Sorry!! The article you are trying to read is not available now.
Thank you very much;
you're only a step away from
downloading your reports.

S&P 500 Closes Near Unchanged for Fifth Day


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

Japan's economy entered a technical recession in the third quarter of the year after contracting for the second consecutive time. On an annualized basis, growth fell 1.6% from the prior quarter. Growth dropped 7.3% in the second quarter. The Japanese Nikkei was the worst performing equity index overnight as investors grappled with the idea that even delaying the next sales tax increase would not avert the damage already done to the country's economy.

The US dollar sold off overnight while US Treasuries and the Japanese yen rallied. Those trends were reversed by the time US traders sat down at their desks in the morning. The US dollar finished up 0.39% by the close of equity trading. However, this strength did not elicit a response from oil and precious metals, which closed down by a modest amount.

Natural gas futures rose by 6.4% today after falling last week. Weather forecasts for the Northeast and Midwest turned colder for the rest of the week and through the rest of the month. Temperatures are expected to be as high as 18 degrees tomorrow in Chicago, 29 degrees below normal according to AccuWeather.

US equity futures were lower overnight in sympathy to the drop in the Nikkei. S&P 500 (SPX) futures fell as much as 12 points, but had recovered most of those losses by the open of trading. The SPX finished near unchanged for the fifth consecutive day, continuing a record streak of low volatility. The utilities sector led today thanks to the colder weather forecast increasing usage expectations. Energy and industrial stocks continued to be a drag on the general performance.

Halliburton (HAL) announced plans to purchase Baker Hughes (BHI) for about $34.6 billion in a deal that will be mostly funded by its share price. The deal also came with a $3.5 billion termination fee in case there are antitrust problems, which may cause Halliburton to divest some of its existing assets. As such, its stock was down 12% in today's trading as investors priced in the potential for either a near-term hit to earnings due to the divestitures or the possibility it has to pay the breakup fee.

Tomorrow's Financial Outlook

The major economic report scheduled for tomorrow is the producer price index for October. Economists expect that prices will continue to decline due to the 30%+ drop in commodity prices since the summer. Prices from a year ago are expected to rise 1.2% after a 1.6% increase in the month prior. Also scheduled to be reported are the NAHB survey of homebuilder and realtor sentiment for the month of November and US capital flows.

An economic report that will draw a significant amount of attention overnight is the UK consumer price index for October. Recently, in its Quarterly Inflation Report, the Bank of England substantially downgraded its inflation forecast to reflect lower growth in its trade partners and energy prices. This has caused the country's interest rates to drop considerably as easier policy is expected. Also scheduled is the ZEW survey of German investor economic sentiment, the minutes of the Reserve Bank of Australia's latest meeting, and October China property prices.

Notable earnings reports are from PetSmart (PETM), Home Depot (HD), Dick's Sporting Goods (DKS), Medtronic (MDT).

Twitter: @Minyanville

Follow the markets all day every day with a FREE 14 day trial to Buzz & Banter. Over 30 professional traders share their ideas in real-time. Learn more.
< Previous
  • 1
Next >
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.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.

Featured Videos