Market Report: Stock Ticker

Dollar Index drops to 12-month low -- spurs gold prices to new record

Durable goods orders make surprise slip following strong spike; initial jobless claims fall to below 500,000 for the first time in one year

New home sales for October climb more than expected

Weak
investment banks and brokerages; diversified financial services; health care facilities; specialty consumer services; leisure products

[BRIEFING.COM] A new 52-week low for the Dollar Index and a generally pleasing batch of economic data helped stocks make their way higher. However, buyers lacked the potency to push through resistance near 2009 highs as participation lacked ahead of the Thanksgiving holiday.

Renewed pressure against the U.S. dollar sent the Dollar Index to a 1.1% loss, its worst single-session percentage drop in nearly four months. The drop also put the Dollar Index at a fresh 12-month low, but gave a broad lift to the equity market.

Participants were also generally pleased by the latest dose of data, which showed that personal income for October increased 0.2% and personal spending for October increased 0.7%. Respective increases of 0.1% and 0.7% had been widely expected. Core personal consumption expenditures (PCE) for October made a month-over-month increase of 0.2%, which exceeded the 0.1% increase that had been forecast.

Initial jobless claims for the week ending November 21 fell more than expected to 466,000, which marks the first time in one year that initial claims fell below 500,000. Meanwhile, continuing claims fell more than expected to 5.42 million, which marks a multimonth low. However, the decline in continuing claims still stems mostly from the expiration of unemployment benefits.

New home sales spiked a surprisingly strong 6.2% in October to an annualized rate of 430,000. The consensus had called for a mere 0.4% increase.

The only disappointing piece of data came from the latest durable goods orders report, which showed that orders fell 0.6% in October. The consensus had called for a 0.5% increase. Orders less transportation fell 1.3%, but had been expected to increase 0.7%. The considerable misses were countered by news that orders and orders less transportation for the previous month were revised higher to reflect an increase of 2.0% and 1.8%, respectively. That's double what had initially been reported.

Amid the largely positive dose of data and the dollar's dramatic drop, materials stocks made the strongest gains. The sector settled 1.5% higher.

Gold was a primary source of support for the materials sector. The yellow metal finished 1.7% higher at $1185.50 per ounce after setting a new record high near $1190 per ounce.

Oil prices also benefited from dollar weakness. Crude prices had started the session in negative territory, but rebounded to finish with a 2.6% gain at $77.96 per barrel. A slightly smaller-than-expected inventory build of 1.02 million barrels helped the move, but enthusiasm for that figure was initially mitigated by a larger-than-expected build of 1.0 million barrels of gasoline.

Financials made up the only sector in the S&P 500 that failed to make a gain. The sector lost 0.2% as participants continued to push against shares of diversified financial services players, which lost 0.9% as a group.

Despite broad-based gains, the S&P 500 was unable to push through resistance near 1113, which marks its 2009 high. Stocks were still able to close near session highs, though their gains were modest.

There wasn't much behind this session's move, however. Trading volume didn't even break 800 million shares on the NYSE. That's the lowest level in three months, but it shouldn't come as much of a surprise since U.S. markets are closed tomorrow in observance of Thanksgiving.

Treasuries had a solid session as the benchmark 10-year Note turned a loss of nearly 10 ticks into a gain of roughly 10 ticks. That put the yield on the Note down to 3.26%, which is its lowest level in one month. The rebound was helped by strong results from an auction of 7-year Treasuries. The auction produced a yield of 2.84% and attracted a bid-to-cover ratio of 2.76. That is above the previous auction's bid-to-cover ratio and that of recent averages.

[BRIEFING.COM] The market is trading with broad, but modest gains on low volume. Financials, currently down 0.2%, are the only sector in the red.

Commodities saw strong gains this session as the dollar index was cut to fresh 15 month lows.

Energy commodities saw a 4.1% gain, collectively. Natural gas futures took off following mixed crude oil data. The January natural gas futures extended momentum following a slightly lower-than-expected build in inventories. They finished up 8.4% at $5.16 per MMBtu. The January crude oil contract popped off the flat line following its inventory data. They rose for the rest of the session and closed up 2.6% at $77.96 per barrel.

