YAHOO [BRIEFING.COM]: Last
Friday's mixed finish was extended into this session's early action as a lack
of market-moving headlines left participants with few cues for trade. That left
the day's direction to be largely determined by the U.S. dollar, which came
into closer focus amid comments from Fed Chairman Bernanke.
In a speech before the
Economic Club of Washington D.C., Fed Chairman Bernanke indicated that the FOMC
is looking to keep interest rates low for an extended period of time. The
comment is consistent with the Fed's previous statements, but it helped quell
concern that the better-than-expected November jobs figures released on Friday
would lead the Fed to raise interest rates sooner than later. Such concern had
caused some profit taking on Friday.
Bernanke's comments helped
drive the greenback from a one-month high against competing currencies to a
0.6% loss. Stocks responded with a climb to afternoon highs, where they traded
with modest gains.
However, stocks were unable to
extend their upturn beyond morning highs and eventually rolled over. Their
downturn also came in conjunction with greenback's move off of its lows -- the
Dollar Index finished with a 0.2% loss. The broader equity market settled above
its session low with a modest loss.
Financials felt considerable
weakness for most of the session; they fell to a 1.6% loss. The financial
sector was weighed down by weakness in shares of banks (-1.6%) and diversified
financial services outfits (-1.8%). Citigroup (C 4.03, -0.03)
was unable to win favor for the sector's many players after news reports said
the company has asked to repay $20 billion of its bailout funds. Last week's
news that Bank of America (BAC 15.89, -0.39) plans to repay
its $45 billion TARP loan helped win temporary favor for financials.
On a related note, The
Wall Street Journal reported that the total cost of TARP could be cut by
$200 billion.
Telecom was the best
performing sector this session. The sector booked a 1.8% gain, which added to
its gains from last week. Telecom stocks have gained 4.2% during the last six
sessions. That's second only to utilities, which gained 4.6% during that time.
Commodities finished in mixed
fashion. Gold prices settled 0.5% lower at $1164 per ounce, while contract
prices for oil closed 2.0% lower at $73.94 per barrel. However, natural gas
prices surged 8.7% to $4.98 per contract amid reports of the return
of cold weather. Strength in natural gas gave the CRB Commodity Index a
modest 0.1% gain. That put an end to its three consecutive advances.
There was only a small dose of
data this session, but it caused little reaction among market participants. As
expected, consumer credit declined for the ninth consecutive month in October,
but the drop far less than expected. The consensus called for a $9.4 billion
decline, but the actual drop was only $3.5 billion. September's drop in
consumer credit was revised upward to reflect a $8.8 billion decline. The positive
surprise for October and the upward revision to September's figures suggest
that consumer demand for additional funding has not been wiped out as consumers
deleverage themselves. In fact, if the recent trends continue, growth in
consumer credit could actually occur by year's end.
Advancing Sectors: Telecom (+1.8%), Utilities (+0.7%),
Consumer Discretionary (+0.5%), Consumer Staples (+0.1%), Materials (+0.1%)
Declining Sectors: Financials (-1.6%), Tech (-0.5%), Energy
(-0.3%), Health Care (-0.2%), Industrials (-0.1%)DJ30 +1.21 NASDAQ -4.74 NQ100
-0.5% R2K +0.1% SP400 -0.1% SP500 -2.73 NASDAQ Adv/Vol/Dec 1381/1.88 bln/1329
NYSE Adv/Vol/Dec 1630/941 mln/1402