Consumer-Driven, Energy Stocks Send Dow Higher, But Nasdaq Stumbles


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A report on consumer confidence that blew past expectations, coupled with a strong kickoff to the holiday shopping season, lifted consumer-driven blue chips, but technology shares weighed on the Nasdaq.

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Today's Markets 

The Dow Jones Industrial Average climbed 38.5 points, or 0.29%, to 11,558, the S&P 500 gained 2.9 points, or 0.24%, to 1,195 and the Nasdaq Composite fell 11.6 points, or 0.47%, to 2,516.

Consumer-driven shares like Home Depot (NYSE:HD), Hewlett-Packard (NYSE:HPQ) and Coca Cola (NYSE:KO) soared on the back of the strong data.

Several energy companies, including oil giants ExxonMobil (NYSE:XOM) and Chevron (NYSE:CVX), along with smaller ones like Halliburton (NYSE:HAL) posted particularly strong performance as well as crude oil futures teetered on the $100 mark.

However, the financial sector struggled, with JPMorgan Chase (NYSE:JPM) and Bank of America (NYSE:BAC) weighing the Dow down.  In fact, BofA closed at the lowest level since March 2009.

Technology companies like Cisco (NASDAQ:CSCO) and Netflix (NASDAQ:NFLX) were sharply to the downside as well, which attributed to the Nasdaq's lackluster performance.

On the economic front, consumer confidence soared in November to the highest level since July, according to a report from the Conference Board.  The gauge hit 56 from 40.9 in October, compared with expectations of a much smaller rise to 44.  These data come on the heels of a very strong showing by retailers on the key Thanksgiving weekend, and Cyber Monday.

"This is a relatively good report, especially at this time of year," IHS Global Insight Senior Principal Economist Chris Christopher wrote in a research note. "The boost in consumer mood helps holiday sales, and retailers need all the help they can get.".

Federal Reserve Vice Chairman Janet Yellen also made comments on Tuesday that were seen as "dovish," and pointing to the possibility of further expansionary monetary policy by the central bank, market participants said.

The "comments suggested that [Yellen] remains in the camp of FOMC members potentially inclined to favor a further loosening of monetary policy in the near term if the outlook does not brighten or if downside risks increase," analysts at Barclays Capital wrote in a note to clients.

The Federal Reserve ended its controversial asset-buying program, often referred to as QE2, in June and has since began lengthening the maturity of its balance sheet.

The S&P/Case-Shiller composite index of 20 metropolitan areas shows home prices fell 0.6% in September on a non-seasonally adjusted basis, missing estimates of a 0.1% increase.  Prices were off by the same amount on a seasonally-adjusted basis, compared with expectations of no change.  Compared to last year, prices were down 3.6%, a swifter fall than the 3% economists anticipated.

Home prices have been negatively affected by weak demand, tight lending conditions and a high supply of homes on the market.

American Airlines, and its parent company AMR (NYS:AMR), filed for Chapter 11 bankruptcy protection in U.S. Bankruptcy Court on Tuesday.

The company made the move to "become a more efficient, financially stronger, and competitive airline," Thomas Horton, incoming Chairman and CEO of AMR and American Airlines said in a release. As part of the transition, former Chairman and CEO Gerard Arpey will retire, and will be succeeded by Horton.

As has been the case in many sessions prior, traders have been focused on Europe's debt crisis.

Italy sold €7.5 billion at a bond auction on Tuesday, which is at the high range of the €5 to €8 billion target, indicating relatively strong demand.  However, the country was forced to pay yields that were both well above what it had paid in prior auctions, and considerably higher than the 7% level on numerous maturities.  The higher the yield the country pays, the higher its borrowing costs, and therefore the greater the chances that it won't be able to finance itself on the private markets.

European blue chips rose 0.56% while the euro climbed 0.11% to $1.333.

Energy markets were higher following big gains in the prior session.  The benchmark crude oil contract traded in New York rose $1.58, or 1.6%, to $99.79 a barrel.  Wholesale RBOB gasoline gained 2 cents, or 0.83%, to $2.54 a gallon.

In metals, gold rose $4.40, or 0.26%, to $1,719 a troy ounce. Treasury yields continued rising for a second-straight day. The benchmark 10-year note yields 2.005% from 1.983%.

Foreign Markets

European blue chips rose 0.56%, the English FTSE 100 gained 0.46% to 5,337 and the German DAX climbed 0.95% to 5,800.

In Asia, the Japanese Nikkei 225 soared 2.3% to 8,478 and the Chinese Hang Seng jumped 1.2% to 18,256.

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