Markets Drift to Pre-Christmas Stalemate

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Published December 23, 2010

| FOXBusiness

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Wall Street limped to a very quiet deadlock on Thursday as an avalanche of mixed economic indicators failed to deliver a lump of coal to either the bulls or the bears ahead of the Christmas weekend.

Today's Markets

The Dow Jones Industrial Average rose 14.00 points, or 0.12%, to 11573.49, the Standard & Poor's 500 declined 2.07 points, or 0.16%, to 1256.77 and the Nasdaq Composite slid 5.88 points, or 0.22%, to 2665.60. The FOX 50 lost 0.68 points, or 0.08%, to 898.11.

The mini gains on the Dow left the benchmark index at its best level since August 2008, while the S&P 500 and Nasdaq Composite had their five-day win streaks snapped.

Underscoring just how quiet it was on Wall Street, the blue chips swung in an extremely tight trading range of just 38 points. 

The slow day in the markets can't be chalked up to a lack of catalysts as traders who did show up for work learned consumer sentiment hit a six-month high in December, new home sales posted modest gains in November and personal spending continued to improve in recent months. 

But with the markets closed on Friday in observance of Christmas, Wall Street mostly dribbled out the clock and ended largely unchanged.

About half of the Dow's 30 members ticked higher, led by Alcoa (AA) and Hewlett-Packard (HPQ). The index's weakest links were Bank of America (BAC) and Walt Disney (DIS). 

The Nasdaq Composite posted slight losses as some tech stocks like Logitech (LOGI) and Garmin (GRMN) lost ground.

U.S. markets hit session lows as selling in what had been a red-hot financial sector gained momentum. The group was led lower by insurers such as American International Group (AIG) and by banking giant Bank of America, which has been among the Dow's best performers in recent weeks.

Wall Street’s hopes for a strong holiday-shopping season could be boosted a bit by the final December reading of the Reuters/University of Michigan consumer sentiment index. The survey inched up from 74.2 to 74.5 -- marking the highest reading since June. Consumer discretionary stocks like Ford (F) and Macy's (M) closed mostly lower despite the data. 

Also on the consumer front, the government said personal spending rose 0.4% in November, nearly meeting expectations. The government also upwardly revised its October spending from 0.4% to 0.7% -- the largest rise in more than a year. 

Meanwhile, the Commerce Department said new home sales rose by 5.5% in November to an annual rate of 290,000 units, missing expectations for 300,000. The government said the median sales price declined by 2.7% in November from the year before and it lowered its reading for October sales activity. Home builders like Toll Brothers (TOL) and Pulte (PHM) closed sharply lower amid disappointment about the sliding prices.

At the same time, the Labor Department said weekly jobless claims declined by 3,000 last week to 420,000, essentially matching expectations. Continuing claims, which are filed by those out of work for more than a week, tumbled by 103,000 to 4.06 million. 

Also, the Commerce Department said durable goods orders, which measure purchases of big-ticket items like refrigerators, slid 1.3% in November, more than economists had forecasted. However, when transportation is excluding, orders jumped 2.4% and the government upwardly revised the same figure for October.

In the commodities complex, crude oil hit a new 26-month high, jumping 89 cents a barrel, or 0.97%, to $91.37. Gold declined $6.80 a troy ounce, or 0.49%, to $1,380.00.

Corporate Movers

Jo-Ann Stores (JAS) reached a deal to be taken private by Leonard Green for $1.6 billion, or $61 a share. The leveraged buyout places a 34% premium on the fabric and craft store operator. Jo-Ann Stores will have through February 14 to seek alternative deals.

Bed Bath & Beyond (BBBY) soared 5% a day after beating the Street with EPS of 74 cents and an 11.1% rise in sales to $2.19 billion. The retailer also issued in-line guidance for the current quarter and approved a $2 billion share repurchase.

Allied Irish Banks (AIB) became the fourth Irish lender to effectively be nationalized after the Irish government unveiled a plan to recapitalize it by 3.7 billion euros. The bank needs more cash to meet regulatory capital requirements by the end of the year. The move will hike the Irish stake in Allied from 18.6% to 92.8%.

Comcast’s (CMCSA) deal to acquire a majority stake in General Electric’s (NYSE:GE) NBC Universal received conditional approval from the Federal Communication Commission’s top official. Conditions would reportedly relate to online video, program access and program carriage. The deal also needs to get a green light from the Department of Justice.

Boeing (BA) said it plans to resume its 787 Dreamliner flight testing after making design changes in the wake of an electric fire on a plane last month.  The first delivery of the first Dreamliner, which has been plagued by countless delays, is expected to be delayed again.

Constellation Brands (STZ) unloaded 80% of its Australian and U.K. wine business to private equity firm Champ for $290 million. Constellation, the world’s largest wine maker, said it will keep a 20% stake in the business that sells Hardys and Barossa Valley Estate brands.

Deutsche Bank (DB) said it is in exclusive talks to sell its BHF-Bank to Liechtenstein’s state-owned LGT Group. The deal is set to be finalized by the end of the first quarter, but Deutsche Bank didn’t put a price tag on the deal.

General Electric placed a $500 million price tag on the second phase of its Hudson River PCB dredging project. After “intensive and constructive discussions" with the EPA, GE said it has advised the agency it will perform the second and “final phase” of the project.

Global Markets

The U.K.'s FTSE 100 rose 0.21% to 5996.07, France's CAC 40 sank 0.21% to 3911.32 and Germany's DAX slipped 0.14% to 7057.69.

In Asia, Tokyo's Nikkei 225 was closed for a holiday, Hong Kong's Hang Seng declined 0.62% to 22903.00 and China's Shanghai Composite lost 0.79% to 2855.22.

URL

http://www.foxbusiness.com/markets/2010/12/22/waiting-data-crush-futures-pause/