Thursday Session Another Fiscal Cliff Victim
Wall Street finished lower in Thursday trading, snapping a six session winning streak for the broader market. What seems to be a continued major impasse, the balance of spending cuts and tax increases in fiscal cliff negotiations hit market sentiment. While the market has priced in a deal by the end of the year, of any sort, a New Year deal is looking more likely. It was a data heavy session, with three key data points released in premarket trading. The Dow Jones Industrial Average fell 74.73 points, or 0.6%, to 13,170.72. The S&P 500 index declined 9.03 points, or 0.6%, to 1,419.45, with health-care and energy leading sector losses. The Nasdaq Composite dropped 21.65 points, or 0.7%, to end at 2,992.16.
Following Wednesday’s 1+% advance, oil for January delivery fell 88 cents, or 1%, to settle at $85.89 a barrel on the New York Mercantile Exchange. Gold settled at $1,696.80 an ounce, down $21.10, or 1.2%. Not to be outdone, silver tumbled $1.43, or 4.2%, to end at $32.36 an ounce. That was its lowest settlement in more than a month.
First on the labor front, weekly jobless claims posted a 29,000 decline to 343,000 for the December 8 week. The 343,000 level is the lowest since early October, and well below the 370,000 consensus estimate. This is the four straight weeks of major declines that total 108,000.
On the inflation front, the overall PPI dropped 0.8 percent after falling 0.2 percent in October. The November number posted lower than the consensus forecast for a 0.5 percent decline. The core rate, which excludes both food and energy, rebounded a modest 0.1 percent, following a decline of 0.2 percent in October. The median market forecast was for a 0.2 percent gain. For the overall PPI, the year-ago rate in November came in at 1.4 percent, compared to October at 2.3 percent. The core rate in November was 2.2 percent versus 2.1 percent month before.
Total retail sales in November rebounded 0.3 percent, following a 0.3 percent decline the prior month. Analysts projected a 0.6 percent jump for the latest month. The change month over month was a result of an increase in auto sales. Ex-autos, there was no change. Don’t be fooled, the report was held down by a drop in gasoline prices. Less autos and gas, sales spiked 0.7%.