Trio of Economic Data Weigh On Early Trading

The market is lower in the first hour of trading, although unlike yesterday, the Nasdaq is bucking the broad weakness and trading nicely higher.

In economic news, new home sales fell -5.3% in October to the lowest level since 1991. The bottom in the housing market remains elusive, but the pace of declines does appear to be slowing. I think that the many policy initiatives by the Administration should speed up the recovery.

Durable goods fell -6.2% in October, a huge decline. And personal spending fell -1.0% in October, a 7-year low. The large decline in consumer spending sets a negative tone for Q4 GDP, which is expected to show its largest decline in decades.

In corporate news, Tiffany (TIF) and Deere (DE) both gave disappointing outlooks. DE stock is taking the news harder, although both stocks are lower.

In overseas news, Asian markets were mixed overnight. China cut its benchmark rate 1.08% to 5.58% (where do they get these numbers?), and Europe is considering a 200 billion euro fiscal stimulus package.

Also, Toyota Motor (TM) had its AAA credit rating cut at Fitch, with a negative outlook, as Fitch worries about the negative developments in the auto industry. TM still has a AAA rating at S&P, which it has had since 1985.

The dollar is higher this morning, and commodities are mixed. Oil is a bit higher, which is helping many of the energy stocks. The 10-year yield has plummeted all the way down to 3.00%. I'll have to look for the last time it was that low, but let's just say it was well before I was born.

The VIX is also -3% lower again, hitting 59.0. 50-day support comes into play around 57.50, so we are getting close.

Tech stocks are leading the early action, but retail stocks are higher also. Go figure. Bank stocks are mostly lower, as are drugs and consumer staples.