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Market Recap: Recession Warnings, Weak ISM Figures, Markets Fall


Corporate profits are already in a recession. An economic one looms. Stocks fall.

Stocks fell on the first trading day of December. The Dow Industrials fell -57 points or -0.43% to 13314, the S&P 500 fell -8.7 points, or -0.59% to 1472, and the Nasdaq Composite fell -23.8 points or -0.90% to 2637.

Boo began the morning with an advantage today as a report by Merrill Lynch (MER) economist David Rosenberg showed that corporate profits are already in a recession. With high energy prices and high labor costs in addition to slowing revenues, earnings from companies in the S&P 500 slid almost 25% in the third quarter, the largest year-over-year decline in over five years. (Bloomberg) The figure had some believing that an economic recession was not too far off. Toddo noted on the Buzz that FedEx (FDX) CEO Fred Smith didn't believe that even global growth could save the U.S. from an economic slowdown. Nonetheless, cyclical stocks were largely mixed. Boeing (BA) fell -0.81%, United Technologies (UTX) gained +0.21%, and Caterpillar (CAT) added +0.22%. Read Toddo's Monday Morning Quarterback for his take on the markets.

In other areas, auto makers failed to reassure investors on the health of the consumer. General Motors (GM) said domestic November sales fell 11% while Ford Motor (F) showed an increase of +0.4%. GM shares closed -4.09% and Ford fell -3.46%. Professor Depew noted the selling pressure in Ford was more due to a lack of news coming from the company as an analyst cited an unknown blogger who said that "anyone in the market for a minivan or SUV should consider the Ford Edge."

In economic data, the Institute for Supply Management's factory index fell to 50.8, largely in-line with expectations. ISM prices paid came in at 67.5 versus expectations of 65.5. Professor Depew notes the sliding dollar is a cause for much of the lackluster numbers. Read his Five Things You Need To Know for more insight.

In commodities, Crude oil reversed and added +0.60 to 89.31. Silver added +0.05 to 14.21, and gold added +5.60 to 794.70. Copper fell -10.60 to 307.85.

For more summaries, click on Minyanville's Buzz Bits.

Idea Flow

Below is a recap of some of the idea flow on today's Buzz & Banter. Please note that stocks may appear in both bullish and bearish categories, due to long and short term trades by our many Minyanville professors.

Some bullish trade or investment ideas: ATVI, C, NBIX, POSS, GS, MA, BSC, UAPH, AGV, AVD, MGO CN, VT CN, KWS GR, YARIY, XMSR, SIRI, AMZN, FLIR, FSLR

Some bearish trade or investment ideas: SPX, CFC, CYCC, AAPL, WYNN, LVS, FXI, AMGN, DNA

Hope you all had a Happy Monday! Have a great night!
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No positions in stocks mentioned.

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