Back to top

Ahead of Wall Street

Friday, December 23, 2011

Stocks will likely remain in cheery mood today despite the relatively weak tone of this morning’s economic reports. On a positive note, resolution of the payroll tax cut issue should help remove one lingering source of uncertainty for many consumers. Trading volumes are expected to remain thin ahead of the long Christmas weekend. The stock market remains open for the full day today, while the bond market closes early.

Of this morning’s economic docket, we got a weaker than expected reading from the November Personal Income & Outlays report, while the Durable Goods report came in a tad weaker as well. The New Home Sales numbers come out a little later. Growth in Personal Income came in weaker than expected, while the savings rate ticked further down a bit. Consumer spending, which accounts for more than two thirds of the economy, increased at a 0.1% pace in November, while the expectation was for a 0.3% increase. Consumer spending had increased 0.1% and 0.7% in October and September, respectively.

While Thursday’s GDP report saw a negative revision to third quarter consumer spending, the overall tone of recent incoming data has been pointing towards continued momentum on the spending front. Initial jobless claims have consistently dropped in the last three weeks, reaching their lowest level since April 2008. This appears to be showing up in consumer confidence readings, which has perked up lately after staying down in the summer. All of this has pushed up GDP growth expectations for the current quarter, which remains above 3% at present.

In corporate news, Compuware Corp. (CPWR - Analyst Report) will be exiting the S&P 500 index after the market close on December 30th, to be replaced by WPX Energy, a spin-off from Williams Companies (WMB - Analyst Report). The spin-off is expected to be completed on December 31st; while Williams itself will remain part of the index. In other news, Shutterfly (SFLY - Analyst Report) provided weak guidance for the current quarter.

Sheraz Mian
Director of Research

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
FELCOR LODG… FCH 10.47 +3.46%
OLD DOMINIO… ODFL 63.48 +1.18%
VASCO DATA… VDSI 13.57 +0.67%
AMEDISYS IN… AMED 20.18 +0.10%
LENOVO GROU… LNVGY 27.07 +0.04%