Will stocks rebound in December?

A strong start to November ended in a fade as Europe's debt problems worried investors. But bulls hope recovery signs will spark new buying.

By Charley Blaine Dec 1, 2010 5:54AM
Charley BlaineWhen 2010 began, it was possible to see the stock market rising maybe 10% or so -- if everything fell into place and things didn't get too nutty.

With November's end, the market -- at least as measured by the Standard & Poor's 500 Index ($INX) -- is up 5.9% for the year after a November that saw the stock market end flat. OK, the S&P 500 ended down 0.23% in November. The Dow Jones industrials ($INDU) slipped 1%, and the Nasdaq Composite Index ($COMPX), off 0.4%.

Maybe December will be a stronger month. Since 1950, December has been the year's second-best month for the S&P 500 and the Dow and the third-best month for the Nasdaq.

But there's a lot of unease in the markets right now -- Europe, China, Korea, the oh-so-slow recovery.

At the same time, there's evidence that the U.S. economy is starting to gain some momentum: Manufacturing is strengthening around the country. Auto sales are stronger.

If November will be remembered for anything, it's this: The S&P 500 rose 3.6% in the first five days of the month in part because the economy was beginning to look stronger again and because Wall Street wanted the Republicans to regain control of Congress.

Then the rally faded and the S&P fell 3.7% between its November peak close of of 1,226 on Nov. 5 and Tuesday's close of 1,181. The Dow and Nasdaq fell similar amounts.

The problem wasn't the domestic economy. It was Korea. It was Europe. Again. The debt problems of Ireland, Portugal and quite possibly Spain caused enough havoc that many investors looked for safe places to stash their cash.

That meant gold; the metal rose 2.2% to $1,385 and is up 26% for the year.

But the U.S. dollar had a better month. The U.S. Dollar Index, which measures the greenback against a basket of currencies,  ended the month up 4.9%. The dollar rose nearly 7.5% against the euro.

The fade in the latter half of November may be simple consolidation -- the market's selling off until it hits a support or trigger level that generates new buying. Right now, the trigger level is 1,174 on the S&P 500. Apple

If the economic data continues to improve -- Friday's payroll and unemployment report will be a key -- the market could get beyond Europe's problems and worries about Korea and rebound into the new year.

One stock that won't appear in the tables below is Apple (AAPL), which was up a respectable but hardly showy 3.4% in November. But the stock jumped 28% in September and an additional 9.7% in October on excitement over the success of the iPad and iPhone.

Gold, silver and other indicators in November



Nov. 30 

Month chg.

Ytd. chg.
Gold

1,385.00

2.02%

26.35%
Silver

$28.19

14.74%

26.35%
Crude oil 

$84.11

3.29%

5.99%
10-year Treasury yield

2.80%

7.08%

-27.22%
U.S. Dollar Index 

81.27

4.92%

3.90%

Silver was an even better play, rising 14.7% to $28.185. It's been a fabulous bet all year, rising 67%. The iShares Silver Trust (SLV) jumped 13.5% in November and is up 65% on the year.

November was not much of a month to be in bonds. The iShares Barclays 20-plus-year Treasury bond (TLT) exchange-traded fund fell 2% in November -- after declines of 2.8% in September and 4.8% in October. But as the dollar rose in the last weeks, the fund started to rise.

Within the stock market itself, energy was the leading sector. The S&P 500's energy sector was up 5.1%. The trailing sector was utilities, down 3.6% for the month and down 1.8% for the year.

How S&P 500 sectors performed in November
S&P sector

Nov. 30 

Month chg.

Ytd. chg.
Energy 

465.21

5.11%

8.20%
Consumer Discretionary

284.18

2.41%

16.95%
Materials 

217.51

0.93%

8.86%
Industrials

279.95

0.77%

15.21%
Financial 

194.14

-0.86%

0.18%
Consumer Staples

292.39

-1.35%

6.59%
Telecommunications

119.66

-1.43%

4.38%
Information Technology

384.45

-1.82%

3.71%
Healthcare 

349.62

-3.15%

-3.48%
Utilities

155.08

-3.59%

-1.84%
S&P 500 Index

1,180.55

-0.23%

5.87%

Only eight of the 30 Dow stocks finished with gains in the month, led by Caterpillar (CAT), up 7.6% to $84.60, and Intel (INTC), up 5.5% to $21.16.

