The stock market began 2015 on a cautious note with the major averages surrendering their opening gains. The S&P 500 ended flat while the Dow Jones Industrial Average (+0.1%) settled just above its flat line.
Equity indices started the day with broad-based gains, but the early buying spree ended in a flash. The S&P 500 marked its high 11 minutes after the start of the session before reversing course. The index continued its retreat through the 9:00 ET release of disappointing Construction Spending and ISM reports, and marked its session low shortly after 13:30 ET.
The S&P 500 tried to fight its way back into the green during the afternoon, but losses among influential sectors like consumer discretionary (-0.7%), consumer staples (-0.4%), industrials (-0.2%), and technology (-0.2%) proved too large to overcome.
Notably, the discretionary sector suffered from broad weakness. Homebuilders and retailers lagged with iShares Dow Jones US Home Construction ETF (ITB 25.67, -0.21) and SPDR S&P Retail ETF (XRT 95.34, -0.67) falling 0.8% and 0.7%, respectively. The two groups helped the sector finish at the bottom of the leaderboard.
Elsewhere, industrials contributed to the persistent pressure as transport stocks underperformed. The Dow Jones Transportation Average lost 0.5% with all but five components ending in the red. Shipper Kirby (KEX 81.53, +0.79) outperformed while freight carrier CH Robinson (CHRW 73.84, -1.05) brought up the rear.
Similar to industrials, the technology sector kept the market under pressure during the afternoon. Large cap listings settled in mixed fashion, but Apple (AAPL 109.33, -1.05) fell 1.0%, which contributed to the underperformance of the Nasdaq Composite. However, chipmakers lagged early, but climbed into the afternoon, allowing the PHLX Semiconductor Index to end flat.
On the upside, the utilities sector (+0.6%) ended in the lead, but more notable was the outperformance of health care (+0.4%). The countercyclical group benefitted from daylong strength in biotechnology that sent the iShares Nasdaq Biotechnology ETF (IBB 306.34, +2.99) higher by 1.0%.
Also of note, the energy sector (+0.4%) ended in the green even as crude oil continued its retreat, dropping 1.6% to $52.57/bbl. Greenback strength factored into the move as the Dollar Index jumped 0.9% to 91.12. The dollar picked up about 1.5% against the British pound and 1.0% against the euro, with the latter sliding after a Financial Times op-ed penned by Mario Draghi was viewed as a preamble to a sovereign QE announcement from the European Central Bank.
Treasuries registered solid gains after erasing their overnight losses. The benchmark 10-yr yield fell five basis points to 2.12%.
Participation was in-line with recent totals as 628 million shares changed hands at the NYSE floor.
Economic data was limited to Construction Spending and ISM:Monday's session will be free of economic data.
- Construction spending in November declined 0.3% from October, which was revised up to show an increase of 1.2% versus 1.1% previously
- The November reading was below the consensus estimate, which called for a 0.1% increase
- The disappointment was rooted in public construction spending, which declined 1.7% to a seasonally adjusted annual rate of $277.30 billion largely due to a 2.5% pullback in educational construction spending
- The ISM Index for December checked in at 55.5, down 3.2 percentage points from the high 58.7 reading in November
- The December reading marked the 19th consecutive month of expansion; however, it was weaker than the consensus estimate, which was pegged at 57.5
- A number above 50 denotes expansion, so the pullback in December doesn't connote weakness so much as it connotes the manufacturing sector cooling down from a very hot November
- Dow Jones Industrial Average +0.1% YTD
- S&P 500 UNCH YTD
- Nasdaq -0.2% YTD
- Russell 2000 -0.6% YTD
**Syriza MP-Mr Tolios- comments on Grk debt default & borrowing from depositors**
{http://www.euro2day.gr/news/economy/article/1289897/tolios-hrhmatodothsh-me-entoka-poy-tha-agorazoyn-m.html}
During the wknd Greek media were busy reproducing the interview of a Syriza MP- Mr Tolios- who said that "if needed Greece will stop paying interest on its debt for a period of time"
Even PM Samaras responded to this by saying "such a proposal clearly guarantees the impoverishment of the nation..and that the public should know by now what Syriza stands for..it is unbelievable!!"
After such publicity Mr Tolios "attacked again" saying that all his comments originate from Syriza's official pre-election policies in May14 which explicitly say that .." debt repayment will be linked to GDP recovery and social factors and will take place after a period during which no interest/capital repayments will be made"
Trying to smooth his comments he said that even Syriza leader-Tsipras- said that Greece will not take any unilateral action unless is forced to.. ..but when asked how Syriza will find financing when markets are shut, Mr Tolios said that there is no need for T Bills to be bought by foreigners, as Greek gov may borrow from Greek depositor....
which allowed ND to come out and say that Syriza will not only default on the debt but will also borrow money from Greek depositors every 2 weeks..
