Member access

4-Traders Homepage  >  News

News

Latest NewsCompaniesMarketsEconomy & ForexCommoditiesHot NewsMost Read NewsRecomm.Business LeadersVideosCalendar 

MARKET SNAPSHOT: U.S. Stocks Rise As Cliff Watch Continues

12/06/2012 | 06:20pm US/Eastern

By Kate Gibson, MarketWatch

NEW YORK (MarketWatch) -- U.S. stocks climbed modestly Thursday, with an optimistic forecast from Broadcom Corp. bolstering technology shares as investors watched fiscal-cliff negotiations.

"It surprises me that the market has held up reasonably well in the face of the posturing. Maybe more of this has been priced in than we thought," John De Clue, regional investment director at U.S. Bank Wealth Management, said of the down-to-the-wire political back-and-forth over the budget.

"I think this will get resolved, if not by end of the year, by early 2013," Gus Faucher, senior economist at PNC Financial Services Group, said of the automatic steep spending cuts and tax increases slated to begin in January.

The standoff appears to be weighing on business confidence, but "on the other hand consumers don't appear terribly concerned," said Faucher of recent data illustrating consumer sentiment at multiyear highs.

"It's the tale of two economies, businesses have no choice but to approach planning for next year in a cautionary mode," given the uncertain tax and regulatory environment, De Clue said.

But consumers are feeling more confident about spending, a trend De Clue ties to "so much of our perception of wealth is tied to housing, and we keep hearing evidence of a housing market that is recovering much better than the Street expected."

Up 0.4% for the week so far, the Dow Jones Industrial Average (DJI) added 39.55 points, or 0.3%, at 13,074.04, with computer-chip maker Intel Corp. (>> Intel Corporation) leading gains among the 30 components.

Intel CEO Paul Otellini, who is retiring in May, on Wednesday said his successor would likely be chosen from inside the company.

The S&P 500 index (SPX) rose 4.66 points, or 0.3%, to 1,413.94, with technology the best performing and utilities the worst of the 10 major industry groups.

Broadcom's (>> Broadcom Corporation) shares rose 3.2%, a day after the chip manufacturer projected fourth-quarter revenue at the upper end of its target range.

Akamai Technologies Inc. (>> Akamai Technologies, Inc.) rallied 10% on news that it would jointly sell services with AT&T Inc. (T).

Shares of Safeway Inc. (>> Safeway Inc.) jumped 2.4% after the food-and-drug retailer joined other companies in accelerating its quarterly cash dividend to December to bypass a potential hike in dividend taxes if the fiscal-cliff issue remains in play at the end of the year.

Halting a four-session losing streak, the Nasdaq Composite (RIXF) climbed 15.57 points, or 0.5%, to 2,989.27.

Apple Inc. (>> Apple Inc.) rose 1.6%, a day after shares of the consumer-technology company took their biggest single-day percentage hit since December 2008.

For every seven shares declining eight gained on the New York Stock Exchange, where 617 million shares traded.

Composite volume neared 3.2 billion.

Oil prices fell to a one-week low after the European Central Bank reduced its growth expectations. Crude for January delivery dropped $1.62, or 1.8%, to $86.26 a barrel in New York. ECB President Mario Draghi told a news conference "weak economic activity is expected to continue into next year."

Treasury prices gained, with the benchmark 10-year note's yield falling to 1.587%.

The fiscal-cliff drama does not seem to have investors particularly shaken, at least by one measure of Wall Street uncertainty. The CBOE Market Volatility Index (VIX) fell 3.9% on Thursday to 16.46. The VIX closed at 26.66 -- its highest finish this year -- on June 1, after an anemic monthly jobs report came in under the gloomiest of expectations, rattling investors. The index has not finished above 20 since late July.

"The cliff is so dominating everything now, that nothing much is going to move the market, absent maybe Greece deciding to leave the euro zone, which we do not think will happen," said De Clue at U.S. Bank.

Non-cliff notes

The Labor Department reported jobless claims fell by 25,000 to 370,000 last week to their lowest level in a month.

The weekly data is positive in that it shows the negative impact of the recent superstorm on the labor market to be a temporary one, said PNC's Faucher. "It's in line with what markets were expecting," he said of the market's muted reaction.

"It's certainly good news. After they rose about 90,000 in the wake of Hurricane Sandy, they are now back to where they were before, so it looks like there won't be any permanent impact from the storm," Faucher said.

The pattern is the same as during 2005's Hurricane Katrina, which was followed by a big spike in claims shortly after the storm hit, with the count of those filing for jobless benefits returning to pre-Katrina levels weeks later, Faucher said.

The weekly data come ahead of Friday's monthly nonfarm payrolls report, with the unemployment rate likely to hold at 7.9% for November.

On Wednesday, stocks mostly advanced, with the Dow Jones Industrial Average (DJI) rising 82 points, after Bloomberg News reported of Republican defections to a bipartisan effort on Capitol Hill to break the budget impasse.

Subscribe to WSJ: http://online.wsj.com?mod=djnwires

React to this article
Latest news
Date Title
10:26a WEIGHT WATCHERS : Super Bowl 2015 ads: Add Weight Watchers to Wieden+Kennedy's lineup
10:25aDJApple, Google and Amazon Reach 'Freemium' Agreement
10:25a MIDDLEBURG FINANCIAL : posts 4Q profit
10:25a FIRST OF LONG ISLAND : posts 4Q profit
10:24a Best to hike U.S. rates sooner, go slower -Fed's Bullard
10:24a SAIA : Results of Operations and Financial Condition, Financial Statements and Exhibits (form 8-K)
10:24a IMF MONETARY FUND : Press Release: IMF Executive Board Concludes First Post-Program Monitoring with Portugal
10:24a OCC OFFICE OF COMPTROLLER OF CURRENCY : Supports Earned Income Tax Credit Awareness Day
10:24a MANULIFE FINANCIAL : Take the first step to secure your family's future with Manulife's Bundle of Joy
10:23a BEST OF BEST : Choate Only Contractor to Receive Two ENR National Best of the Best Project Awards
Latest news
Advertisement
Hot News 
BERKELEY MINERAL RESOURCES : Obsidian IR
RAMBLER METALS & MINING : Implements Revised Plan at the Ming Copper-Gold Mine
GREEN DOT : reports 4Q loss
HAVELOCK EUROPA : CEO Resigns As Reduced Results To Meet Expectations
NOSTRUM OIL & GAS : Fourth Quarter and Full Year 2014 Operational Update
Most Read News
01:42a ROYAL DUTCH SHELL A : *traders: hsbc cuts shell a to 'neutral' ('ow') - price target 2200 pence
01/29DJON MCDONALD'S MENU : CEO With A Fresh View
01/29 Wall Street finishes higher in afternoon rally as oil gains
01/29DJINTERCEPT PHARMACEUTICALS : Says FDA Grants Breakthrough Status
01/29DJCurrency Tumult Stokes Big Bets--Update
Most recommended articles
10:25aDJApple, Google and Amazon Reach 'Freemium' Agreement
10:24a Best to hike U.S. rates sooner, go slower -Fed's Bullard
10:23a Shake Shack sizzles in market debut
10:19aDJIndia Sells 10% Stake of Coal India for $3.6 Billion
10:18a BMW fixes security flaw in its in-car software
Dynamic quotes  
ON
| OFF