In the U.S.: Futures flat as volatile year nears end

30 December 2011

An already shortened day of trading to be accompanied by moderate activity. Optimism at year end tempered by uncertainty of Europe.

Stock index futures were little changed on Friday, the last trading day of 2011, as investors waited until the next year to begin making large bets.

With the S&P 500 on track for a slight gain for the year, many market participants will likely stay on the sidelines on what is typically one of the lowest-volume sessions for the year.

Equities may continue a trend followed for much of 2011, taking a cue from European markets. Mixed results from a recent auction for Italian bonds reignited worries about the region’s debt crisis. European shares were 0.1 percent higher on Friday, on track for their worst year since 2008. .EU

Volume this week has been about half the year’s daily average, with many traders away because of the Christmas and New Year’s holidays. The anemic action has amplified moves in both directions.

Telecommunications shares may be in focus after Verizon Wireless, a venture of Verizon Communications Inc (VZ.N: Quote, Profile, Research, Stock Buzz) and Vodafone Group Plc (VOD.L: Quote, Profile, Research, Stock Buzz), said it will add a $2 fee for one-time bill payments, raising the ire of consumers.

The only economic indicator on tap is the December ISM New York index, due at 8:30 a.m. EST (1330 GMT)

S&P 500 futures rose 2.4 points and were about even with fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures rose 7 points, and Nasdaq 100 futures rose 2.5 points.

Global markets have been battered this year by Europe’s debt crisis, upheaval in the Middle East, a devastating Japanese earthquake and tsunami as well as a struggling U.S. economy. The S&P is up 0.4 percent, while the Dow has gained 6.2 percent as investors sought safety in large-cap dividend -paying names. The Nasdaq is down 1.5 percent.

Volatility was high throughout the year, with the S&P climbing 9 percent at its peak, and dropping 14.5 percent to its bottom. The CBOE Volatility index is up about 28 percent this year.

Financials were the weakest sector as the concerns about global growth threw into doubt the group’s ability to grow profits. Bank of America Corp (BAC.N: Quote, Profile, Research, Stock Buzz) was the Dow’s worst performer, tumbling 59 percent. JPMorgan Chase & Co (JPM.N:Quote, Profile, Research, Stock Buzz) slumped 21 percent.

Cabot Oil & Gas Corp (COG.N: Quote, Profile, Research, Stock Buzz) was the only S&P component to double in 2011, up 103 percent, followed by another energy name, El Paso Corp (EP.N: Quote, Profile, Research, Stock Buzz), which rose 92 percent.

McDonald’s Corp (MCD.N: Quote, Profile, Research, Stock Buzz) advanced 31 percent, the biggest gainer on the Dow.

U.S. stocks rallied 1 percent on Thursday, moving the S&P 500 back into positive territory for the year on positive signals on the U.S. economy, including strong data on home sales and Midwest factory activity.


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