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AAPL, NOK, JPM, P, XLF, C, IBM, GOOG, BAC, JPM, GM, AZO, PBY, XHB, LEN, PHM, FCX, MMR, PXP, XBH, LEG, WHR

DJIA 13034.49+82.71 (0.64%) NAS 2973.70-22.99 (-0.77%) S&P 5001409.28+2.23 (0.16%)

Industry Watch

Strong: Energy, Financials, Telecoms
Weak: Materials, Technology

Stocks finished higher note, but gave up a large part of their gains into the close.

The major averages showed notable divergence as the DJIA led with a gain of 0.6% while NAS lost 0.8%.
The tech-heavy index lagged the broader market due to considerable weakness in shares of Apple NASDAQ:AAPL 538.79, -37.05) which fell 6.4% and saw their largest 1-day fall in 4 yrs.

The S&P 500 held near its session high for most of the afternoon before late in the day selling pared its gain to 0.2%.

Even though Apple lagged, other large cap technology stocks saw narrower losses. Google NASDAQ:GOOG 687.82, -3.21 slipped 0.5% and International Business Machines NYSE:IBM 188.65, -0.71 lost 0.4%.

Pandora Media NYSE:P 7.80, -1.65 fell 17.5% after reporting its earnings. Although the Internet radio operator beat on earnings and revenue, the company guided Q-4 top and bottom lines below consensus. The company said its November 2012 audience has increased 58% Y-Y.

Nokia NYSE:NOK 3.88, +0.44 rose 12.8% after the SmartPhone maker signed an agreement with China Mobile to sell its Widows-based Lumia 920 device.

Financials led the broader market and the SPDR Financial Select Sector ETF NYSEArca:XLF 15.85, +0.19 advanced 1.2%.

Citigroup NYSE:C 36.46, +2.17)rallied 6.3% after the company announced plans to reduce expenses and improve efficiency. As part of the plan, Citigroup will discharge more than 11,000 employees. In addition, the Y 2012 pre-tax charges are expected to total $1-B. Looking at other majors, Bank of America NYSE:BAC 10.46, +0.63 advanced 5.7% and JPMorgan Chase NYSE:JPM 41.20, +0.63 added 1.6%.

Tuesday night the WS-J opined on build-up in car dealer inventories. The article also pointed to large incentives offered by automakers in order to provide relief to inventories and entice new customers.

General Motors NYSE:GM 25.00, -0.41 is a notable standout among those offering cash discounts. The company has attempted to jump-start sales by offering between $2,900 and $3,500 in incentives.

Automakers and auto parts store operators underperformed today. General Motors shed 1.6% while AutoZone NYSE:AZO 360.27, -6.53 and Pep Boys NYSE:PBY 9.48, -0.09 lost near 1.5% each.

Homebuilders were broadly weaker and the SPDR S&P Homebuilders ETF NYSEARCA:XHB 25.65, -0.64 shed 2.4%. As a result of the industry-wide weakness, major builders lost in excess of 2.0%.

Pulte Group NYSE:PHM 16.20, -0.89 and Lennar NYSE:LEN 36.42, -1.36 saw respective losses of 5.2% and 3.6%. In addition to individual builders, home improvement stocks also underperformed. Whirlpool NYSE:WHR 98.62, -1.80 settled lower by 1.8% and Leggett & Platt NYSE:LEG 27.17, -0.68) slid 2.4%.

In M&A news: Freeport McMoRan NYSE:FCX 32.16, -6.12) slumped 16.0% after the company confirmed it will acquire Plains Exploration & Production NYSE:PXP 44.50, +8.45 and McMoRanExploration NYSE:MMR 15.82, +7.36 in transactions totaling $20-B.

US Major Market Indexes Technical Analysis
Date Symbol Price Technical Analysis Support Resistance
5 Dec 2012 QQQ 65.19 Neutral (-0.14) 64.29 65.21
5 Dec 2012 DIA 130.63 Neutral (-0.02) 130.52 131.12
5 Dec 2012 SPY 141.99 Neutral (0.06) 141.56 143.49

Looking at today’s economic data, the weekly MBA Mortgage Index pointed to a 4.5% rise in new mortgage applications during the past week. Today’s reading followed prior week’s decline of 0.9%.

According to today’s ADP National Employment Report, employment in the nonfarm private business sector rose by 118-K in November. This was below the 125-K increase expected by the consensus.

Productivity data for Q-3 showed an increase of 2.9%, which was better than the 1.9% increase that had been reported in the preliminary reading. It was also better than the 2.7% increase that had been broadly expected. Unit labor costs for the third quarter were revised lower to reflect a 1.9% decrease after they had reportedly slipped 0.1% in the preliminary reading. Economists polled had expected that unit labor costs would tick down in the revised reading to reflect a decrease of 0.8%.

October factory orders showed an increase of 0.8%, which was better than the Briefing.com consensus of a 0.1% decrease. Wednesday’s reading follows last month’s 4.8% increase.

The November ISM Services Index was reported at 54.7, which is ahead of the 53.7 forecast by the Briefing.com consensus, and down from October’s reading of 54.2.

Tomorrow’s economic data will focus on jobs as November Challenger Job Cuts will be reported at 7:30 a EST while weekly initial and continuing claims will be announced at 8:30 a EST.

The Bank of England and European Central Bank will both announce rate decisions.