Oil/gas related names showing early weakness (LINE / LNCO also weighing on select E&P names): LNCO -8.9% / LINE -7.2% (announces 2015 oil and gas capital budget; reduces annual distribution to $1.25 per unit from the previous level of $2.90; approves 2015 CapEx budget of $730 mln, down 53% y/y), BBEP -2.9%, STO -2.3%, SWN -2.2%, SDRL -2%, DVN -2%, SSL-1.5%, FI -1% (downgraded to Neutral from Buy at UBS ), FTI -1% (downgraded to Neutral from Buy at UBS ), BP -0.8%, RDS.A -0.8%.
Select Biotech/pharma names are modestly lower: PRGO -1.2%, SNY -1.1%, SHPG -1%,
Brazil ADRs are trading lower: PT -4.7%, VIV -2.9%, BBD -2.8%, PBR -2.7%, ABEV -2.7%, ITUB -2.3%, CZZ -1.9%, BSBR -1.8%, ELP -1.8%, VALE -1.6%,
Other news: MDXG -9.8% (filed a federal lawsuit against Organogenesis), HNR -6.1% (announces termination of agreement to sell remaining interests in Venezuela as a result of the failure to obtain approval of the transaction from the Government of the Bolivarian Republic of Venezuela by December 31, 2014), TGTX -5.4% ( files for $250 mln mixed securities shelf offering), NRX -3.4% (following 180%+ move on Wed), RYAAY -1.5% (disclosed it issued share capital that consists of ~1.387 mln ordinary shares of nominal value EUR 0.00635 each with voting rights), ABX -0.9% (reports that the Supreme Court of Chile has declined to consider an appeal of a lower court decision regarding sanctions imposed on the Pascua-Lama project), ARMH -0.9% and UL -0.8% (still checking).
Analyst comments: VIVO -1.6% (downgraded to Underperform from Mkt Perform at Raymond James), SWIR -0.5% (downgraded to Market Perform from Outperform at Northland Capital)


I fully expect this to be the stupidest thing ever, on par with the Prada phone, and this shows exactly what companies like Montblanc are up against. Wearables are replacing some watches and the Apple Watch will replace the rest. I expect that the mechanical watch manufacturers will soon be facing a massive slowdown at best and bankruptcy at worst.
A few Euro financial related names showing modest strength: CS +3.7%, BBVA +2%, DB +1.4%, LYG +1.3%, ING +1.2%.
A few India ADRs are trading higher: SSLT +3.8%, IBN +3%, TTM +2.4% (discloses Dec sales update - total sales of commercial and passenger vehicles in December 2014 of 41,734 vehicles, an increase of 10% y/y )
Other news: SGOC +52.5% (announces sale of SGOCO (Fujian) Electonic Co to Apex Flourish Group), BCLI +19.7% (continued strength ahead of the release of final results from its phase 2a clinical trial of NurOwn in ALS on Monday, January 5), ARWR +8.4% (still checking; name is frequently the target of M&A speculation), CLF +5.3% ( concludes the sale of Logan County Coal and provides update on Bloom Lake; confirms that active production at Bloom Lake has completely ceased and the exit from Eastern Canada continued to be executed on schedule as previously announced ), VA +1.7% (positive analyst comments on CNBC this morning), NDRM +1.5% (continued strength), NOK +1.4% (still checking; co provided Stock Option Plan update), NXST +1.3% (Nexstar announced that it reached a new distribution agreement with Charter), CVEO +1.2% (JANA Partners closes stake in Civeo; JANA had an 11.5% stake as of October 24, 2014), CNC +1.1% (disclosed that its Superior HealthPlan subsidiary signed an agreement with the Texas Health and Human Services Commission providing for reimbursement of the Affordable Care Act annual Health Insurer Fee and related tax gross-up), GM +0.8% ( redeems all outstanding series a preferred shares), AAPL +0.7% (higher despite Business Insider detailing negative review on Apple Watch ), TWTR +0.7% and FB +0.7% (social network peers Snapchat valued at ~$10 bln), AA +0.7% (still checking), AMZN +0.7% (Times of India discusses that Amazon may introduce Prime service in country), IBM +0.2% (positive mention on FastMoney)
Analyst comments: BBBY +1.2% (upgraded to Buy from Hold at Canaccord Genuity), KITE +0.3% ( target raised to $71 from $34, maintain Outperform at Credit Suisse)