Stock Market Today, Daily and Weekly Updates

Equity markets responded more to forward momentum of the U. S. economy than renewed euro zone debt crisis this past week.

Equities were up for the week. The Dow was up 0.5%, the Nasdaq up 4.1%, and the S&P 500 up 0.9%. The 10-year Treasury yield declined 9 basis points to 1.87% for the week that ended on January 13.

Beige Book – Possible Economic Strength

The Beige Book reported general improvement in economy with national economic activity expanding at a “modest to moderate” pace. Consumer spending picked up and manufacturing continued to expand, albeit, at a slower rate. Residential real estate activity remained steady at a very low level and prices remained stable.

Retail Sales up Marginally

Retail sales in December advanced 0.1 percent, following a 0.4 percent revised gain in November. Excluding automobiles, retails sales actually fell 0.2 percent in December, after increasing 0.3 percent in the previous month. Within the core – which excludes autos and gasoline, building materials, furniture, clothing, and food services led the gains; while electronics and appliance sales dropped.

Business Inventories

Business inventories rose 0.3 percent in November, in line with growth in final demand, and keeping the stock-to-sales ratio unchanged for a fifth month at 1.27. Among components, retail inventories rose 0.3 percent, factory inventories rose a moderate 0.5 percent, while wholesale inventories were up marginal 0.1 percent.

International Trade Deficit Worsened

The U. S. trade deficit in November widened sharply to $47.8 billion from a $43.3 billion revised deficit in October. The trade gap was attributed largely to a jump in oil imports as well as a dip in exports. Exports declined 0.9 percent in November after a 0.7 percent dip in the prior month. Imports rebounded 1.3 percent in November, following a 1.0 percent decline in October.

Consumer Sentiment

Consumer sentiment index continued to extend its improvement to 74.0 at mid-month from 69.9 in December. Consumers seem more upbeat about the current economy and future conditions.

Consumer Credit

Improved consumer confidence was reflected in a whopping $20.4 billion surge in consumer credit in November. Non-revolving credit, up $14.8 billion – attributed largely to car sales. Revolving credit jumped $5.6 billion.

The Week Ahead

U. S. markets will remain closed on Monday to observe Martin Luther King, Jr. Holiday. Tuesday will bring the Empire State manufacturing index, producer price and industrial production reports on Wednesday, consumer prices on Thursday, and week will end with data on residential construction and existing-home sales on Friday.

Markets paused on Wednesday after recent gains as news of German Economy slumping in the fourth- quarter renewed concerns over weakening economy in Europe. Equities finished the day roughly flat.

Snapping out of a two-day winning streak, the Dow Jones Industrial Average fell 13.02 points or 0.1% to 12449.45. Leading laggards for the blue chip index were consumer-staple and energy stocks. Coca-Cola declined 1.9%, Chevron lost 1.2%, and Exxon-Mobil fell 0.8%. Financials and material stocks were the gainers with Bank of America up 3.6%, J. P. Morgan Chase up 1.7% and Alcoa up 2%.

Continuing the winning streak on the fifth consecutive session on Wednesday, the Nasdaq Composite gained a more-respectable 8.26 points or 0.3% to 2710.76. This is the longest winning streak since Oct. 14 for the measure.

The S&P 500 managed a marginal gain of 0.40 point or 0.03% to 1292.48. This accounts for its sixth win in the past seven sessions and its highest close since July 28.

In the corporate news, two years after pulling its web-search engine out of the country over a censorship confrontation with Chinese authorities, Google announced its renewed push to expand in the world’s biggest internet market. Google stock advanced 0.8%.

Eastman Kodak filed lawsuits against Apple and Taiwan’s HTC alleging infringement of patents related to digital-imaging technology. Its stock surged 36% to 82 cents, while Apple stock lost 0.2% to 422.55.

European markets were modestly down, with the Stoxx Europe 600 declining 0.35%, CAC 40 losing 0.19%, Germany’s DAX down 0.17%, while FTSE 100 down 0.45%. Italy’s FTSE MIB managed to close up 0.25%.

Asian bourses were mostly higher. Japan’s Nikkei Stock Average gained 0.3%, while South Korea’s Kopsi Composite declined 0.41%, and China’s Shanghai Composite slipped 0.42%.

Gold futures tacked on $8.20 to $1,639.20 an ounce, while crude oil futures shed $1.37 to settle at $100.87 a barrel.

The euro fell to $1.2706 from $1.2778 of previous session close.

The 10-year Treasury yield fell to 1.905%.

