Apparently, that's all it takes: As Congressional leaders voice optimism on averting the fiscal cliff, Mr. Market gets his mojo back and stocks begin to post gains for the day, with the Dow Jones Industrial Average (INDEX: ^DJI ) and the broader S&P 500 (INDEX: ^GSPC ) up 0.2% and 0.3%, respectively, as of 1:30 p.m. EST. That's my hypothesis, or post hoc ergo propter hoc fallacy, anyway.
The micro view
Hewlett-Packard (NYSE: HPQ ) shares are down 2.9% so far today. As I pointed out in this column this morning, I believe the stock's decline is related to the disappointing results Dell reported after the market's closed yesterday. Historically, there is a high correlation between the two companies' earnings per share. HP reports results for its fiscal quarter ended Oct. 31 next Tuesday.
Verizon (NYSE: VZ ) and AT&T (NYSE: T ) are both losers today, with no identifiable news or fundamental drivers to explain the losses. In fact, the entire telecom services sector is lagging the market. This may be related to a rebalancing out of dividend stocks due to concerns over the potential expiration of the 15% tax rate on dividends next year (part of the "fiscal cliff"). As the following chart shows, dividend stocks, which have won investors' favor in the post-crisis, zero-interest-rate environment, have underperformed the market over the past month:
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