Stocks Flutter Midday as Economic Data and Fiscal Cliff Keep Caution in Charge

Andrew Klips |

John Boehner RepublicanStocks are mixed midday on Wall Street as investors digest commentary for John Boehner, a better-than-expected November jobs report and faltering consumer sentiment.

As the trading week is within hours of ending, the Dow Jones Industrial Average is ahead by 42 points, putting it on pace for a 90-point (0.69%) rise for the week.  The broader S&P 500 is stagnating around even for Friday and on track for a flat week.  The Nasdaq is down by 17 points, adding to losses that have the tech-rich index to fall by 1.29% (38 points) for the week.

The Labor Department said Friday morning that the U.S. added 146,000 jobs during November and that the unemployment rate dropped to 7.7 percent from 7.9 percent, representing the lowest level in four years.  The report clearly outstripped economist projections of the unemployment rate holding firm and only 80,000 new jobs.  While the impact of Hurricane Sandy was no where near as expected on the labor market, the decrease in unemployment was still jaded by the fact that it was primarily the result of less people looking for work. Read more on the latest jobs report.

Also on the economic slate, the University of Michigan/Thomson Reuters consumer sentiment index dove from 82.7 in October to 74.5 in November, marking the largest drop in the index since March 2011.  Economists were expecting a far more tepid drop to only 82.0.  The gauge of how consumers feel about current economic conditions had risen the four months prior, but those gains were eliminated with the November tumble.

Apparently the posturing in Washington over the so-called “fiscal cliff” is taking its toll on how Americans view the economy.

Republican House Speaker John Boehner again was behind the podium informing the world (and the markets) that no progress has been made yet on Capitol Hill to avert the fiscal cliff, an automatic series of spending cuts and tax increases set to go off at the first of January.  The lack of negotiation headway led to Boehner accusing President Obama of “slowing walking” the U.S. over the cliff.

Stocks in action included Apple (AAPL) falling more than 2% to continue a pace that could see the nation’s biggest company lose 9% more this week for its worst weekly performance since July 2010.  Shares now sit about 25 percent from $701 highs hit in September.  Reports Thursday suggested that the $1 billion award in its patent suit against Samsung could be trimmed.

Netflix (NFLX) is all over the news thanks to an SEC filing that disclosed the company receiving a Wells notice from the SEC related to Facebook posts earlier this year by CEO Reed Hastings that could be in violation of disclosure regulations.  Netflix and Hastings are facing civil penalties for the alleged violation in which the Netflix chief boasted about more than one billion hours of monthly viewing in June for the first time in the DVD rental and video streaming company’s history.  Shares have conceded some early-day gains, but are still ahead by 0.6 percent at $86.70 and tracking 6% higher for the week.

Shares of Big Lots (BIG) are the worst performer in the S&P 500 upon reports of CEO Steven Fishman selling $10 million worth of stock ahead of a quarterly report showing sales had slowed.  The move may be subject to investigation by the SEC, although the company contests that nothing was illegal about the sales and no regulators have contacted the close-out retailer.  Shares are down 6 percent on the day.

Gold prices have picked-up steam to advance $25.40 per ounce to $1,725.70.

Crude is off by 12 cents per barrel at $86.14.

The benchmark 10-year US bond is up 2.66 basis points at 1.62%.

The ICE US Dollar Index, which measures the greenback against a series of major foreign currencies, has climbed 0.62% to 80.26.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

Companies

Symbol Name Price Change % Volume
BIG Big Lots Inc. 54.88 -0.62 -1.12 859,266
AAPL Apple Inc. 113.86 1.74 1.55 33,984,823
JKHY Jack Henry & Associates Inc. 89.48 0.05 0.06 315,608
NFLX Netflix Inc. 122.88 -0.36 -0.29 4,688,035

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