Stock Market News for December 8, 2010

Agreement on extending the Bush-era tax cuts for another two years did little to boost stocks Tuesday as concerns over European finances and a sharp jump in bond yields tempered investors’ enthusiasm.
 
The Dow Jones industrial average, after rising as much as 89 points, closed with a drop of slightly more than 3 points, or 0.03%, at 11359.16. Leading the decliners on the Dow, 3M (NYSE:MMM - Analyst Report) dropped 3.1%. The tech-heavy Nasdaq edged up 3.6 points, or 0.1%, to 2598.49. The broader S&P 500 index advanced 0.6 points, or 0.05%, to 1223.75. The widely followed index is just 2 points short of its 2010 high reached on November 5. The market’s measure of volatility, the CBOE Vix, dropped below 18.
 
However bond traders appeared concerned that the compromise on extending the tax benefits would lead to steeper budget deficits. They sold off bonds, pushing yields higher, with the yield on the benchmark 10-year notes jumping to 3.13%, a level not seen since late June. The agreement between President Obama and Republican leaders led to a brief rally in stocks in the morning before broader economic cut-short investors’ appetite for equities. 
 
An auction of $32 billion three-year notes witnessed weak demand, with a bid-to-cover ratio of 2.9, the lowest for the notes since February.  
 
Shares in Citigroup (NYSE:C - Analyst Report) jumped 3.8% on reports that the U.S. government has sold off its remaining stake in the banking giant. The federal government said it had sold off its stake in Citigroup for a $12 billion profit. Shares in 3M fell 3.1% after the company’s forecast organic sales growth for 2011 fell below analysts’ projections.

Leading the list of DJIA gainers were General Electric (NYSE:GE - Analyst Report), up 2%, Chevron (NYSE:CVX - Analyst Report), up 1.6%, Caterpillar (NYSE:CAT - Analyst Report), up 1.3%, Kraft (NYSE:KFT - Analyst Report), up 1.2%, and Wal-Mart (NYSE:WMT - Analyst Report), up 1.1%.

Natural gas distributor Nicor Inc. (NYSE:GAS - Analyst Report) jumped 4.3% to $48.79 after the company said it agreed to be acquired by AGL Resources (NYSE:AGL) in a cash and stock deal valued at about $2.4 billion. Shares in AGL, however, dropped 5.8% to $34.98.

S&P500 industry sector action was mixed, with utilities (-0.5%), oil and gas (-0.2%), basic material (-0.1%) and financial (-0.1%) shares leading the declines. On the upside were growth-oriented, industrials (+0.5%), telecommunications (+0.4%), consumer goods (+0.2%), consumer services (+0.1%), technology (+0.02%), and health care (+0.01%) shares

This morning's US futures show the market is headed for a flat open, with traders focusing their attention on demand for the upcoming US Treasury auction of 10-years and reports that Beijing could be working on inflation-fighting measures.

Read the full analyst report on MMM

Read the full analyst report on C

Read the full analyst report on GE

Read the full analyst report on CVX

Read the full analyst report on CAT

Read the full analyst report on KFT

Read the full analyst report on WMT

Read the full analyst report on GAS

Read the full analyst report on AGL