YAHOO [BRIEFING.COM]: Disappointing
new home sales numbers caused stocks to surrender opening gains, but a weaker
dollar helped drive stocks back into the green. However, the rebound was
resisted at session highs and left gains to chop their way into the close.
The major indices started the
session in higher ground amid continued broad-based buying that was helped
along by solid gains throughout Europe and Asia. A pullback by the greenback
also provided support; it concluded the session with a 0.5% loss against competing
currencies after it had hit a three-month high in the previous session.
Initial gains came despite a
smaller-than-expected increase in both personal income and spending in
November. They were up 0.4% and 0.5%, respectively. Meanwhile, core personal
consumption expenditures for November were flat. They had been expected to rise
a modest 0.1%.
Stocks weren't able to shrug
off the November new home sales numbers, however. New home sales for the month
fell 11.3% from October to an annualized rate of 355,000 units, which is well
below the rate of 438,000 units that had been widely expected.
The news caused the broader
market to slide in a hurry. Shares of homebuilders had been up nearly 2% ahead
of the report, but saw that gain nearly vanish entirely. They were able to
reclaim some of the gains and finish 0.7% for the better.
Materials stocks and energy
stocks helped lead a broader market recovery, but they were unable to push the
broader market past the session high that was set in the early going. That
high, which marked a new 52-week high for the S&P 500, created a line of
resistance in afternoon action. Still, the two sectors logged gains of 1.5% and
0.5%, respectively.
Support for the sectors came
amid higher commodity prices and energy prices. While a retreat by the dollar
helped both groups, oil got an added benefit from a larger-than-expected weekly
inventory draw of 4.84 million barrels. Oil prices settled 2.9% higher at
$76.59 per barrel.
With only a few days left in
the holiday shopping season, Internet retailers were also in favor. They teamed
with large-cap tech to drive the Nasdaq Composite to another new 52-week
intraday high and closing high.
Financials fell out of favor
this session. The sector settled with a 0.4% loss as diversified banks stocks
(-1.5%) and diversified financial services plays (-1.0%), like Citigroup (C 3.29, -0.05), faltered.
Citigroup saw some of the most
trading volume this session, but that's not saying much given the lack of
overall participation. Fewer than 800 million shares exchanged hands on the
NYSE this session. The 50-day average stands just above 1.2 billion shares. The
lack of participation should not come as a surprise ahead of the Christmas
holiday, but market watchers should note that lack of trading volume is often
tantamount to a lack of conviction among the investing community, so swings by
stocks on light volume shouldn't necessarily be considered telling signs of
market direction. DJ30 +1.51 NASDAQ +16.97 NQ100 +0.7% R2K +1.2% SP400 +0.7%
SP500 +2.57 NASDAQ Adv/Vol/Dec 1835/1.59 bln/855 NYSE Adv/Vol/Dec 2161/786
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