YAHOO[BRIEFING.COM]: Stocks
ended a choppy session of listless trading markedly lower as investors failed
to build on the prior week’s gains. The major indices struggled to put
together a sustainable advance for the entire session.
Last week, stocks advanced
nearly 7%, but the advance came amid low trading volume. That
had many wondering if participation would pick up and traders would show
increased conviction now that the holidays have passed. Trading
volume remained relatively low, however. Only 1.3 billion shares were
traded on the NYSE.
Though participation wasn't
what many expected, there were still plenty of headlines to trade around.
Pfizer (PFE 18.17, -0.10) made news when Financial
Times reported the company is willing to acquire a large rival to improve
its financial health. Pfizer indicated its goal is to increase revenue,
which will come under pressure from generic drugs as Pfizer's patents
expire. Despite the prospect of a mega-merger, the health care sector
finished 0.9% lower. Health care is the second largest economic sector in
the S&P 500.
The largest economic sector,
technology, showed modest weakness. Apple (AAPL
94.58, +3.83) provided it leadership after chief executive, Steve Jobs, issued
a statement providing clarity regarding his health, which had been in question
due to ongoing rumors.
Financials traded as laggards
for the entire session before finishing 2.5% lower. Citigroup
(C 7.08, -0.02) and JPMorgan Chase (JPM 29.25, -2.10) had
their estimates cut.
Energy (+1.4%) logged the best
performance of the session, thanks to a 4.4% advance in crude oil
futures. Oil closed near $48.40 per barrel. Crude was up 6.3% at its
session high.
Retailers registered strong
gains as well, though consumer spending remains challenged. Such challenges
underpinned target reductions for Macy's (M 11.66, +0.68) and Target
(TGT 36.14, +1.51). Meanwhile, shares of Best Buy (BBY 30.00,
+0.98) and Amazon.com (AMZN 54.06, -0.30) were upgraded given their
positioning in the current environment.
No doubt, though, conditions
remain tough for automakers. Ford Motor Company (F 2.58,
+0.12) and General Motors (GM 3.71, +0.06) reported December
sales dropped 32.4% year-over-year and 31.4% year-over-year, respectively.
Ford’s results were in-line with the consensus forecast, yet GM’s weren’t as
bad as feared.
Ford and GM have seen their
troubles exacerbated by stiff overseas competition. Still, foreign automakers
aren’t immune to the troubles of the global economy. Toyota Motor (TM
65.62, -0.75) posted a 36.7% year-over-year drop in December sales.
Consumer spending is of
particular concern to economists since it accounts for nearly 70% of U.S.
economic activity. Concerted efforts to stimulate spending are being taken as a
result. That includes recent plans from the Federal Reserve to spur
consumer lending, and now President-Elect Obama is putting together $300
billion in tax cuts for individuals and businesses, according to The Wall
Street Journal.
The tax cuts would likely come
as part of a larger plan that would include improving infrastructure.
Total construction spending
fell 0.6% in December, which isn’t as bad as the 1.4% drop that was widely
expected. Still, larger drops in spending are likely for December and
subsequent months.
Despite the weakness exhibited
by U.S. stocks, the U.S. dollar showed strength. The greenback was
recently indicated 1.0% higher, but was up as much as 1.6% against a basket of
major foreign currencies. That took the dollar index to its highest level
in nearly three weeks, reflecting foreign interest in the U.S. currency, if not
U.S. stocks.DJ30 -81.80 NASDAQ -4.18 NQ100 -0.1% R2K -0.2% SP400 -0.2% SP500
-4.35 NASDAQ Adv/Vol/Dec 1494/1.79 bln/1275 NYSE Adv/Vol/Dec 2086/1.32 bln/1033