Due to options expiration forces, trading was erratic throughout the day. Early on, the S&P 500
peaked into positive territory, but was quickly met with selling pressure as industrial production and capacity utilization figures showed a severe slowdown, despite the effects of Hurricane Sandy. Also in the morning, data on foreign purchases of US securities was reported. The data, which is from September, showed heavy foreign buying in US equities and net selling in Treasuries. Typically, foreign buyers, especially official sources, are heavy buyers of US Treasuries. Foreign buyers purchased $23.81 billion in stocks and were net sellers of $17.34 billion in Treasuries.
Even though much of the economic data in the morning was negative, House Speaker Boehner, Minority Leader Pelosi, and Senate Leader Reid held a press conference around noon, appearing very optimistic about resolving the US fiscal issues. This was viewed very positively by the market, driving the S&P 500 from down 1% to up nearly 0.5%.
(NASDAQ:AAPL) came under extreme pressure in the morning, but managed to stage an aggressive comeback after dipping close the $500 level. Apple rallied back to close the day at $527.68, up 0.5% on the day.
(NYSE:BP) will pay an additional $4.5 billion to the Department of Justice and SEC regarding criminal claims related to the Deepwater Horizon oil spill in 2010. This brings the overall total of claims to $12 billion with a potential $17.6 billion in outstanding claims. BP's stock fell modestly on the release of this information
After being punished for the past two weeks, dividend stocks, mREITs, REITs, closed end funds, and MLPs recovered sharply. Some of these securities have fallen over 30% as the prospect of increased taxes on dividends associated with the removal of the Bush tax cuts. Many of these securities sport a yield of up to 14%.
Tomorrow's Financial Outlook
Over the weekend, China will release data on property prices for the month of October. Last month, prices in more than half of the 70 cities fell.
On Monday, the NAHB will report its monthly housing market index. The index tracks builder and real
estate agent optimism. The index is expected to remain unchanged at 41, near levels not seen since 2006. Also in homes data for Monday is existing home sales, expected to remain unchanged on an annual basis.
In earnings, Lowe's
(NYSE:LOW), Tyson Foods
(NYSE:TSN), Urban Outfitters
(NASDAQ:A), and Nuance
(NASDAQ:NUAN) will report.
For a complete breakdown of events, economic data, and earnings reports for the week ahead, check out Minyanville's Trading Radar.
No positions in stocks mentioned.
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