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Global Market Wrap-Up - November 20, 2012

Tuesday, November 20, 2012
By: 
Mark Hanna
U.S. stocks finished with minor gains Tuesday in light trading as markets absorbed the large gain Monday. Markets were hit mid day by comments from Ben Bernanke but recovered by the end of the day. The S&P 500 gained 0.07% and the NASDAQ 0.02%. Hewlett-Packard plunged 12% after executives said that a company HP bought for $10 billion last year lied about its finances. CEO Meg Whitman said that there were "serious accounting improprieties" at the search-engine company, Autonomy. To account for it, HP took an $5 billion charge in its latest quarter.

The market reaction was mostly to this comment from Bernanke:
  • When asked during a question and answer session after the speech whether the Fed could soften the impact of the fiscal cliff, Bernanke was firm in his warning. "In the worst-case scenario where the economy goes off the broad fiscal cliff ... I don't think the Fed has the tools to offset that," Bernanke said.
In economic news:
  • Housing starts hit 894,000 (annualized) in October, over 50,000 more than the analysts forecast. Housing starts are now at their highest level since July 2008. The October numbers were driven entirely by multifamily apartment starts, up 10 percent month-to-month and up 63 percent year over year. "Housing starts at 894,000 is near where they were at the depths of the 1981 and 1991 recessions and 60 percent below the peak in January 2006," pointed out Peter Boockvar at Miller Tabak.
Crude oil was down $2.53, or 2.8%, to $86.75 per barrel. Gold fell $10.80 to $1,723.60 an ounce while silver dropped $0.26 to $32.93.

Britain's FTSE 100 added 0.2%, while the DAX in Germany and the CAC 40 in France rose 0.7%.

The Shanghai Composite lost 0.4% and Japan's Nikkei edged 0.1% lower.