
APPLE INC (AAPL): Free Stock Analysis Report
DIGI INTL INC (DGII): Free Stock Analysis
DUKE ENERGY CP (DUK): Free Stock Analysis
EXELON CORP (EXC): Free Stock Analysis Report
GOOGLE INC-CL A (GOOG): Free Stock Analysis
MICROSOFT CORP (MSFT): Free Stock Analysis
NEXTERA ENERGY (NEE): Free Stock Analysis
SANDISK CORP (SNDK): Free Stock Analysis
SOUTHN COMPANY (SO): Free Stock Analysis
TECO ENERGY (TE): Free Stock Analysis Report
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