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The Bear Takes a Breather as US Stocks Stage a Modest Rally

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

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Today

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 (NYSE:BAC).

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.

Twitter: @Minyanville

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No positions in stocks mentioned.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

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