As Barron's noted, the average daily volume on the NYSE last week fell to 3.3 billion shares, compared with 5.5 billion that changed hands during the same period in 2009, when we were slowly emerging from the Great Recession.
The "fiscal cliff," which could drain $607 billion from the U.S. economy through tax increases and spending cuts, dominated U.S. news and moved markets.
But the fiscal cliff, along with the $16.4 trillion national debt and the growing federal deficit, took a back seat Monday as the focus shifted to Europe.
Anxious market participants kept a wary eye on Italy after Prime Minister Mario Monti announced he is resigning, citing a loss of support in Parliament. Italian bonds plummeted with the yield on the 10-year rising the most since August.
French, Belgian and Austrian 10-years dropped to euro-era lows, and Spain's debt also declined.
Bucking the trend was Greece, where bonds gained after the ailing country pushed further out the deadline for buying back some of its mountainous debt.
Elwin de Groot, a senior economist at Rabobank Nederland in Utrecht, Netherlands, told Bloomberg News: "We are seeing a selloff but I wouldn't call it a panic yet. The auction this week could be an interesting litmus test for investors. This has also created uncertainty for
Italy's deep-rooted economic troubles and political drift have been taken too lightly, a bevy of analysts warned.
As Nomura Securities' Silvio Peruzzo wrote in a note to clients, "Markets have grown too complacent about Italy, in our view."
What's Moving in the Stock Market Today Equities here in the states were coming off an 81-point rally Friday, which marked the third consecutive up week for the Dow Jones Industrial Average.
Doing its part to goose the index higher Monday was McDonald's Corp. (NYSE: MCD). The fast-food giant reported November same-store sales rose more than expected after a disappointing showing in October. Investors ate up the news, sending shares higher by more than 1% in early trading to $90.17.
Jefferies took a bite out of Apple Inc. (Nasdaq: AAPL), slicing the price target by $100 to a still-juicy $800. Shares of Apple lost some 52 points last week and gave back another 5 in mid-Monday morning trading.
FedEx Corp. (NYSE: FDX) embarked on what is expected to be its busiest day of the year Monday, transporting 19 million packages, a nearly 11% increase from 2011. Shares gained 1% to $90.35, not far off their 52-week high.
Shares of travel company Priceline.com Inc. (Nasdaq: PCLN) declined more than 4% after Deutsche Bank cut the stock to a "Hold" from a "Buy."
Meanwhile, rival Expedia Inc. (Nasdaq: EXPE) joined the ranks of companies paying a special year-end dividend (52 cents). Shares slipped more than 2%.
Gold gained $9.80 to $1,715 and oil added 50 cents to $6.42.
The Market's Week Ahead On Tuesday, the Fed begins its two-day Federal Open Market Committee (FOMC) meeting. The Fed is expected to announce Wednesday a large-scale asset-purchase plan to replace the central bank's similar program, Operation Twist, which is to end soon.
Facebook Inc. (Nasdaq: FB) is to be added to the Nasdaq 100 Index after close Tuesday, replacing Infosys Ltd. (Nasdaq: INFY), which is defecting to the NYSE. Share volume of the social networking behemoth is expected to spike as funds required to hold Nasdaq 100 stocks grab shares.
More Nasdaq 100 reshuffling will come Friday. The additions Deutsche Bank foresees are Kraft Foods Group Inc. (Nasdaq: KRFT), Liberty Media Corp. (Nasdaq: LMCA) and Equinix Inc. (Nasdaq: EQIX). Those seen getting tossed are Netflix Inc. (Nasdaq: NFLX), Green Mountain Coffee Roasters Inc. (Nasdaq: GMCR), Flextronics International Ltd. (Nasdaq: FLEX) and Electronic Arts Inc. (Nasdaq: EA).
Thursday brings reports on November's Producer Price Index (PPI) and November retail sales.
Also, a hearing will be held in U.S. Bankruptcy Court in New York on claims by unsecured creditors of the old General Motors (NYSE: GM).
The court will hear allegations that some hedge funds got special treatment from GM while the then-struggling automaker was preparing for bankruptcy. Presiding Judge Robert Gerber could overturn the $50 billion bailout GM received.
On Friday, look for the November Consumer Price Index.
In the stock market today, the Dow was up 18.01 points, or 0.14%, at 13,173.14 in afternoon trading.
Related Articles and News:
- Money Morning:
What the Fiscal Cliff Means to Investors
- Money Morning:
Risky Dividend Paying Stocks to Avoid
- Money Morning:
The Federal Reserve is Socialism's Insidious Tool
- CNN Money:
Stocks cling to slim gains
- Bloomberg News:
Italy Bonds Slump as Monti Says He'll Resign; Greek Debt Gains
- The Wall Street Journal:
Stocks Hold Small Gains
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