Stock market bulls face another challenge

Consumer Sentiment Improves Unexpectedly

Economic data was on the light side this past week, but the week ended with a welcome upside surprise in the form of an unexpected improvement in consumer sentiment for November. The Reuters/University of Michigan Consumer Sentiment Index climbed from 60.9 in October to 64.2 in its preliminary reading posted on Friday. Economists had been expecting it to inch higher to 61.3.

This will be another relatively light week for data, but keep an eye out for October's Producer Price Index on Tuesday and the Consumer Price Index on Wednesday. Retail sales for October are also due out on Tuesday morning. A small gain in overall sales is expected.

Even though earnings season starts to wind down this week, some name to watch for are the retailers. JC Penny (JCP) and Urban Outfitters (URBN) report on Monday, while Saks (SKS) reported on Tuesday. Abercrombie *& Fitch (ANF) reports Wednesday and Gap (GPS) reports Thursday. Ann (Taylor) (ANN) reports on Friday. Home improvement giants Home Depot (HD) (Tuesday) and Lowe's (LOW) (Monday) also report this week. So far this season about 70% of earnings reported in the S&P 500 have topped expectations. Less than 10% are left to report.

S&P 500 (Figure 2)

Index Wrap-up

The Dow Jones Industrial Average ($DJI) ended the day on Friday with a gain of 258.89 points, or 2.19%, and closed at 12,153.68. All of the Dow's index's thirty components posted a gain. The top performers were Disney (DIS) (+5.95%), Caterpillar (CAT) (+4.26%), Alcoa(AA) (+3.41%), and Intel (INTC) (+3.8%). The weakest were the telecoms: Verizon (VZ) (+0.51%) and AT&T (T) (+0.89%). The Dow ended the week higher by 1.42%. It is currently up 4.98% year-to-date.

The S&P 500 ($SPX) finished the session with a gain of 24.16 points, or 1.95%, and closed at 1,263.85. The strongest individual percentage performers in the index were Staples (SPLS) (+6.12%), Genworth Finl. (GNW) (+6.11%), Disney (DIS) (+5.95%), and Ryder Sys. (R) (+5.86%). Only thirteen of the index's components posted a loss. The weakest were E Trade Financial Corp. (ETFC) (-4.11%) and Valero Energy Corp. (VLO) (-3.28%).

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