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Bob Carey
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  US Stocks Week Ended December 7, 2012
Posted Under: Weekly Market Commentary
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Equities were mixed for the week, with the Dow Jones Industrial Average up 1% and the technology heavy NASDAQ falling almost the same percentage. A 9% drop for the week in Apple Inc. led the selloff in tech shares as Microsoft inked a smart phone deal with China's largest telecommunications provider and investors locked in capital gains at a potential lower rate. The market remained focused on the looming fiscal cliff as House Speaker John Boehner and President Barack Obama try to hammer out a deal. Oracle Corp. and Coach Inc. became two of the latest companies to announce a special cash dividend before the end of the year to avoid a potential new tax rate of 43.4% for top earners, versus the current 15% rate. According to Markit Securities Finance, special cash dividends are at an all-time high with 159 companies announcing payments in the fourth quarter to date. In employment news, the jobless rate fell two-tenths of a percentage point to 7.7%, the lowest rate since December 2008. November nonfarm payrolls rose by a better-than-expected 146,000 versus the 80,000 predicted by economists. In other stocks news, Big Lots Inc. lost ground after it was reported that the CEO is being investigated for selling $10 million in shares right before the shares plunged 24%. Investors reacted negatively to Freeport-McMoRan Copper & Gold Inc. buying both McMoRan Exploration Co. and Plains Explorations & Production Company. Freeport-McMoRan Copper & Gold Inc. paid a hefty premium for both firms and is expanding back into exploration and production, an area they had previously divested. Looking ahead, markets will remain volatile in the near term due to uncertainty over a comprehensive bipartisan plan to stave off the fiscal cliff. For investors with a longer time horizon, uncertainty should create a nice entry point for many individual equities, as they are generally driven by their cash-flows and earnings over time.
Posted on Thursday, December 13, 2012 @ 9:54 AM • Post Link Share: 
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These posts were prepared by First Trust Advisors L.P., and reflect the current opinion of the authors. They are based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security.
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