Despite an ugly start to the day, the S&P 500
(INDEXSP:.INX) finished modestly higher following three straight days of decline.
In pre-market trading, sentiment was most definitely negative. Ratings agency Fitch said the US risks entering a recession unless policymakers implement a solution to the fiscal cliff next year. Meanwhile, Europe was in a funk with Reuters reporting that a senior EU official said that finance ministers are unlikely to make a decision to release emergency funds to Athens at an important meeting on Monday.
We also saw continued selling in momentum icon Apple
(NASDAQ:AAPL) and crude oil, with strength in US Treasuries and German bunds, which indicated a risk-off character to trading.
However, it appears that the market had priced in significant negativity in the preceding days, given our lousy earnings season and growing uncertainty across the pond in Europe.
By early afternoon, the S&P rallied 1% to 1391 with Apple pulling the Nasdaq
(INDEXNASDAQ:.IXIC) up to 2931 before President Obama made a speech in which he made it clear that tax increases were very much on the table ahead of the fiscal cliff. That triggered an immediate sell-off.
Nonetheless, it was a somewhat healthy day with solid momentum in technology stocks and key financials like JPMorgan
(NYSE:JPM) and Bank of America
In economics, the November University Michigan Sentiment Survey was ahead of expectations at 84.9.
The big earnings story of the day was Groupon
(NASDAQ:GRPN), which collapsed under $3 after delivering yet another underwhelming quarterly earnings report.
Monday's Financial Outlook
On Monday, the bond market will be closed in observation of Veterans' Day. There will also be no US economic data releases. In earnings news, we will see reports from homebuilders Beazer Homes
(NYSE:BZH) and DR Horton
(NYSE:DHI) before the open.
No positions in stocks mentioned.
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