Another Late-Session Fade For Stocks

After hitting record intraday highs, stocks faded during the final 30 minutes of Tuesday’s session, in a repeat of what we saw on Monday.
 
Stocks repeated the late-day fade routine which we saw on Monday, as investors demonstrated reluctance to maintain their positions overnight with significant economic reports due. Tuesday morning’s release of the Case-Shiller Home Price Index brought good news. The 20-City Composite rose 0.7 percent between August and September. The U.S. National Home Price Index rose 3.2 percent during the third quarter of 2013. Homebuilder stocks soared and the SPDR S&P Homebuilders ETF (XHB) jumped 2.07 percent.
 
Unfortunately, The Conference Board’s Consumer Confidence Index for November fell to 70.4 from October’s 72.4. The result will obviously have investors worried about Wednesday’s release of the Thompson Reuters/University of Michigan Consumer Sentiment Index for November. The Conference Board will be releasing its Leading Economic Index on Wednesday.
 
The Dow Jones Industrial Average (DIA) picked up just 26 percent of a single point to finish Tuesday’s trading session at a new record-high closing level of 16,072.80 for an incomprehensibly insignificant advance, after reaching a new record intraday high of 16.120.25. The S&P 500 (SPY) made a similarly lame, 0.01 percent advance to 1,802.75, closing above 1,800 for the third consecutive session, after hitting a new record intraday high of 1,808.42 (compared with Monday’s 1,808.10).
 
The Nasdaq 100 (QQQ) climbed 0.53 percent to finish at 3,445. The Russell 2000 (IWM) surged 0.87 percent to a record-high close at 1,134.53 after hitting a new record intraday high of 1,136.24.
 
In other major markets, oil (USO) declined 0.38 percent to close at $33.69.
 
On London’s ICE Futures Europe Exchange, January futures for Brent crude oil declined 4 cents (0.04 percent) to $110.96/bbl. (BNO).
 
February gold futures advanced $1.00 (0.08 percent) to $1,242.60 per ounce (GLD).
 
Transports got stuck in the holiday traffic on Tuesday, with the Dow Jones Transportation Average (IYT) declining 0.14 percent.
 
In Japan, the exchange rate for the yen continued to be the dominant factor in stock market activity. Japanese stocks declined on Tuesday as the yen gained unwanted strength. The yen strengthened to 101.45 per dollar just before the closing bell in Tokyo. A stronger yen causes Japanese exports to be less competitively priced in foreign markets (FXY). Toyota sahres sank 1.2 percent on the Tokyo Stock Exchange. The Nikkei 225 Stock Average fell 0.67 percent to 15,515 (EWJ).
 
In China, stocks declined slightly after Zhou Xiaochuan, Governor of the People’s Bank of China, delivered a speech based on the theme that the nation will rely on market-based reforms, rather than loose monetary policy to boost the nation’s economy. The Shanghai Composite Index declined 0.14 percent to 2,183 (FXI). Hong Kong’s Hang Seng Index dipped 0.01 percent to end the day at 23,681 (EWH).
 
Stocks retreated in Europe after a number of companies saw their share prices sink on disappointing guidance. Remy Cointreau took an 8.31 percent nosedive after forecasting a 10 percent decline in annual profits. Hugo Boss sank 2.17 percent after providing a downbeat outlook. The Euro STOXX 50 Index finished Tuesday’s session with a 0.33 percent decline to 3,062 – remaining above its 50-day moving average of 2,998. Its Relative Strength Index is 56.92 (NYSEARCA:FEZ).
 
Technical indicators revealed that the S&P 500 remained above its 50-day moving average of 1,738 after advancing 0.01 percent to finish Tuesday’s session at 1,802.75. Its Relative Strength Index nudged upward from 65.28 to 65.37. The MACD is on a level trajectory, just above the signal line, which would suggest that the S&P will remain near 1,800 in the immediate future.

On Tuesday, 3 sectors finished in positive territory and six sectors finished in the red.
 
Consumer Discretionary (XLY):  +0.59%
 
Technology:  (XLK):  +0.35%
 
Industrials (XLI):  +0.20%
 
Materials: (XLB):  -0.25%
 
Energy (XLE):  -0.25%
 
Financials: (XLF):  -0.09%
 
Utilities (XLU):  -0.99%
 
Health Care: (XLV):  -0.20%
 
Consumer Staples (XLP):  -0.09%
 
Bottom line:  Although stocks soared to record highs again on Tuesday, investors demonstrated the same reluctance to hold shares overnight as we saw on Monday, due to the impending release of important economic data. 

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