Is the market getting the December blues?

Updated: 6:20 p.m. ET

The stock market has something to say about the state of affairs in the United States. They're a bit loopy. There is more hope for, dare we say it, Europe. How else can one explain that U.S. stocks will end November largely unchanged, while European stocks ended the month generally higher?

That makes December look problematic and may not do much for investor confidence in the stock market.
The Dow Jones industrials ($INDU) ended Friday 4 points to 13,026 but down 0.5% for the month, their second losing month in a row. The Standard & Poor's 500 Index ($INX), unchanged for the day at 1,416, finished November up 0.3%. The Nasdaq Composite Index ($COMPX) had a more respectable month, up 1% but down 2 points on the day to 3,0101.

For the year, the Dow is up 6.6%, while the S&P 500 is up 12.6% and the Nasdaq is still up 15.6%.

The problem for investors is that the market peaked in mid-September. The Dow is off 4.2% from its September peak; the S&P 500 and Nasdaq are down 3.4% and 5.5%, respectively, from their highs.

December, in theory, should be a better month. It is the best month for the S&P 500 and second-best month for the Dow and Nasdaq, according to the Stock Trader's Almanac. But a weak December can signal trouble for the start of the next year. Stocks fell in November and December 2007, and we know what happened in 2008.

The week ahead is heavy on economic reports, with the November jobs report due on Friday. The expectation appears to be for the unemployment rate to hold at 7.9%.

The larger problem facing the U.S. market now is if Congress and the White House can find a solution to the fiscal cliff, the witch's brew of required spending cuts and tax increases that are supposed to kick in on Jan. 1.

The battle is over how to generate more revenue and cut spending. The Obama administration wants to raise tax rates on the wealthy. The Republicans want to close tax loopholes. There is no agreement on spending cuts, and there's talk that the U.S. debt ceiling will become a big issue after the first of the year.

In fact, the market seems to move up and down according to whether the news cycle is saying a solution is coming or not coming. Thursday, House Speaker John Boehner sounded downbeat after a meeting with Treasury Secretary Tim Geithner, and the market struggled on Friday.

While November wasn't an easy month, it wasn't awful. If you want awful, look to November 2008 when the Dow fell 6%, with the S&P 500 off 7.5%, and the Nasdaq 10.8%.

There was some good news for investors. The market fell around 4% in the two days after President Obama won re-election on Nov. 6. More than half of those gains were recovered by Friday. The Nasdaq has recovered nearly all of its post-election losses.

Gold (-GC) fell 0.4% on the month, with the February contract finishing at $1,712.70 an ounce. Crude oil (-CL) settled at $88.91 a barrel on Friday, up about 3.1%. But the price you pay at the gas pump is down 3.4% for the month to $3.402 a gallon, according to AAA's Daily Fuel Gauge Report.

Helping the market was the acceleration of dividend payments from early 2013 to this December so that investors don't get hit with higher taxes if the fiscal cliff problem can't be fixed.

In addition, a number of companies declared special cash dividends that will be paid by the end of the year to avoid higher rates, including Las Vegas Sands (LVS), Wynn Resorts (WYNN) and Costco Wholesale (COST). Las Vegas Sands was up 0.2% for the month. Wynn was down 5.5%, and Costco jumped 5.6%.

Consumer discretionary stocks led the market in November. Abercrombie & Fitch (ANF) was the S&P 500 leader for the month, up 50.7%, followed by Titanium Metals (TIE), Trip Advisor (TRIP) and Electronic Arts (EA).

Abercrombie also was the best performer among stocks in the S&P Retail Index ($RLX), which climbed 5% this month and 29.2% for the year. Lowe's (LOW), Home Depot (HD), Costco Wholesale (COST), TJX Companies (TJX) and Amazon.com (AMZN) also had strong months.

Cisco Systems (CSCO) was the top Dow stock in November, up 10.3%, followed by Home Depot (HD), Bank of America (BAC) and Boeing (BA). Intel (INTC), Hewlett-Packard (HPQ) and Chevron (CVX) were the laggards.

The Nasdaq-100 Index ($NDX) leaders were Green Mountain Coffee Roasters (GMCR), up 49.5%; Research In Motion (RIMM), up 46.4% and Electronic Arts, up 17.3%. The laggard was Sears Holdings (SHLD), down 33%.