Traders-Blog.com

Investors received mixed news on inflation in the data that was otherwise positive on the economy. Stocks closed lower, but a fall in crude-oil prices, stabilizing long-term interest rates and upbeat economic data helped the market to solid November gains.

Today, the Dow Jones Industrial Average ended down 82.29 points at 10,805.87, the Standard & Poor’s 500 Index fell 8 points to 1,249.48 and the Nasdaq Composite Index ended virtually unchanged, up 0.11 point at 2,232.82. For the month, the Dow Jones gained 3.5%, the S&P 500 gained 3.5% and the tech-rich index rose 5.3%.

The market breadth was nearly even on the New York Stock Exchange with the decliners gaining a 17 to 16 advantage over advancers in late-day on volume of 1.3 billion shares. On the Nasdaq, advancers topped decliners by 17 to 12 on volume of 1.5 billion shares.

The Beige Book account of current economic conditions stated that the U.S. economy continues to expand, but at remarkably different rates across the country. The pace of growth was generally described as slow in the East, gradual in the Midwest and solid west of the Mississippi. There are little overall trends except a robust factory sector and many reports of a cooling residential housing market. Retail sales were generally positive except for auto sales. The best news was perhaps that hiring activity has increased in many Fed districts. On inflation, the Beige Book said price reports were mixed, with consumer price pressures flat or up modestly but also noting talk of “persistent input price pressures” as businesses passed along higher energy prices. Therefore, the Beige Book survey, failed to move the markets much as it shed little new light on economic conditions.

Among stock movers, Yahoo closed up $0.14 to $40.33, despite brokerage UBS downgrading it to “neutral” from “buy”. Yahoo was downgraded by Legg Mason on Monday, and rival Google Inc. saw a bearish note from Merrill Lynch on Tuesday. Is this an indication of overvaluation of these stocks?

General Motors was the biggest percentage decliner on the benchmark index, down 4.8% at $21.90. Research in Motion closed down $3.87 or 5.8% to $61.05, after a judge refused to enforce a controversial $450 million patent settlement between the BlackBerry maker and patent holding company NTP Inc.

Shares of TiVo Inc. shares ended up 3.9% at $5.38. Shares of Novellus Systems Inc. rose 2.45% to $24.67 as investors appeared to focus on the chip-equipment maker’s upbeat order outlook rather than its decision to cut the top end of its fourth-quarter revenue forecast.

U.S. light crude oil for January delivery gained 82 cents to close at $57.32 a barrel on the New York Mercantile Exchange.

All the best,
Manuel Jesus-Backus
The Portfolio Crafter