- S&P 500
pulls back from another record high
- Taper bets, budget talks dominate market sentiment
- Banks in focus ahead of Volcker Rule vote
Dow Jones: -0.08%
S&P 500: -0.08%
US stocks edged slightly lower on Tuesday morning as the S&P 500 pulled back after hitting an all-time high the previous session, its 39th record close of the year so far.
However, downside was being limited after data showed that job openings rose to 3.93m in October, up from 3.88m the month before and ahead of forecasts.
Markets are continuing to focus on a potential tapering of stimulus ahead of the Federal Reserve's next policy meeting on December 17th to 18th. However, ongoing budget talks in Washington and a vote on new banking regulation were also being closely watched today.
Stocks gained yesterday despite increased bets over a taper after St Louis Fed President James Bullard said that a small taper of asset purchases might be possible this month. Meanwhile, Fed officials and well-known hawks Richard Fisher and Jeffrey Lacker also said that policymakers would discuss lowering the rate of asset purchases but gave no specific details.
According to a recent survey by Bloomberg, 12 out of 35 economists believe that the Fed will begin to taper at its meeting next week, nine said a withdrawal will start in January while the remaining 14 don't expect a scaling back of stimulus until March.
Talks in Washington were continuing to make headlines today as markets await details from the 29-member panel which is responsible for drawing up a budget blue-print for Congress by December 13th. However, while specific details of the talks remain unknown, House Democrat Steny Hoyer told CNBC: "I don't like the deal I've heard about".
Acting as a backdrop, Mark Hulbert from MarketWatch pointed out today that the Dow Jones Industrial Average could be hitting a "dangerous triple top", trading at similar levels (in inflation-adjusted terms) to its highs of 2000 and 2007. "It should give us pause to note that the market strong as it has been is only back to the level that turned the market back on two prior occasions," he said.
Outcome of Volcker Rule closely watched
Banking stocks were in focus today as investors await the outcome of the Volcker Rule, as Wall Street's top five regulators are set to vote on the plan to prohibit proprietary trading by banks. Goldman Sachs, Citigroup, Bank of America and JPMorgan Chase & Co were all making gains in morning trade, though some regional banks were trading lower.
Lululemon Athletica advanced after founder Chip Wilson stepped down as Chairman of yogawear retailer.
Rambus rallied after Micron Technology agreed to pay $280m in the next seven years for the right to use patents for the manufacture of integrated-circuit products.
Analogic declined after the medical and airport-security device maker reported quarterly sales that missed analysts' estimates.
West Texas Intermediate crude futures were up $1.168 at $98.490 per barrel, according to the ICE.
The 10-year Treasury yield fell four basis points to 2.80%.