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US Equities Record Third Straight Day of Declines


Today's financial recap and tomorrow's financial outlook.

Industrial production in the euro area declined for the second straight month, causing economists to wonder if growth has peaked. Production fell 1.1% in November from the prior month, the second consecutive month of declines. The UK FTSE100 (INDEXFTSE:UKX) was the worst-performing index in Europe. All major Asian stock indices fell as well.

US equities opened near the flat line but quickly breached 1,775 in the S&P 500 (INDEXSP:.INX) early in the session. Although buyers showed up late in the day, the S&P still closed near the lows of the session. The Dow Jones Industrial (INDEXDJX:.DJI) was the worst US index performer, dropping 0.5%, led by declines in Visa (NYSE:V), Johnson & Johnson (NYSE:JNJ), and Procter & Gamble (NYSE:PG). Five of the 10 basic sectors in the S&P 500 declined, led by a 1.2% drop in consumer staples stocks.

Gold, silver, and palladium all suffered declines of more than 2.5%. The fall was attributed to a reduction in bets on Fed stimulus. The Treasury reopened $13 billion of 30-year bonds today at a high yield of 3.90% on tepid investor demand.

November retail sales rose 0.7% from the prior month, more than the 0.6% estimate, thanks to strong auto, electronics, and furniture sales. However, excluding auto and gas sales, the November YoY gain in sales remained very weak. This comes in addition to retail reports that show more consumers have been doing their holiday shopping earlier in the season.

Lululemon (NASDAQ:LULU) reported earnings before the market open. The stock fell more than 10% on slower reported sales in the third quarter, and guidance for the coming quarter was taken down sharply.

Tomorrow's Financial Outlook

The only notable economic release tomorrow will be the November producer price index. Year-over-year, prices are estimated to rise 0.8% on increases in gas and oil prices. Core prices ex-food and energy are estimated to continue to rise at the same 1.4% annual rate.

The only global economic release will be the UK construction output. There are no scheduled earnings reports.

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