The laggards were Cisco Systems (CSCO), down 16.2% to $19.16,  and Boeing (BA), down 9.7% to $63.77.

Dow winners and losers 
Company

Nov. 30

Month chg.

YTD chg.
Winners








Caterpillar

84.60

7.63%

48.45%
Intel

21.16

5.52%

3.71%
Exxon Mobil

69.56

4.62%

2.01%
American Express

43.22

4.25%

6.66%
Coca-Cola

63.17

3.02%

10.82%
Losers








Cisco Systems

19.16

-16.19%

-19.97%
Boeing

63.77

-9.73%

17.81%
Pfizer

16.30

-6.40%

-10.39%
Kraft Foods

30.25

-6.26%

11.30%
Microsoft

25.26

-5.28%

-17.13%

Among S&P 500 stocks in November, there were 246 winners and 251 losers in November. The biggest winner was Harman International Industries (HAR), the maker of audio products, up nearly 30% $43.59. It was followed by oil-refiner Tesoro (TSO), up 25.9% to $16.32, and online job service Monster Worldwide (MWW), up 25% to $22.58.

The loser was Dean Foods (DF), the dairy foods producer, which was hit hard by rising feed costs. It was followed by homebuilder Pultegroup (PHM), down 20.2% to $6.26; and Wisconsin banking company Marshall & Ilsley (MI), down 12.1% to $4.79.

Standard & Poor's 500 winners and losers
Company

Nov. 30 

Month chg.

Ytd. chg.
Winners








Harman International 

$43.59

29.93%

23.55%
Tesoro 

$16.32

25.93%

20.44%
Monster Worldwide

$22.58

25.03%

29.77%
Urban Outfitters

$37.79

22.73%

8.00%
Cabot Oil & Gas

$34.97

20.67%

-19.78%
Fluor Corporation

$57.83

20.00%

28.40%
Salesforce.com

$139.22

19.94%

88.72%
Whole Foods Market

$47.22

18.79%

72.02%
Halliburton 

$37.84

18.77%

25.76%
SanDisk

$44.60

18.52%

53.85%
Losers








Dean Foods 

$7.26

-30.19%

-59.76%
Pultegroup


$6.26

-20.25%

-37.40%
Marshall & Ilsley

$4.79

-19.46%

-12.11%
SUPERVALU

$9.04

-16.22%

-28.87%
Cisco Systems

$19.16

-16.19%

-19.97%
News Corp.

$13.64

-15.23%

-0.37%
Regions Financial 

$5.38

-14.60%

1.70%
R.R. Donnelley

$15.76

-14.58%

-29.23%
Airgas

$61.10

-13.81%

28.36%
Archer Daniels Midland

$28.99

-13.00%

-7.41%


This brings us to the Nasdaq-100 Index ($NDX.X), which tracks the largest Nasdaq stocks. The index slipped a modest 0.3%, weighed down by such stalwarts as Google (GOOG), down 9.5% to $551.51; Cisco, down 16.2% to $19.16; and Oracle (ORCL), down 8% to $27.05.

 

The index leaders for the month were contemporary retailer Urban Outfitters (URBN), up 22.7% to $37.79; engineering company Foster Wheeler (FWLT), up 19.5% to $28; and flash-memory-maker SanDisk (SNDK), up 18.5% to $44.60.

The laggards were  Warner Chilcott (WCRX), down 20.7% to $19.02; Cisco and Vertex Pharmaceuticals (VRTX), down 13.5% to $33.13.


Nasdaq-100 winners and losers





Company

Nov. 30 

Month chg.

