Huge Red to Green Move Wednesday on the Street!
Wall Street recovered late morning from a slow start to the session to finish on the positive side. Equities lacked direction and volatility remained high as fiscal cliff negotiations continue. It was a great red to green move, with the blue chips going from down triple digits to up triple digits by the close. The Dow Jones Industrial Average added 106.98 points, or 0.8%, to 12,985.11. The S&P 500 index rose 10.99 points, or 0.8%, to 1,409.93, lifting the S&P 500 back into the green for the week. The Nasdaq Composite climbed 23.99 points, or 0.8%, to 2,991.78.
Crude extended losses to a third session as demand concerns outweighed a rise in equities. Crude-oil futures for January delivery fell 69 cents, or 0.8%, to settle at $86.49 a barrel on the New York Mercantile Exchange. Gold also had a rough go of it, dropped $25.80, or 1.5%, to settle at $1,716.50 an ounce.
The good news and optimism out of the housing sector took a hit with the release of October new home sales. . New home sales came in at a 368,000 annual rate which is a very steep 19,000 below the Bloomberg consensus. Not only did we see disappointment on the month, but September was revised 20,000 lower to 369,000, while August saw a 2,000 downward revision to 366,000. Another unfavorable sign in the report is a second straight month of price weakness, down 4.2 percent for the median to $237,700. The year-on-year rate, which had been in the positive double digits, is now plus 5.7 percent. Supply remains low in the new home market at 4.8 months at the current sales rate.
The Beige Book of economic conditions spanning the 12 Federal Reserve districts pointed growth “at a measured pace” versus the prior Beige Book language that the economy “generally expanded modestly.” Relative strength varied by District with seven Districts posting modest growth, two were stronger, and three were either slow or weaker. Employment rose modestly, while Hurricane Sandy held the Northeast back.