Precious metals rose 2.0%, collectively. Weakness in the dollar and continued bullish sentiment surrounding bullion led to gold hitting yet another new all-time high this session. They closed up 1.7% at $1185.50 per ounce. The futures continue to set new all-time highs, flirting with the $1190.00 per ounce level in the electronic trade. Gold futures are now up about 15% in less than one month. Silver futures also closed 1.7% higher this session. They are now up over 45% since mid-July after closing at $18.77 per ounce.

On a related note, the Baltic Dry Index moved lower for the fourth consecutive session. It lost 2.4% in its latest outing. A key question is whether the recent downturns mark the start of a true correction, or if it is merely profit taking following 16 straight advances for the DBI.

[BRIEFING.COM] A recent run by stocks took the S&P 500 to a fresh session high. However, the broad market index continues to face resistance at around 1113, which marks its 2009 high.

Volume has been almost anemic this session. Thus far, little more than 500,000 shares have exchanged hands on the NYSE. At the current pace, total trading volume will come up short of 1 billion, which hasn't been breached since last week. The light volume isn't a surprise, though; many participants have stepped away from action to prepare for tomorrow's observance of Thanksgiving.

[BRIEFING.COM] Pressure has picked up against the dollar so that the Dollar Index is down to a new 52-week low, where it trades with a near 1.1% loss. The downturn has helped to move stocks another leg higher, though their gains remain modest.

Despite broad gains, financials continue to lag. The sector is down 0.3% and is still the only one to trade with a loss. Weakness in the sector stems primarily from banks and diversified financial services outfits. However, select insurers are looking strong; as such, shares of Aflac (AFL 45.42, +0.90) are up a solid 2.0%

[BRIEFING.COM] After pulling back midday and entering into a sideways drift, stocks are gradually making their way upwards once again. They are off of session highs and gains remain modest, though.

Trading volume remains moderate, as expected. With just a couple of hours left before participants take off for the Thanksgiving holiday, fewer than 500 million shares have traded hands.

Oil prices have managed to extend their rebound to a 1.9% gain. The commodity was last quoted at $77.50 per barrel. Collective strength among commodities has driven the CRB Commodity Index to a 2.0% gain, which is the second-best single-session percentage advance this month -- the CRB surged 2.8% in a single session just last week.

[BRIEFING.COM] Treasuries have garnered support in the wake of a $32 billion auction of 7-year Treasuries. The auction produced a yield of 2.84%, which is slightly below expectations, but attracted a bid-to-cover ratio of 2.76, which is above both the previous auction's bid-to-cover and recent averages. Ahead of the results the benchmark 10-year Note had been down roughly 10 ticks, but it is now in positive territory with a gain of just 1/32. That has put its yield back below 3.30%.

Meanwhile, stocks have entered a steady sideways crawl. They continue to trade with modest gains as a result.

[BRIEFING.COM] Action has been choppy this session, but stocks have made their way to modest gains with help from a weaker dollar and a generally pleasing lot of economic reports.

Renewed pressure against the greenback has sent the Dollar Index to a fresh 52-week low. The dollar is currently off by 0.8% against a basket of major foreign currencies.

While the dollar has provided a boon to the broader market, materials stocks have benefited the most. The sector is currently up 1.2%.

Gold has been a primary driver behind the sector's advance. With the dollar down, participants have chased the yellow metal to a new record of $1186.80 per ounce. It is currently just below that market with a 1.7% gain. 

Generally upbeat economic data has helped to keep participants in a positive mood this session. The latest dose of data indicated that both personal income and personal spending for October were up more than expected.

At 466,000, the latest initial jobless claims tally was less than expected and below 500,000 for the first time in one year. Continuing claims fell more than expected to a multimonth low of 5.42 million.

News of a stronger-than-expected increase in new home sales for October was also met with a positive response. Shares of homebuilders (XHB 14.73, +0.15) spiked on the announcement and continue to outperform the broader market.

There was one disappointing piece to the day's economic data, however. Durable goods orders for October made a surprise decline, but that was partly pardoned due to a sharp, upward revision to the orders for the previous month.

