It was yet another mixed day that saw both positive and negative economic data attempting to pull the broad-based S&P 500 (SNPINDEX:^GSPC) in opposite directions.
In the plus column, the U.S. jobs report showed that the economy added 146,000 jobs last month, despite the effects of Superstorm Sandy, and the unemployment rate fell to 7.7%, its lowest level in four years. Unfortunately, it wasn't strong job creation, but a surge in people falling out of the labor force calculation, that spurred a 20 basis point drop in the unemployment rate.
On the downside, consumer confidence has taken a deep plunge on concerns that the inability of both political parties to come together and work out a new tax reform plan will push us over the fiscal cliff and into another recession. In early December, the preliminary consumer sentiment figure compiled by the University of Michigan fell to just 74.5, from 82.7 in November.
All told, this battle wound up moving in favor of the bulls today, with the S&P 500 trudging its way higher by 4.13 points (0.29%), to end at 1,418.07.
In a surprise move, beauty products supplier Avon Products (NYSE:AVP) led to the upside, rising by 5.3%, after rumors re-emerged that privately held Coty may make another takeover bid for the company. Coty unsuccessfully bid on Avon earlier this year and was denied twice, despite upping its bid to as high as $24.75 per share. With Avon trading more than $10 below the deal offer price, a re-emergence of a bid from Coty would probably be a welcome sight!
Information services provider McGraw-Hill (NYSE:SPGI) also enjoyed a nice day, up 4.2%, after announcing that, instead of repurchasing $200 million worth of its own shares, it would pay out a $2.50 special dividend. The trend of corporations pushing forward special dividend payments prior to the United States' fall off the fiscal cliff is a welcome sign for investors, who'll enjoy lower tax rates on those payments.
Pushing the S&P 500 from the other end was discount retailer Big Lots (NYSE:BIG), which disclosed that its outgoing CEO, Steven Fishman, is having his stock trades investigated by federal regulators. Specifically, the FBI and federal prosecutors are looking into whether Fishman sold $10.3 million worth of stock in March, with insider knowledge of negative events that were about to ensue. Needless to say, this was the last thing that Big Lots needed, as its stock shed 5.7%.
Tech giant Apple (NASDAQ:AAPL) also added a 2.6% loss to log its worst one-week percentage loss in two years. An admitted flub with Apple's new in-house Maps app, as well as uncertainties surrounding the potential for the iPad Mini to cannibalize sales from the higher margin iPad, have investors worried that Apple's growth rate may slow dramatically next year. Personally, I see these fears as overblown and continue to see incredible value in Apple shares at these levels.
Time to take a bite