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Energy Deal Saves the Market's Bacon on Volatile Day


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

The S&P 500 hit a new all-time high at 2046.18 this morning, starting a fierce tug of war between the bulls and bears.

Technicians were alarmed by the S&P breaking through yesterday's low to touch 2030.44, but buyers eventually stepped in, aided by deal news in the energy space.

Energy stocks closed out the day as the worst performing major sector, but the group spiked late in the day on a Dow Jones report that Halliburton (HAL) is in talks to acquire Baker Hughes (BHI), a revelation which sent shares of both companies soaring.

The Energy Select Sector SPDR ETF (XLE) finished down 1.3% on the day as the deal news wasn't good enough to overcome oil collapsing below $75.

But the bounce in energy did help push the S&P fractionally into the green at 2039.33.

Retail names were strong courtesy of Wal-Mart (WMT), which popped 4.7% after reporting better-than-expected third-quarter sales. The news boosted other sector names like (AMZN) and Target (TGT), and the Market Vectors Retail ETF (RTH) rose 0.85%.

The Russell 2000 (RUT) was a notable disappointment with a 0.93% decline. Many market observers remain concerned with the Russell's inability to recapture earlier highs the way the S&P 500 and Dow Jones Industrial Average (DJI) have.

Additionally, the NASDAQ Biotechnology Index (NBI), which led the way up in 2013 and 2014, sank 0.67%.

One point of concern today was weak data out of China. October retail sales rose 11.5%, slightly below the 11.6% expected, while Industrial Production increased 7.7% vs. the 8.0% consensus. The news weighed on copper prices.

Stateside, Initial Jobless Claims rose to 290,000, slightly worse than the 280,000 consensus. Continuing claims were also above expectations.

Tomorrow's Financial Outlook

October Retail sales will be reported at 8:30 a.m. ET. Following Wal-Mart's positive sales surprise, traders are watching for other signs that consumers are still spending and are being helped by the sharp drop in gasoline prices.

Also on tap tomorrow are October Import/Export Prices, November University of Michigan Consumer Sentiment, September Business Inventories, and Natural Gas Inventories for last week.

Aside from the retail sales report, traders' main point of focus should be the 9:55 ET Consumer Sentiment report.

There are no major earnings reports on tap.

In terms of market activity, traders will once again be looking for stabilization in oil prices, as well as key momentum sectors like small caps and biotech, which have lagged as of late.

Twitter: @Minyanville

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No positions in stocks mentioned.

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