The market maintained a slightly bearish bent today after two days of recovering from oversold conditions. S&P futures opened the day slightly lower and hovered around the breakeven point for much of the day. US housing starts rose to an annual rate of 894,000, up from 863,000 last month and well ahead of estimates of 840,000. The release showed solid growth in single family housing and new homes being built.
The highlight of the day was Federal Reserve Chairman Ben Bernanke's speech to the Econ Club of New York in the early afternoon. Because there was no specific mention of further easing actions, as there had been in past speeches to Econ Clubs, the market reacted negatively to the news, temporarily breaching the 200-day moving average. However, this mark was reclaimed shortly thereafter.
US Treasuries sold off heavier than normal today after remaining relatively quiet for the prior two days. While the S&P had risen 3.25% from its intraday low on Friday, the 10-year Treasury yield had only risen 6 basis points, a small move considering the equity rally. Today, however, the 10-year yield rose 5 basis points to finish at 1.66%.
In an early morning earnings report, Hewlett-Packard
(NYSE:HPQ) admitted that its acquisition of enterprise software producer Autonomy had involved serious accounting fraud on the acquired company's part. This fraud cost HP $8.8 billion, including up to $20.4 billion in loss of intangible assets. With the admission, the responsibilities and oversight of CEO Meg Whitman and the prior CEO, Leo Apotheker, were questioned.
Tomorrow's Financial Outlook
While the market is open for a full day tomorrow, it is likely to be a quiet one as the Thanksgiving holiday approaches. Because the exchanges will be closed on Thursday, the weekly initial jobless claims will be released tomorrow morning instead of the normal release on Thursday. Because of disruptions due to Hurricane Sandy, economists are expecting 410,000 claims, still well above the 383,800 4-week moving average, but down from last week's 439,000. Also in economic data, the University of Michigan Consumer Confidence Index will be released tomorrow rather than on Friday as usual. The first estimate of the index earlier this month saw a jump to 84.9 from 82.6.
Global economic data will be on the quieter side. The Bank of England will release the minutes from its monthly monetary policy meeting and the UK will release public sector net borrowing information.
In earnings, Deere
(NYSE:DE) will report before market open.
No positions in stocks mentioned.
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