Friday, November 16, 2012
U.S. stocks finally rebounded a bit as some positive comments from Reid and Boehner regarding the fiscal cliff helped drive markets off extremely oversold levels. The S&P 500 gained 0.5% and NASDAQ 0.6%. For the week the S&P 500 fell 1.5% and the NASDAQ 1.8%.
- House Speaker John Boehner called the meeting "very constructive," noting that he outlined a framework that includes revenue and is "consistent with the president's fair and balanced approach." "To show our seriousness, we've put (tax) revenue on the table, as long as it's accompanied by significant spending cuts," Boehner said. Senate Majority Leader Harry Reid said that he felt "very good" about the talks and believes that they now have "the cornerstones of being able to work something out."
In economic news:
- The Fed says industrial output fell 0.4%last month, after a 0.2 percent gain in September. Excluding the storm's impact, production at the nation's factories, mines and utilities would have been up about 0.6%.
Also out was news that FHA likely will need to tap taxpayer money as it runs out of funds; considering the agency need not ask Congress for funds and has potentially an unlimited amount it can request, that is scary:
- The Federal Housing Administration has exhausted its reserves, forcing it to institute another round of measures to shore up its finances. The government agency's capital cushion plummeted to -$16.3 billion at the end of fiscal 2012, according to a study prepared annually by an independent actuary.
- FHA's continued financial troubles may force it to ask taxpayers to bail it out for the first time in its 78-year history. This specter has haunted the agency since 2009, when it first reported that its reserves fell below the threshold of 2% of its loan balances mandated by Congress. The ratio now stands at -1.44%, down from 0.24% last year.
Oil rose $1.22 to settle at $86.67 a barrel while gold added 90 cents to settle at $1,714.70 an ounce. Silver fell $0.304 to $32.37.
European markets closed before the reversal in the U.S. Britain's FTSE 100 and the DAX in Germany fell 1.3% and France's CAC 40 slipped 1.2%.
The Shanghai Composite lost 0.8% while Japan's Nikkei rose 2.2%.