Earnings have played a secondary role this session. Deere (DE 53.77, +1.48) announced a positive earnings surprise, but disappointed investors with a tepid profit forecast. An encouraging conference call has helped its shares rebound from morning weakness, though.

Just two days ahead of "Black Friday," J Crew Group (JCG 43.97, +3.12) posted positive earnings of its own and issued an in-line outlook. Its shares are providing leadership to those of other retailers, which are up 1.1% as a group.

Financials stand have been steady laggards in late morning and early afternoon trade. The sector is currently down 0.3% as participants continue to pressure diversified financial services stocks, which are down XX% this session and down XX% over the past two days.

Results from an auction of 7-year Treasuries (1:00 PM ET) are due imminently. The benchmark 10-year Note is down nearly 10 ticks ahead of the announcement.

[BRIEFING.COM] The Dow and S&P 500 have recently came within just a few points of their 2009 highs, but they have since surrendered a chunk of their gains. Still intact is this session's positive bias, though. That has helped nine of the 10 major sectors sport gains.

Financials remain the primary laggards. The sector is down 0.3%. On the other hand, materials stocks are faring the best and are now up 1.2%.

[BRIEFING.COM] Materials stocks have made their way to a 1.4% gain as the Dollar Index (-0.8%) eases back toward its morning lows. Gold remains a primary leader among materials issues; prices for the yellow metal registered a new record high of $1185.90 per ounce in recent action. It is currently just shy of that high.

Energy stocks have made their way up from an early loss. The sector is now up 0.6% as oil prices bounce to a 1.2% to $76.90 per barrel. Natural gas prices have just spiked to fresh session highs of $5.09 per contract, up some 6.5%, following a weekly inventory report that showed a smaller-than-expected build.

[BRIEFING.COM] The stock market has chopped its way to a fresh session high. Gains are still moderate, though.

Financials stand out as laggards as they make up the only major sector to trade with a loss. The sector is currently down 0.1% after being up 0.4% in the early going. Its weakness stems primarily from losses among investment banks and brokerages (-1.0%) and ongoing pressure against diversified financial services stocks (-0.7%), which already fell 1.5% in the previous session.

[BRIEFING.COM] Action has been choppy this morning, but the major indices have managed to make their way to a modest gain. Materials stocks, now up 1.0%, continue to make up the best performing sector.

Meanwhile, industrials (+0.3%) are gaining momentum as shares of Deere (DE 53.77, +1.48) shake free from early weakness to sport a solid gain. Its rebound has lent strength to Caterpillar (CAT 58.85, +0.84), which had also lagged in the early going.

Initial weakness in the pair stemmed from Deere's latest quarterly report, which featured better-than-expected earnings, but also included a tepid profit forecast. However, the two stocks have since gained ground as Deere conducts its conference call. During the call the company stated that the pace of its retail activity has increased. However, it also stated that an approximate 10% decline in sales of large agricultural products in 2010 will have a negative impact on margins.

[BRIEFING.COM] Oil prices have moved into positive territory in the wake of the latest inventory report, which showed a build of 1.02 million barrels of crude for the week ending November 20. A build of 1.5 million barrels had been expected. Gasoline inventories for the same week had a build of 1 million barrels, which is more bearish than the build of 300,000 barrels that analysts had forecast. Oil was last quoted 0.1% higher at $76.10 per barrel.

Natural gas prices are up a sharp 3.9% to $4.95 per contract. Weekly inventory data for natural gas is due at 12:00 PM ET.

Precious metals are garnering particularly strong support. Gold prices made their way to new record highs of $1183.20 per ounce, but were last quoted at $1180.40 per ounce, up 1.3%.

Meanwhile, silver was last quoted at $18.65 per ounce, up 1.0%.

[BRIEFING.COM] Stocks have spiked to morning highs in the wake of new home sales figures for October. According to the data, sales increased 6.2% month-over-month to an annualized rate of 430,000 units. The consensus had called for a 0.4% increase to an annual rate of 404,000 units.

