Markets failed to sustain the morning's gains as a late sell
off in Microsoft's shares and investors' apprehensions about the
fiscal cliff dragged benchmarks into the red. The initial gains
were propelled by better-than-expected quarterly results from
Home Depot. Meanwhile, Euro zone's finance ministers and
International Monetary fund officials met in Brussels, where they
failed to reach any conclusion on Greece's economic woes. The
technology sector was the biggest loser among the S&P 500's
industry groups.
The Dow Jones Industrial Average (DJI) dropped 0.5% to close the
day at 12,756.18. The Standard & Poor 500 (S&P500) was
down 0.4% to finish yesterday's trading session at 1,374.53. The
tech-laden Nasdaq Composite Index tumbled 0.7% to end at
2,883.89. The fear-gauge CBOE Volatility Index (VIX) dropped 0.2%
to settle at 16.65. Consolidated volumes on the New York Stock
Exchange, American Stock Exchange and Nasdaq were roughly 6.2
billion shares, lower than the year-ago daily average of 6.52
billion shares. Declining stocks easily outpaced the advancers on
the NYSE; as for 66% stocks that fell, only 31% stocks moved
higher.
Markets opened in the red but had entered the green for a while
following better-than-expected quarterly results from The Home
Depot, Inc. (NYSE:
HD
). The company's shares surged 3.6% after quarterly profits
outpaced the Street's estimates. Shares jumped to their highest
level since April 2000.
Meanwhile, investors' apprehensions about a timely solution to
the fiscal cliff issue continued to affect the markets.
President Barack Obama met labor and civic leaders on Tuesday to
discuss the situation. After the meeting, labor union leaders
said President Obama emphasized that rich Americans will have to
pay more tax while rates for U.S. middle class families will
decline. Labor leaders are also planning to pressurize
Republicans so that they agree to Obama's plans.
Richard Trumka, President of The American Federation of Labor and
Congress of Industrial Organizations (AFL-CIO), said: "We are
very, very committed to making sure that the middle class and
workers don't end up paying the tab for a party that we didn't
get to go to and the president is committed to that as well".
Obama will meet business executives on Wednesday, and will meet
top Republican and Democratic leaders on Friday at the White
House.
On the international front, International Monetary Fund (IMF)
officials met Eurozone finance ministers in Brussels to discuss
the Eurozone debt crisis. IMF chief Christine Lagarde said Greece
should reduce its debt to GDP ratio to 120% by 2020. However,
Eurozone finance minister said Greece should be given two extra
years to reduce its debt burden. According to Eurozone finance
Minister Jean-Claude Juncker, IMF and Eurozone finance ministers
will meet again on November 20, where they will decide whether
the time limit for Greece to reduce its debt burden will be
changed to 2022. Meanwhile, Eurozone finance ministers postponed
the much needed $40 billion installment of Greece's bailout loan.
Benchmarks' drop into the red was also due to a sell off in
Microsoft Corporation's (NASDAQ:
MSFT
) shares. Shares tumbled 3.2% following the exit of Steven
Sinofsky, who was heading the Microsoft windows division. The
technology SPDR (XLK) fell 0.5% and was the major loser among
S&P 500 industry groups. Stocks such as Hewlett-Packard
Company (NYSE:
HPQ
), International Business Machines Corp. (NYSE:
IBM
), Oracle Corporation (NASDAQ:
ORCL
) and Adobe Systems Incorporated (NASDAQ:
ADBE
) lost 2.0%, 0.5%, 0.9% and 0.5%, respectively.
After suffering back-to-back losses, the utilities sector
finished in the green and was the major gainer among S&P
500's industry groups. The Utilities SPDR (XLU) surged 0.4%.
Stocks such as Duke Energy Corp (NYSE:
DUK
), The Southern Company (NYSE:
SO
), NextEra Energy, Inc. (NYSE:
NEE
), TECO Energy, Inc. (NYSE:
TE
) and PPL Corporation (NYSE:
PPL
) rose 0.9%, 0.9%, 0.5%, 0.2% and 0.2%, respectively.
ADOBE SYSTEMS (ADBE): Free Stock Analysis
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DUKE ENERGY CP (DUK): Free Stock Analysis
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HOME DEPOT (HD): Free Stock Analysis Report
HEWLETT PACKARD (HPQ): Free Stock Analysis
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INTL BUS MACH (IBM): Free Stock Analysis
Report
MICROSOFT CORP (MSFT): Free Stock Analysis
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NEXTERA ENERGY (NEE): Free Stock Analysis
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ORACLE CORP (ORCL): Free Stock Analysis
Report
PPL CORP (PPL): Free Stock Analysis Report
SOUTHN COMPANY (SO): Free Stock Analysis
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TECO ENERGY (TE): Free Stock Analysis Report
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