By Anora Mahmudova and Barbara Kollmeyer, MarketWatch Jobless
claims spike, consumer sentiment dips in November
NEW YORK (MarketWatch)--The S&P 500 and Dow Jones Industrial
Average ended slightly higher on Wednesday, scoring their 47th and
30th record closes this year, respectively.
Trading on Wall Street was thin with many participants taking
off early for the Thanksgiving holiday. Markets will reopen on
Friday for a shortened session ending at 1 p.m.
The S&P 500 (SPX) closed 5.74 points, or 0.3%, higher at
2,072.77. The Dow Jones Industrial Average (DJI) added 12.81
points, or 0.1%, to 17,827.75.
Gains were led by telecoms and technology sector stocks, but a
big drop in energy companies' shares capped the advance. Energy
sector stocks sold off due to falling oil prices, driven by
concerns about what the Organization of the Petroleum Exporting
Countries will do about oil oversupplies. The Energy Select Sector
SPDR Fund ETF (XLE) fell 1.3%.
The Nasdaq Composite (RIXF) ended the day up 29.07 points, or
0.6% at 4,787.32.
Market reaction to mostly disappointing economic reports was
muted, as much of the data were shrugged off as volatile and in
some cases backward looking.
Need to Know: Happy wealthy Thanksgiving and steer clear of
Herbalife
Eric Wiegand, senior portfolio manager at U.S. Bank Wealth
Management, described Wednesday's action as 'big data, little
action'.
"It looks like investors are more worried about holiday travels
than about economic data. The U.S. economy is muddling through, but
it is still doing better than our biggest European and Asian
trading partners," Wiegand said.
Economic reports on Wednesday were mostly disappointing. Weekly
jobless claims spiked to the highest level in 11 weeks, in a sign
that hiring may have slowed down a bit.
Consumer spending climbed by less than expected in October,
while inflation remained below the Federal Reserve's target rate of
2%. Durable-goods orders rose, but thanks largely to orders for
military aircraft.
The Chicago purchasing-managers index for November fell, due to
a sharp drop in new orders. The University of Michigan Consumer
sentiment index for November fell slightly.
Sales of new single-family homes ticked up 0.7% in October to a
seasonally adjusted annual rate of 458,000, the fastest pace in
five months, the government reported Wednesday. Meanwhile, a gauge
of pending home sales fell 1.1% in October, signaling that upcoming
deals could slow down, the National Association of Realtors
reported Wednesday.
Long the S&P 500, and oil worries: Chris Weston, chief
market strategist at IG, has pointed out that funds are running the
second-lowest short positions in S&P 500 futures for the year,
while the cash market shows 88% of stocks are now above their
50-day moving average. That figure stood at 13% in mid-October, he
said in a note.
This isn't screaming "selloff", as 20% of companies are still
trading below their 200-day moving averages, said Weston in a note.
But "a short-term move lower of 3-5% would be healthy for the next
stage of the bull market to materialize, especially with the U.S.
index trading at peak EBIT margins," he added.
Oil prices(CLF5) fell in a choppy session, as investors waited
for Thursday's OPEC meeting. See: Saudi Arabia says oil market will
'stabilize itself'
Analysts at Jefferies said don't bet on any agreement coming out
of OPEC that would be "big enough to spur a rally in Brent prices"
in the near term. See: Oil traders are clearing out ahead of the
OPEC decision
Stocks to watch: Deere & Co.(DE) shares fell 0.9% after the
company posted better-than-expected fiscal first-quarter results
but said it expects sales of equipment to fall by more than a
fifth.
Hertz Global Holdings(HTZ) shares sank 3.9% despite the news
that activist investor Carl Icahn increased his stake in the car
rental company by a quarter.
TASER International (TASRE) surged 6.2% after the maker of
electrical weapons used in law enforcement, announced that the
Winston-Salem Police Department is purchasing the company's body
cameras and other services.
Also read: Movers & Shakers
Other markets: European stocks finished flat. Japanese stocks
broke a winning strength as the yen perked up against the
dollar(USDJPY). Gold prices(GCZ4) were unchanged.
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