Stocks Bounce Back & Finish Even Ahead of Data, Auctions
January 11, 2012
Stocks finished mixed but nearly unchanged on Wednesday following a somewhat uneventful day of trading. Major indices started the day reeling following comments from Fitch saying that the ECB needs to do more in order to avoid a “cataclysmic” euro collapse, Merkel admitting that leveraging the EFSF is proving difficult, and some speculation from the EU that Hungary’s deficit reduction efforts are not sustainable.
Stocks spent the majority of the morning in choppy trading until sustaining an early afternoon rally ahead of the Fed Beige Book report. The report did little to surprise, saying that economic expansion was continuing a moderate, modest pace. The report did little to establish meaningful direction for the day. Traders put up a modest rally towards the end of the day, and stocks finished just off of their intraday highs. However, those highs were right near yesterday’s close, and most indices finished with little to no change.
Wednesday seemed like another day of “stalling” ahead of some more significant happenings later this week. Tonight, we get a batch of December macro data from China, which we’ve had our eye on lately. Tomorrow there is an ECB meeting, Eurozone peripheral sovereign debt auctions (Italy and Spain being the big ones), and some U.S. economic data, including retail sales and initial jobless claims. Beyond this week, Q4 earnings really kick into high gear next week.
It is also worth noting that while we did open lower on European news, the decoupling theme that has been growing over the past couple weeks persisted today, as stocks were able to rally past the negative sentiment and finish back where they opened. While the decoupling effect is slight, it is a developing theme that should be monitored, especially with big euro headlines later this week.
Close Recap: S&P 500 +0.03%, NASDAQ +0.31%, DJIA -0.10%, Midcaps +0.26%.
Have a pleasant evening.
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