Traders-Blog.com

The Cyber Monday saw the stocks tumble as investors bailed out of tech, energy and a variety of other stocks after a five-week market rally. .The S&P 500 and the Nasdaq Composite indices snapped a seven-session run of gains as some investors chose to lock in profits after a six-week rally.

Today, the Dow Jones industrial average closed down 40.90 or 0.4% to 10,890.72, the Standard & Poor’s 500 ended down 10.79 or 0.8% to 1,257.46, and the Nasdaq composite finished down 22.88 or 1% to 2,239.37. Both the S&P and the Nasdaq posted their biggest one-day drop in a month. The declines today have followed a more than five-week advance that had pushed the S&P 500 and Nasdaq to four-and-a-half-year highs and the Dow 30 to just below four-and-a-half-year highs.

The market breadth was negative and volume was moderate. On the New York Stock Exchange, losers beat winners two to one on volume of 1.49 billion shares. On the Nasdaq, decliners topped advancers by seven to three on volume of 1.58 billion shares.

About Black Friday, the National Retail Federation has reported a 22% year-over-year increase in sales, with electronics goods a popular purchase. Credit giant Visa also stated that spending on branded debit and credit cards for Friday and Saturday jumped 15% over year-ago levels. However, ShopperTrak said sales on the Friday slipped 0.9%.

Tomorrow, a bevy of economic reports, including reads on durable goods orders and new home sales may make a difference to the market perspective. However, the biggest potential market mover would be the November consumer confidence report from the Conference Board.

Losers today included Exxon Mobil that closed down $1.37 to $58.74, Amerada Hess finished down $8.52 to $122.71, and the Amex Oil index fell 3.7%. The Dow Jones Home Construction index too closed down $34.97 or 3.6% to $926.96. The biggest loser was Merck that closed down $1.42 or 4.6% to $29.56, after announcing that as part of a cost-saving plan, it is cutting 11% of its workforce (over 7000 jobs) and closing or selling five of its 31 plants.

Amongst gainers, McDonald’s gained $0.49 to $33.95, General Motors closed up $0.36 or 2% to $23.22, after auto-parts maker Delphi said it was making progress in its labor negotiations with its auto workers union. Shares in SBC Communications closed up $0.31 to $25.08.

Canadian oil and gas producers Harvest Energy Trust and Viking Energy Royalty agreed to merge, creating a company with an initial enterprise value exceeding $4 billion. Harvest Energy shares were off $1.04 at $30.18. Newmont Mining said it might launch a rival bid for Placer Dome. Newmont’s stock rose 62 cents to $47.68 while Placer Dome climbed 8 cents to $22.03. American Pharmaceutical Partners said it reached agreement to buy its largest shareholder, closely held American BioScience Inc., in a multibillion dollar deal. The stock tumbled as much as 17.6% to $39.25.

U.S. light crude oil for January delivery fell $1.35 to settle at $57.36 a barrel on the New York Mercantile Exchange.

All the best,
Manuel Jesus-Backus
The Portfolio Crafter