Ytd. chg.
Winners








Urban Outfitters

$37.79

22.73%

8.00%
Foster Wheeler

$28.00

19.45%

-4.89%
SanDisk

$44.60

18.52%

53.85%
NVIDIA

$13.61

13.21%

-27.15%
Altera 

$35.09

12.32%

55.06%
Mattel

$25.84

10.76%

29.33%
Illumina

$60.12

10.70%

95.96%
Ross Stores 

$64.88

9.98%

51.91%
Broadcom 

$44.49

8.96%

41.37%
Research In Motion 

$61.83

8.63%

-8.45%
Losers








Warner Chilcott

$19.02

-20.68%

-33.19%
Cisco Systems 

$19.16

-16.19%

-19.97%
Vertex Pharmaceuticals

$33.13

-13.50%

-22.68%
Garmin

$28.96

-11.81%

-5.67%
First Solar

$122.85

-10.77%

-9.27%
Google

$555.71

-9.45%

-10.37%
Apollo Group

$34.00

-9.28%

-43.88%
Expedia 

$26.33

-9.05%

2.33%
Sears Holdings

$65.50

-9.00%

-21.51%
Vodaphone

$25.06

-8.91%

8.53%

 

 

11Comments
Dec 1, 2010 9:19AM
avatar
Has any one besides me noticed that since the house of representatives has become republican, the stock market has been on a downward spiral.
Dec 1, 2010 4:26PM
avatar
Hmmmm. I guess we really are stupid to believe all this hyperinflated temporary BS such as temp. seasonal jobs. give me a break!
Dec 1, 2010 4:42PM
avatar

Good point DMAC56, the numbers can be seen as only a "quick fix" and should be expected to drop after the holidays. Remember the Census Takers? Crying

 

However, for the untrained eye this is welcomed news for the holiday season.

 

The profits being realized TODAY are in fact real though, lets keep that in focus as well. Light bulb

poz4poz.com

 

 

Dec 1, 2010 3:30PM
avatar
What going to happen to that job increase when these Christmas workers are layed off when Christmas is over?
Dec 1, 2010 1:18PM
avatar
It is worse then that BuckieBoy, the economy needs to create 135,000 jobs a month just to keep up with new entrants into the labor market. We added 135k-92k=43,000 to the unemployed IN THE CHRISTMAS HIRING SEASON.
Dec 1, 2010 12:46PM
avatar

There were not that many jobs created, It was That many people who dropped off of UNEMPLOYMENT last month. How do I know , My son was one of them.

After tonight it will be more andnext month it will be tht many7 more , About tWO MILLION. Are you going to say that this Addministration created TWO MILLION Jobs?

Dec 1, 2010 6:52PM
avatar
Don't get excited about today's Dow gain...happens every year at this time (Hanukkah)...traders​ call it the kike rally.
avatar

I agree with Sabbysteve.  Anytime we start relying on computers, there is always someone that knows a bit more about them than everyone else that will try to take advantage of it.   Talk about Dark Holes in space.  The inner workings of computers are Dark Holes sucking the money right out of our pocket books.

This split second trading ability is destroying the only means most common people have of staying afloat and keep their heads above water in the world today. 

Go back to the floor traders and slow down this stock market process for stability.  Computers are too easy to manipulate.

Is there a redundant system in place for the Market if we lose our electronic world?  When the market crashed a 1,000 points not too long ago, someone made a fortune in the chaos.   But 99.999% of the people, even those in the business will never know who it was or how much they made.

Dec 1, 2010 9:47AM
avatar

W/unemployment dumping 2mil or so that will show an improvement in the unemployment figures they'll say numbers decreased things are improving. Stocks will soar. Wait for Fed deficit commissions recommendations this is a bitter pill for all.

Quote

The key to prosperity, in his view, lay not in sound money and rising productivity, but in letting the good times roll -- through government action aimed at maintaining high wages and high stock market valuations. Ben's doing the Hoover shuffle.

 

Dec 1, 2010 8:15AM
avatar
I am hoping the markets will rebound in Dec. I sold in Sept, but now I am ready to get back in. The only thing that worries me is the emotions that drive the market along with the reliance on computer trading. I believe that practice should be banned. If Wallstreet wants the small investor back in the market they need to do show us market stability and honesty.
Dec 1, 2010 11:33AM
avatar

NO! dow drops to 10,500 after a dismal sales figure and if it isn't it just means a higher debt load the consumer is carrying, come january the dow drops another 500 then continues to drop to 9000!

 

ho ho ho merry ah buh hahahahaha Martini glassOpen-mouthedMartini glass

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