Stocks rose Friday but did not make up for what turned out to be its worst week since June, investors attention turned from presidential election to worries about the “Fiscal Cliff” and continuing EU financial crisis.

The S&P 500 finished Friday’s session + 0.17%, but it fell 2.4% on the week, its worst since early June. On the week, the DJIA fell 2.1% and the NAS declined 2.6%.

According to Thomson Reuters data through Friday, 449 companies in the S&P 500 reported earnings, 63.3% have topped analysts’ estimates, above the 62% average since Y 1994, but below the 67% beat rate over the past 4 Quarters. Though revenue results are disappointing, with just 38.2% of companies topping expectations, below the 62% average since Y 2002, and the 55% beat rate over the past 4 Quarters.

Industry Watch

Strong: Telecoms, Technology, Financials

Weak: Utilities, Consumer Discretionary

DJIA 12815.39+4.07 (0.03%) NAS 2904.87+9.29 (0.32%) S&P 5001379.85+2.34 (0.17%) 10-yr T-NoteUNCH 1.617

NYSE Adv 1449 Dec 1580 Vol 740.1-M NAS Adv 1236 Dec 1209 Vol 1.75-B

An S&P information technology sector index .GSPT rose 0.6%
Shares of Apple NASDAQ:AAPL 547.06, +9.31 rebounded from recent weakness, and the stock finished higher by 1.7%.

Dow Jones Live Trading News Macro Charts

Kayak Software NASDAQ:KYAK 39.67, +8.63 rose 27.8% after agreeing to be acquired by Priceline NASDAQ:PCLN 625.87, -2.00. Per the agreement, PCLN will pay 40.00 per share of KYAK, representing a 28.9% premium to Kayak’s closing price Thursday.

Groupon Inc’s NASDAQ:GRPN shares sank 29.6% to 2.76 a day after the daily deal company’s results fell short of Wall Street’s expectations.

International Game Technology NYSE: IGT gained 5.2% to 13.50 after the slot machine company reported better-than-expected Q-4 earnings.

Lions Gate Entertainment Corp NYSE:LGF rose 14.3% to 16.68 after reporting earnings of $75.5-M, an above-expectation figure that was boosted by the studio’s blockbuster movie, “The Hunger Games.”
Shares of Walt Disney Co NYSE:DIS fell 6% to 47.06, dragging on the DJIA, after the company reported results late Thursday. The company said coming results will be under pressure due to declining home video sales and rising costs.

The stock of J.C. Penney NYSE:JCP slid 4.8% to 20.64 and ranked as the S&P 500′s biggest decliner after the retailer reported a sharper-than-expected decline in Quarterly sales at stores open at least a year.

The market posted early gains on Friday after stronger-than-expected figures on US consumer sentiment.

But investors’ cooled after hearing from the House Speaker and the President about the Fiscal Cliff.

Rep. Boehner, a Republican, stated his opposition to any tax hikes on the wealthy late Friday morning. And Obama responded in the early afternoon by saying there was no way around tax increases, but that he would remain open to any new ideas that congressional leaders might have.

The Fiscal Cliff is a combination of government spending cuts and tax increases set to go into effect early next year unless Congress acts to change the law before then. It could take an estimated $600-B out of the US economy and drive it into recession again.

The Eurozone is not inspiring confidence. Greece’s finance minister said his country was running out of cash, growth in Germany is expected to weaken in the next 2 Quarters, and France’s central bank said the country’s economy would slip into recession as Y 2012 ends.

Germany and France are the Eurozone’s 2 largest economies, and Greece has been scraping by, thanks to a EUR 130-B bailout.


Paul A. Ebeling, Jnr.

Paul A. Ebeling, Jnr. writes and publishes The Red Roadmaster’s Technical Report on the US Major Market Indices, a weekly, highly-regarded financial market letter, read by opinion makers, business leaders and organizations around the world.

Paul A. Ebeling, Jnr has studied the global financial and stock markets since 1984, following a successful business career that included investment banking, and market and business analysis. He is a specialist in equities/commodities, and an accomplished chart reader who advises technicians with regard to Major Indices Resistance/Support Levels.

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