FKLI Related News (Mon, Dec 17)

U.S. stocks had their first weekly decline in a month as budget talks dragged on, overshadowing the Federal Reserve’s plan to expand bond purchases and better-than- estimated economic data. Consumer companies fell the most among 10 groups in the Standard & Poor’s 500 Index.  The S&P 500 fell 0.3 percent to 1,413.58, snapping a three- week gain. The Dow Jones Industrial Average declined 20.12 points, or 0.2 percent, to 13,135.01 for the week.

President Barack Obama and Republican House Speaker John Boehner remained deadlocked during their third White House meeting on next year’s budget. More than $600 billion in tax increases and spending cuts are scheduled to start taking effect in January unless Congress acts to avert them. Government reports showed retail sales and industrial production rebounded in November while jobless claims declined to a nine-week low. The Fed said it will buy $45 billion a month of Treasury securities starting in January to help boost growth, in addition to $40 billion a month of mortgage-debt purchases under a previous plan. Asset buying will continue until the labor market improve “substantially,” the central bank said.

Three rounds of bond purchases from the Fed have helped the S&P 500 (SPX) more than double from a 12-year low in 2009. While the benchmark gauge is up 12 percent this year, it’s fallen 1.9 percent this quarter, worse than any other developed market among 24 tracked by Bloomberg. “The fiscal cliff is creating value in equities as there is too much negativity priced in,” said Scott Minerd, chief investment officer of Guggenheim Partners LLC, who oversees more than $125 billion from Santa Monica, California. “I’m of the mindset that the fiscal cliff is a non-event.” Consumer-discretionary shares in the S&P 500 fell 1.2 percent for the week, the most among 10 industry groups.

Apple tumbled 4.4 percent to $509.79. Steven Milunovich, an analyst at UBS, cut his price estimate to $700 from $780, citing concern that growth may slow for the iPhone and iPad. Based on checks with Apple’s suppliers, Milunovich said that the company is starting to curb production of the iPhone. Peter Misek at Jefferies trimmed his forecast to $800 from $900. An S&P 500 index of steelmakers rallied 7 percent for the biggest weekly gain since September as data from China showed factory output and retail sales beat economists’ estimates while manufacturing may expand at a faster pace.           [Bloomberg]

FKLI opened slightly lower this morning at 1,650 after reaching a high of 1,657.50 last week. Today’s Support and Resistance for December contract is located around 1,640 and 1,655 respectively.