The Dow and S&P 500 added modest gains for the second
consecutive day following a positive consumer confidence report and
a decline in Italian borrowing costs. However, the Nasdaq missed
out on a seat in the green and logged its eighth consecutive fall
out of the last nine trading sessions.
The Dow Jones Industrial Average (DJIA) edged up 0.3% to settle
at 11,555.63. The Standard & Poor 500 (S&P 500) gained 0.2%
and closed yesterday's trading at 1,195.19. The Nasdaq Composite
Index failed to join the gainers and declined 0.5% to finish the
day at 2,515.51. The fear-gauge CBOE Volatility Index (VIX) dropped
further yesterday and is just over the key level of 30. The Street
seemed less busy as consolidated volumes remained low once again
with 6.73 billion shares changing hands on the New York Stock
Exchanges, Amex and Nasdaq, versus the daily average of 7.96
billion shares. On the NYSE, decliners outnumbered the advancers by
a ratio of 15 to 14.
It was not one of those familiar days when lingering European
debt concern dampened investor sentiment. But domestic economic
reports helped the markets register their second consecutive day of
gains. Consumer confidence data not only topped the estimates but
the index recorded its highest level since July this year.
According to the Conference Board, the Consumer Confidence Index
increased to 56.0 in November from 40.9 in October. The index also
enjoyed an upward movement contrary to the downtrend in October and
significantly topped the consensus estimates of a reading of 44.5.
Additionally, the Present Situation Index increased to 38.3 from
27.1, and the Expectations Index jumped to 67.8 from 50.0.
The Director of The Conference Board Consumer Research Center,
Lynn Franco, said: "Confidence has bounced back to levels last seen
during the summer (July 2011, 59.2). Consumers' assessment of
current conditions finally improved, after six months of steady
declines. Consumers' apprehension regarding the short-term outlook
for business conditions, jobs and income prospects eased
considerably. Consumers appear to be entering the holiday season in
better spirits, though overall readings remain historically
weak".
The strong consumer confidence report comes a day after the
markets posted strong gains spurred by record setting Black Friday
weekend shopping. Retail data and consulting firm ShopperTrak
confirmed a 6.6% hike in sales on Black Friday, reflecting a
significant increase in the number of shoppers going to the stores
or hitting the 'buy' button on retailer websites. According to The
National Retail Federation, a record breaking 226 million shoppers
hit stores and websites over the Black Friday weekend,
significantly higher than 212 million last year.
While the retailers had a posted strong upward movement in their
share prices on Monday, it was interesting to note their reactions
following the consumer confidence reading. SPDR S&P Retail (
XRT
) shed 0.1% yesterday, but several retailers closed with
significant gains. Among the gainers were J. C. Penney Company,
Inc. (NYSE:
JCP
), Wal-Mart Stores Inc. (NYSE:
WMT
), Macy's, Inc. (NYSE:
M
) and Target Corp. (NYSE:
TGT
) and they were up 0.6%, 1.6%, 0.6% and 1.2%, respectively.
However, they were countered by strong declines in stocks like Saks
Incorporated (NYSE:
SKS
), Bon-Ton Stores Inc. (NASDAQ:
BONT
), Dillard's Inc. (NYSE:
DDS
) and Nordstrom Inc. (NYSE:
JWN
) which declined by 3.0%, 5.7%, 6.8% and 1.2%, respectively.
Meanwhile, investors chose to remain optimistic about European
debt concerns as they expect the meet of the European officials to
have a favorable outcome. Yesterday, in a bond auction, Italy paid
over 7% on 10-year bond yields, a highly unsustainable level, but
borrowing costs dropped somewhat from earlier highs. Surging
borrowing costs is a significant headwind for the nation and Spain,
Germany and France are also reeling under similar pressure.
BON-TON STORES (
BONT
): Free Stock Analysis Report
DILLARDS INC-A (
DDS
): Free Stock Analysis Report
PENNEY (JC) INC (
JCP
): Free Stock Analysis Report
NORDSTROM INC (
JWN
): Free Stock Analysis Report
MACYS INC (M): Free Stock Analysis Report
SAKS INC (SKS): Free Stock Analysis Report
TARGET CORP (TGT): Free Stock Analysis Report
WAL-MART STORES (WMT): Free Stock Analysis
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