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US stock market daily report (December 13, 2012, Thursday)

December 14, 2012, Friday, 03:22 GMT | 22:22 EST | 07:52 IST | 10:22 SGT
Contributed by Millennium Traders

In a system status message on the Nasdaq web site Thursday at 10:59:39, the exchange said it will be canceling all premarket trades greater than 10% away from the prior day’s consolidated closing price between 9:29:00 and 9:29.59 Eastern time for the following big cap companies: AT&T Inc. (T:NYSE) trades at or below $31.04; Citigroup Inc. (C:NYSE) trades at or below $33.77; Goldman Sachs Group Inc. (GS:NYSE) at or below $106.28; Hewlett-Packard Co. (HPQ:NYSE) trades at or below $13.07; Kroger Co. (KR:NYSE) trades at or below $23.93; Sprint Nextel Corp. (S:NYSE) at or below $5.09; Ventas Inc. (VTR:NYSE) trades or above $71.58; Wells Fargo & Company (WFC:NYSE) trades at or below $30.15; Western Union (WU:NYSE) trades at or below $11.90. Per Nasdaq, this decision cannot be appealed.

President Barack Obama and House Speaker John Boehner are due to meet at the White House at 5:00 pm Eastern Time to discuss the fiscal cliff. In a daily White House briefing, press secretary Jay Carney said, “The parameters of an agreement are clear, they are not that complicated...and we look forward to the time when Republicans acknowledge that revenues not only have to be a part of the equation, but that rates on top earners have to go up as part of the revenue equation. When that happens, we believe we can reach a deal fairly quickly.” Carney also referred to Republican opposition to higher taxes on the wealthiest 2% as the single obstacle holding up a deal to avoid the fiscal cliff. “Rates on top earners have to go up as part of the revenue equation. When that happens, we believe we can reach a deal fairly quickly,” Carney said. Politicians continue to bicker, in public, over their difficulties in reaching a deal to avoid recession-inducing spending cuts and tax hikes at the start of the new year. As Boehner pressed the White House Thursday for spending-cut proposals, Wall Street reacted with stocks retreating to the downside. Boehner blasted the President and Democrats for looking to “punish small businesses” with higher tax rates. When a question was addressed to Boehner about whether he would permit a Senate bill that would extend current levels of taxation for 98% of Americans to get to the floor, he quickly sidestepped the question.

Richard Schulze, founder and former chairman of Best Buy (BBY:NYSE), is expected to make yet another bid for the stumbling electronics retailer. At the close of the trading session on Thursday, shares were sharply higher by 16%, on the news. Reportedly, Schulze has secured agreements to finance the deal from bankers and private-equity firms including Cerberus, Leonard Green & Partners and Texas Pacific Group. Schulze is also expected to meet with his top advisers, including former top Best Buy executives Brad Anderson and Al Lenzmeier. His original offer was nearly $8 billion however the new offer is expected to be substantially lower between $5 billion to $6 billion.

In a statement on Thursday, the U.S. Federal Reserve, the European Central Bank, the Bank of England, the Bank of Canada and the Swiss National Bank moved to extend an existing temporary U.S. dollar liquidity swap arrangement for another year through February 1, 2014. The arrangement would have expired on February 1, 2013, without the action. Temporary bilateral liquidity arrangements that would allow the banks to provide liquidity in any currency if needed will also be extended. At its next monetary policy meeting per the statement, the Bank of Japan will consider an extension of both arrangements. Under the program, the Fed lends dollars to other central banks in return for their currencies. The foreign central banks then use auctions to lend dollars to financial institutions under their jurisdiction.

The Labor Department reported on Thursday that U.S. producer prices fell a seasonally adjusted 0.8% in November, mostly because of lower energy costs. Core producer prices edged up 0.1% last month when excluding volatile categories of food and energy. The biggest one-month decline since March 2009 was seen in energy prices which sank 4.6% while the wholesale cost of food rose 1.3%. Over the past year wholesale prices have risen an unadjusted 1.5% or by a larger 2.2% excluding food and energy.

The U.S. Labor Department announced on Thursday that new applications for U.S. unemployment benefits fell by 29,000 to a seasonally adjusted 343,000 in the week ended December 8, putting initial jobless claims at the second lowest level for 2012. From two weeks ago and based on more complete data collected at the state level, initial jobless claims were revised up to 372,000 from an original reading of 370,000. Initial jobless Claims are near their lowest point in almost four years and now are below pre-Sandy levels. Over the past month, the average of new jobless claims sank by 27,000 to 381,500. In the weekly data, the four-week average reduces seasonal volatility and is seen as a more accurate barometer of labor-market trends. Continuing claims by the Labor Department decreased by 23,000 to a seasonally adjusted 3.2 million in the week ended December 1.

The U.S. Commerce Department said Thursday that U.S. retail sales climbed a seasonally adjusted 0.3% during November, mostly attributed to strong demand for autos and a variety of other goods. Sales remained flat when excluding autos which can have an outsized impact on the report, as sharply lower purchases of gasoline offset increased sales of other retail goods. Online retailers as well as stores that sell appliances, building materials, clothing, electronics, home furnishings, leisurely goods, meals and liquor, over-the-counter medicine and personal-care and sports products all experienced a rise in sales. As the cost of fuel dropped again in November, sales fell 4.0% at gas stations which was a good not for consumers. During November, retail sales jumped a solid 0.7%, excluding gas and autos. Over the past 12 months, U.S. retail sales have risen 3.7%. Sales remained unrevised at a 0.3% decline during October, while the increase in September sales were revised down a notch to 1.2%.

The U.S. Commerce Department reported on Thursday that business inventories rose a seasonally adjusted 0.4% in October to $1.62 trillion. Business inventories are up 5.7% from October 2011 levels. Higher inventories can be good for the economy, if they represent firms stocking up in anticipation of future demand, but they can also reflect items not sold.