BLBG: S&P 500 Little Changed on Data Amid Greek Deadlock
U.S. stocks were little changed, after a three-day gain in the Standard & Poor’s 500 Index, as investors watched economic data while European finance ministers failed to agree on a debt-reduction package for Greece.
Deere (DELL) & Co., the world’s largest agricultural equipment maker, fell 3.4 percent as earnings missed analysts’ estimates. Salesforce.com Inc. (CRM), the largest maker of online customer- management software, rose 6.9 percent after forecasting sales and profit that were in line with analysts’ projections.
The S&P 500 (SPX) fell less than 0.1 percent to 1,387.78 at 10:20 a.m. New York time. The Dow Jones Industrial Average added 21.30 points, or 0.2 percent, to 12,809.81. Trading in S&P 500 companies was 23 percent below the 30-day average at this time of day, according to data compiled by Bloomberg. The U.S. market will close for the Thanksgiving holiday tomorrow.
“It’s a combination of politics and meteorology,” said Philip Orlando, the New York-based chief equity strategist at Federated Investors Inc., which oversees about $364.1 billion. He spoke in a phone interview. “Jobless claims are not giving much of an indication because of Hurricane Sandy. Michigan confidence and leading indicators are important. Europe is an issue that at best will take years to resolve and the Middle East is a mess.”
Fewer Americans filed applications for unemployment benefits last week as damage to the labor market caused by superstorm Sandy began to subside. The index of U.S. leading economic indicators rose at a slower pace in October. The Thomson Reuters/University of Michigan final index of U.S. consumer sentiment for November rose to 82.7 from 82.6 at the end of last month. Economists projected 84.5 for the gauge.
Fresh Money
Europe’s finance ministers will regroup on Nov. 26 after talks broke up, with creditors led by Germany refusing to put up fresh money for Greece. An explosion on a bus in Tel Aviv left at least 10 people injured as U.S. Secretary of State Hillary Clinton held talks with Israeli and Palestinian leaders seeking an end to the weeklong conflict in Gaza.
“We’ve got some interesting pockets of strength in the economy that could prove to be brighter spots next year than a lot of people think, notwithstanding the fiscal cliff, which is the elephant in the room,” said Liz Ann Sonders, the New York- based chief investment strategist at Charles Schwab Corp., which has $1.9 trillion in client assets. “There’s a lot of choppiness. Europe is back in the crosshairs. The last thing we need right now is escalating tension in the Middle East.”
Fiscal Cliff
The S&P 500 rose 2.6 percent over the previous three days amid better-than-forecast housing data and as President Barack Obama expressed confidence on a budget agreement with Congress. Obama met with senior Democrats and Republicans on Nov. 16 for talks to avoid $607 billion of automatic tax increases and spending cuts that, if allowed to come into force, might push the country into a recession next year.
Deere fell 3.4 percent to $83.03. The company said farm- equipment sales in Europe will be unchanged or 5 percent lower in fiscal 2013 and Asia will be little changed due to “softer” economic conditions in India and China. That may undermine the company’s effort to expand the share of sales made outside the U.S. and Canada to 50 percent by 2018.
St Jude Medical Inc. (STJ) slid 8.2 percent to $32.78. The maker of heart rhythm devices was downgraded to market perform from outperform at Wells Fargo & Co.
Salesforce rose 6.9 percent to $155.99. Chief Executive Officer Marc Benioff is signing bigger enterprise agreements that give customers broad access to Salesforce’s software, following the company’s Dreamforce conference in September.
Gaining Traction
That’s helping to stave off competition from Oracle Corp. (ORCL), SAP AG and Microsoft Corp., which are buying companies that offer business-management tools over the Internet and gaining traction in an area Salesforce pioneered.
The S&P 500 will climb back to the level it was trading at before the Nov. 6 U.S. presidential election if it crosses a key resistance, according to Royal Bank of Scotland Group Plc.
The U.S. equity benchmark on Nov. 16 rebounded from 1,346, a two-thirds Fibonacci retracement level of the rally from June to September, said Dmytro Bondar, a technical markets strategist at RBS in London. While this signals a bullish reversal, the gauge must also breach the one-third retracement, or 1,395, for further gains, he said.
“A new trend was set after a major reversal,” Bondar said. “It clearly indicates that the index is set for recovery, confirmed by candlestick patterns. In the short term, it’s bullish.”
The S&P 500 may rise to as high as 1,427 in the next two weeks, he said. The measure last closed above that level on Nov. 6. The index gained less than 0.1 percent to 1,387.81 yesterday. The S&P 500 may trade in a range or fall after reaching 1,427, Bondar said. If it clears that level, however, it may advance to its September high of 1,474.
In technical analysis, investors and analysts study charts of trading patterns and prices to predict changes in a security, commodity, currency or index.
To contact the reporters on this story: Rita Nazareth in New York at rnazareth@bloomberg.net; Tom Stoukas in Athens at astoukas@bloomberg.net
To contact the editor responsible for this story: Lynn Thomasson at lthomasson@bloomberg.net
