Why This Stock Is Fighting Today's Market Malaise

The Dow is relatively unchanged this morning following some positive U.S. economic releases but no new news about the fiscal cliff. As of 1:25 p.m. EST, the Dow Jones Industrial Average (DJINDICES: ^DJI  ) is at breakeven, while the S&P 500 (SNPINDEX: ^GSPC  ) is up less than a point.

This morning there were five U.S. economic releases:





New unemployment claims

Dec. 8 to Dec. 15



GDP growth




Existing-home sales


5.04 million

4.76 million

Conference Board Leading Economic Index




FHFA Home Price Index




Source: Marketwatch U.S. Economic Calendar.

This morning the U.S. Department of Labor said new unemployment claims rose 17,000 to a seasonally adjusted 361,000. This was in line with the expected claims of 360,000. The four-week average is 368,000.

US Initial Claims for Unemployment Insurance Chart

US Initial Claims for Unemployment Insurance data by YCharts.

The next economic release came from the Department of Commerce, which released its second and final revision of third-quarter GDP growth, which came in at 3.1% -- higher than analyst expectations of 2.9%, the previous estimate of 2.7%, and the initial estimate of 2%. Revisions in personal consumption, exports, and government spending all combined to boost the third-quarter GDP figures.

Later, the National Association of Realtors reported that existing-home sales rose 5.9% in November to an annualized 5.04 million. That's better than October's 4.76 million and analyst expectations of 4.9 million. It's also the highest level since November 2009, when the pending expiration of the home buyer tax credit spurred a rush of sales. In the past few months, we have seen a steadily improving housing market, and this highlights that trend.

US Existing Home Sales Chart

US Existing Home Sales data by YCharts.

Also in housing news, the Federal Housing Finance Agency reported that housing prices rose a seasonally adjusted 0.5% in October, outpacing September, when prices were unchanged.

The final economic release was the Conference Board's Leading Economic Index, which was down 0.2%, in line with analysts' expectations of a 0.2% drop. The index is made up of 10 indicators and is designed to signal peaks and troughs in the business cycle. The fourth quarter is expected to be slower than the third quarter as businesses hold off on spending until the fate of the fiscal cliff is known.

In fiscal-cliff news, there really is no new news to report. Two days ago House Speaker John Boehner proposed a "plan B" option to fall back on in case talks fail. The White House immediately rejected the plan, and yesterday it reiterated its rejection, as it would rather force Congress to come up with a compromise than allow the can to be kicked down the road. From the outside, talks appear to be stalled, but it's hard to know what's really going on. The Motley Fool has created a special page that will be updated with all of our latest fiscal-cliff coverage to help cut through the daily noise and give you the information and analysis you need as an investor. Head on over for everything you need to know about fiscal cliff 2012.

With positive news about the economy but no news about the fiscal cliff negotiations, the market is unchanged.

Today's Dow leader
Today's Dow leader is Bank of America (NYSE: BAC  ) , up 2.1%. Banks' financial results are highly dependent on the health of the economy, so financial stocks are up on the great housing numbers. Banks have been doing well this year. Fool analyst John Maxfield recently compiled five charts from the FDIC's Quarterly Banking Profile, which shows how the industry is recovering.

Bank of America has had a huge year in 2012. The bank's stock has soared 105% so far in 2012 as the bank has settled with 49 states over the robo-signing fiasco, estimated its future liabilities to Fannie Mae and Freddie Mac, divested noncore operations, and significantly improved its financial situation. More recently, the stock has been rising as the U.S. housing market continues to improve. Some investors believe the banking industry has turned the corner. Well-known banking analyst Meredith Whitney recently called out Bank of America as well as Citigroup (NYSE: C  ) and Discover Financial (NYSE: DFS  ) big investment opportunities.

To learn more about the most talked-about bank out there, check out our in-depth company report on Bank of America. The report details Bank of America's prospects, including three reasons to buy and three reasons to sell. Just click here to get access.

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Dan Dzombak

Dan Dzombak has written for The Motley Fool since 2008. He covers value investing, investing process, and success among other things. You can follow him on Facebook or Twitter by clicking the buttons below or head over to his blog at

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