Year 2012 kicked off with mostly encouraging economic reports indicating that recovery is gaining traction.

Equities were up this past week. The Dow was up 1.2% at 12360; the Nasdaq Composite up 2.7% at 2674; and S&P 500 up 1.6^ at 1278 for the week that ended on January 6th, 2012. The 10-year Treasury note yield gained 0.08% to settle at 1.96%.

Unemployment

Unemployment rate in December dropped to 8.5%, its lowest level in almost three years. This is the fourth consecutive month of declining unemployment rate. A relatively healthy 200,000 payroll jobs were added in December, after a revised 100,000 addition in November. The improvement was broad-based. Private sector added 212,000 new jobs, out-of-which, 48,000 were added by goods-producing industries; 17,000 by construction and 23,000 new jobs created by manufacturing. Public sector continued to shed jobs – a decline for 17 of the last 19 months. Government jobs fell 12,000 in December, following a 20,000 dip in November.

Factory Orders

New orders for manufactured goods rose 1.8% in November. Excluding transportation, new orders increased 0.3%. Major part of the overall gain was attributed to aviation.

U.S. manufacturing

The Institute of Supply Management’s manufacturing composite index rose to 53.9 in December from a previous month’s 52.7. The gain in the composite was led by increases in production index, which jumped to 59.9 in December from56.6 of November. Also, ISM’s manufacturing employment index in December climbed to 55.1 from 51.8 of November.

Non-manufacturing index

The non-manufacturing sector is not growing at the same pace as manufacturing. The ISM non-manufacturing composite index inched up to 52.6 in December from 52.0 of November – mere 0.6 points.

Construction Spending

Construction spending in recent months has been on a modest uptrend that started since April 2011. It has increased in six of past eight months. Beating analysts’ expectations, construction spending rose 1.2% in November. Private residential spending in November increased by 2.0%, while public spending rebounded 1.7% for the same month. Private nonresidential construction spending, however, remained unchanged in November.

The Economic Week Ahead

In a light week of economic reports, Monday will bring data on consumer credit; retail sales and business inventories reports on will be released on Thursday; and week will end with international trade data on Friday.

On the last day of Santa Claus rally on Wednesday, U.S. stocks closed slightly higher, erasing losses of the morning caused by European debt woes with encouraging retail and auto sales reports at home.

After a 60 point drop earlier in the session, the Dow Jones Industrial Average managed to gain 21 points or 0.17% to close at 12418.42. 20 out of 30 components of the blue-chip rose. Alcoa, Intel, and Microsoft were leading the gainers, while Verizon Communications, Wal-Mart Stores, and Pfizer were the major laggards.

The Nasdaq Composite declined 0.36 points or 0.01% to 2648.36.

The S&P 500 closed up 0.24 points or 0.02% to 1277.30. Health care led loses on the index. Utilities and financial sectors also fell, while stocks of consumer discretionary advanced a day before retail sales report. Material stocks as well were gainers.

Verizon Communications declined 1.5%. Yahoo lost 3.1%. TiVo jumped 10% after AT&T agreed to pay $215 million to settle litigation and acquire rights to use TiVo’s intellectual property.

Auto makers Ford and General Motors both predicted a rise in sales in 2012, while reporting 11% and 13% gain in sales in 2011. Ford stock advanced 1.5%. GM gained 0.5%.

In other corporate news, Eastman Kodak is reported to be preparing for Chapter 11 protection in coming weeks. Its stock declined.

In Asia, markets were mixed. Japan’s Nikkei Average advanced 1.24%, while Hang Seng, Shanghai Composite, and BSE Sensex, all closed in red.

Despite European Central Bank’s long-term loans worth almost half a trillion euro, renewed concerns over liquidity issues among euro zone banks pulled European markets back. Stocks of big European banks were down. Adding to anguish, Spanish bond yield rose. All major European bourses declined. CAC 40 lost 1.59%; DAX declined 0.89%, FTSE 100 down 0.55%. Breaking a four-day winning streak, pan-European index Stoxx Europe 600 dropped 0.57%.

In the commodities markets, despite a stronger dollar and a day prior to Energy Information Administration’s scheduled weekly inventories report, crude oil futures advanced to an eight-month best $103.27 a barrel. Gold futures settled at $1612.7 a troy ounce.

U. S. Treasury yields closed higher on optimism of improving economy. The benchmark 10-year note yield settled at 1.977%.

After a brief rally, euro declined against the dollar and settled at $1.2940, while yen closed down at 76.72 as well.