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Last Update: 06-Jan-12 08:29 ET
Weekly Wrap for January 3, 2012
Although the stock market was able to come back from an early slide, its inability to push into positive territory left it to chop its way into the close for a lackluster finish.
The December payrolls report initially provided a lift to premarket sentiment. It featured a headline unemployment rate of 8.5%, which is down from the 8.6% in the prior month and less than the 8.7% that had been widely anticipated. Moreover, nonfarm payrolls climbed by 200,000, which exceeds the increase of 150,000 that had been expected. Private payrolls increased by 212,000 to exceed the consensus call for an increase of 170,000.
However, stocks were hit with selling pressure once the session opened. As was the case in the two previous sessions, stocks were able to stabilize and gradually work their way higher, but a lack of leadership prevented the broad market from overcoming resistance at the flat line.
Although the stock market was unable to close the week on a positive note, it displayed resilience in the face of a weaker euro, which fell about 0.6% to what is basically a new 16-month low of $1.27.
Recent market action may not have been all that exciting, but a strong gain on Tuesday helped the stock market book a weekly gain of 1.6%. For some prognosticators, that makes for a promising start to 2012, which many believe will still be driven by global financial and economic conditions, especially those in Europe. The Presidential election is also in the mix, as are corporate earnings. Earnings season gets its unofficial start early next week.
Trade this week began on Tuesday since domestic markets were closed on Monday in observance of New Year's Day. Stocks put together their best performance of the week by advancing about 1.6%, but the S&P 500 was unable to overcome resistance at its multi-month closing high of 1285.
Manufacturing data from China, India, a couple of corners of Europe provided encouragement to buyers. Even domestic manufacturing proved pleasing -- the December ISM Manufacturing Index improved to 53.9 from 52.7 in November so that it exceeded the reading of 53.4 that had been widely expected.
Construction spending for November increased by 1.2%, which bested the 0.5% increase that had been generally expected after a downwardly revised 0.2% decline during October.
Minutes from the most recent FOMC meeting proved unsurprising by stating only that domestic economic activity recently expanded moderately. Although the pace economic activity is expected to pick up, some committee members communicated that current and prospective conditions could warrant additional policy accommodation.
Trade on Wednesday had a flat finish as concerns about financial conditions in Spain and uncertainty over the financial flexibility of Hungary brought the negative themes of 2011 back into focus. Also in the mix were cautious comments from officials in China regarding the country's economic outlook.
On Thursday the Nasdaq made a nice gain, but the broad market mustered only a modest gain after working its way up from a marked loss in morning trade. A weaker euro and rising debt yields in Europe -- signs of the same old concerns about financial and economic conditions there -- dampened the mood of many traders, but the negativity was partly tempered by an ADP Employment Change that reported private payrolls increased by 325,000 during December. An increase of 180,000 had been generally expected.
Weekly initial jobless claims count declined by 15,000 week-over-week to 372,000, which is on par with the 375,000 initial claims that had been widely anticipated. The ISM Services Index for December did little to surprise by coming in at 52.6, which is only slightly less than the 53.0 that had been broadly forecasted. December same-store sales were also of little influence, due to their underwhelming results.
The December payrolls report initially provided a lift to premarket sentiment. It featured a headline unemployment rate of 8.5%, which is down from the 8.6% in the prior month and less than the 8.7% that had been widely anticipated. Moreover, nonfarm payrolls climbed by 200,000, which exceeds the increase of 150,000 that had been expected. Private payrolls increased by 212,000 to exceed the consensus call for an increase of 170,000.
However, stocks were hit with selling pressure once the session opened. As was the case in the two previous sessions, stocks were able to stabilize and gradually work their way higher, but a lack of leadership prevented the broad market from overcoming resistance at the flat line.
Although the stock market was unable to close the week on a positive note, it displayed resilience in the face of a weaker euro, which fell about 0.6% to what is basically a new 16-month low of $1.27.
Recent market action may not have been all that exciting, but a strong gain on Tuesday helped the stock market book a weekly gain of 1.6%. For some prognosticators, that makes for a promising start to 2012, which many believe will still be driven by global financial and economic conditions, especially those in Europe. The Presidential election is also in the mix, as are corporate earnings. Earnings season gets its unofficial start early next week.
Trade this week began on Tuesday since domestic markets were closed on Monday in observance of New Year's Day. Stocks put together their best performance of the week by advancing about 1.6%, but the S&P 500 was unable to overcome resistance at its multi-month closing high of 1285.
Manufacturing data from China, India, a couple of corners of Europe provided encouragement to buyers. Even domestic manufacturing proved pleasing -- the December ISM Manufacturing Index improved to 53.9 from 52.7 in November so that it exceeded the reading of 53.4 that had been widely expected.
Construction spending for November increased by 1.2%, which bested the 0.5% increase that had been generally expected after a downwardly revised 0.2% decline during October.
Minutes from the most recent FOMC meeting proved unsurprising by stating only that domestic economic activity recently expanded moderately. Although the pace economic activity is expected to pick up, some committee members communicated that current and prospective conditions could warrant additional policy accommodation.
Trade on Wednesday had a flat finish as concerns about financial conditions in Spain and uncertainty over the financial flexibility of Hungary brought the negative themes of 2011 back into focus. Also in the mix were cautious comments from officials in China regarding the country's economic outlook.
On Thursday the Nasdaq made a nice gain, but the broad market mustered only a modest gain after working its way up from a marked loss in morning trade. A weaker euro and rising debt yields in Europe -- signs of the same old concerns about financial and economic conditions there -- dampened the mood of many traders, but the negativity was partly tempered by an ADP Employment Change that reported private payrolls increased by 325,000 during December. An increase of 180,000 had been generally expected.
Weekly initial jobless claims count declined by 15,000 week-over-week to 372,000, which is on par with the 375,000 initial claims that had been widely anticipated. The ISM Services Index for December did little to surprise by coming in at 52.6, which is only slightly less than the 53.0 that had been broadly forecasted. December same-store sales were also of little influence, due to their underwhelming results.
| Index | Started Week | Ended Week | Change | % Change | YTD % |
| DJIA | 12217.56 | 12359.92 | 142.36 | 1.2 | 6.8 |
| Nasdaq | 2605.15 | 2674.22 | 69.07 | 2.7 | 0.8 |
| S&P 500 | 1257.60 | 1277.81 | 20.21 | 1.6 | 1.6 |
| Russell 2000 | 740.90 | 749.71 | 8.81 | 1.2 | -4.3 |