Early movers: Trading up -- GGR +19.7%, TBH +14.3%, INCY +9.8%, DRAD +9.4%, HEV +8.3%, JCG +7.1%; Trading down -- DRAM -15.6%, CONN -13.3%, SQNM -11.3%, SAY -10.9%, CWTR -9.5%

[BRIEFING.COM] This morning's positive bias faded into the open. That has left stocks to trade in mixed fashion in the early going.

Materials stocks are up just 0.3% as a group, but that's the best gain of any major sector. Its strength stems from gains among diversified metals and miners (+0.4%) and gold stocks (+1.3%). Gold prices made their way to new record highs of $1183.20 per ounce in recent trade. The yellow metal is currently at $1179.70 per ounce, up 1.2%.

Conversely, oil prices are under pressure ahead of the latest weekly inventory report (10:30 AM ET). Crude contracts were last quoted at $75.85 per barrel, down 0.3%. That has weighed on the energy sector so that it trades with a 0.5% loss, worse than any other major sector.

[BRIEFING.COM] There were plenty of trading catalysts this session, but participants were generally subdued and left stocks to trade with moderate losses in light volume ahead of the Thanksgiving holiday.

The stock market spent virtually the entire session in negative territory after stocks had logged solid gains in the previous session. Unlike the previous session, though, the dollar bounced between moderate gains and losses before it finished flat. Overseas markets also offered little support as they were hampered with weakness; the Shanghai Composite closed 3.5% lower due, in part, to concern for a lack of market-supportive measures from the country's officials.

Upon a second look, U.S. GDP was determined to have expanded at a 2.8% rate in the third quarter. That was in step with expectations, but it marked a considerable downward revision to the 3.5% increase that was posted as part of the advance GDP estimate.

Despite expectations for the downward revision, the Fed raised its GDP target for 2009 to the range -0.4% to -0.1% from the range -1.5% to -1.0%, according to the minutes from the November 4 FOMC meeting.

Though there is no empirically proven corollary between consumer confidence and spending, participants showed a short-lived, positive response to news that the November Consumer Confidence Index improved to a better-than-expected reading of 49.5. Retailers showed some strength early, but settled the session flat.

However, American Eagle Outfitters (AEO 15.01, +0.47) was a strong performer after it posted third quarter adjusted earnings that met expectations. Discount retailer Dollar Tree (DLTR 51.33, +2.23) brought in better-than-expected earnings and issued in-line guidance.

The biggest earnings announcement came from Dow component Hewlett-Packard (HPQ 50.19, -0.83), however. The company posted in-line earnings that reflected its preannouncement and affirmed an in-line outlook, which it had recently raised. Still, the lack of positive surprises in the report left it to lag for the entire session.

Financials proved to be the biggest drag on trade, though. The sector fell 0.8%. Bank stocks had been under pressure in the early going after Financial Times reported that the Federal Reserve has asked nine of the nation's largest banks to outline how they intend to repay TARP. Though regional banks (-0.3%) and diversified banks (-0.4%) were able to limit their losses, diversified financial services institutions (-1.5%) suffered. Even Bank of America (BAC 16.10, -0.19) couldn't be helped by news that analysts at Fitch placed the lender's Individual Rating on Rating Watch Positive.

At the other end of the performance scale was telecom. The sector finished 1.0% higher, but its lack of weight in the broader market kept it from providing any real leadership. Nonetheless, its gains extended its 2.6% advance in the previous session.

Health care was also a solid performer. The sector closed with a 0.8% gain. Dow component Merck (MRK 36.22, -0.20) failed to participate in the advance, but announced to investors a new $3 billion share repurchase program.

Treasuries found support after a directionless start. In turn, the benchmark 10-year Note advanced 12 ticks, which lowered its yield to 3.30%. The advance followed results from an auction of 5-year Treasuries. The auction fetched a bid-to-cover ratio of 2.81, which is the highest bid-to-cover of the year for the maturity.

Trading volume on the NYSE failed to eclipse 1.0 billion shares for the second straight session. The low level of participation is expected to continue through this week, due to the observance of Thanksgiving on Thursday.