MarketView for December 30

Summary

There was very little energy on Wall Street on Monday, with the Dow Jones Industrial Average edging up to another record closing high and the S&P 500 index's advance stalling in response to light trading volume and weaker-than-forecast housing data.

The S&P 500 is up 29.1 percent this year and is on track for its best year since 1997, due in no small part to the Fed's stimulus measures. The Dow is up 25.9 percent and the Nasdaq 37.6 percent.

Trading was in an unusually narrow range on Monday, with the S&P 500 moving only 3.7 points between its high and low over the session, marking its tightest trading range since December 2010. The Dow, meanwhile, moved just 27.5 points, marking its narrowest trading range since February 2007.

The National Association of Realtors said its pending home sales index, based on contracts signed last month, rose 0.2 percent in November, below expectations of a 1 percent rise.

Twitter was among day’s the most actively traded as it continued its share price decline on Monday, falling 5.1 percent to close at $60.51. Monday's fall followed a 13 percent slide on Friday from its all-time closing high of $73.31, reached this past Thursday. Not to be totally outdone, Facebook was the S&P 500's second-worst performer. The stock ended the day down 3.12 percent to close at $53.71.

Disney gained 2.5 percent to close at $76.23 and ranked as the best performer in both the Dow and the S&P 500 after Guggenheim raised its rating on the media conglomerate's stock to "buy" from "neutral" and raised its target price to $87.

Cooper Tire & Rubber ended the day up 5.4 percent to close at $24.20  after the company reported that it was not going ahead with a $2.5 billion merger with India's Apollo Tyres.

Shares of Crocs closed up 21.1 percent at $16.14 following news that the Blackstone Group was investing $200 million for a 13 percent stake in the company.

Trina Solar ended the day with a gain of 6.5 percent, closing at $14.01 after the company signed an agreement to develop a solar power plant in China.

Volume continued to be light during the holiday season, with about 4 billion shares changing hands on the major equity exchanges, a number that was below the 6 billion share average so far this month, according to data from BATS Global Markets.

The markets will be closed on Wednesday for New Year's Day.

Pending Home Sales Higher

The number of contracts to purchase previously owned homes increased during November, resulting in the first increase in six months and thereby adding some support to the theory that the sector has begun to stabilize after its momentum was dealt a substantial blow from rising mortgage rates.

The National Association of Realtors reported on Monday that its Pending Home Sales Index, based on contracts signed last month, rose 0.2 percent from October, to 101.7. Nonetheless, overall contracts were still 1.6 percent below last November's levels.

Housing sales had been dampened by a rise in mortgage rates, which began to climb earlier this year as investors bet the Federal Reserve would start to reduce the stimulus it provides the U.S. economy.

The rise in borrowing costs helped push home re-sales down in November to their lowest level in nearly a year, but other recent indications of the sector's health have improved. Housing starts rose in November to their highest level in six years and sales of new homes were only slightly lower following a large rise during this past October.

Along with the latest reading on pending home sales, the data provided an encouraging sign that housing was adjusting to mortgage rates that have advanced by more than a percentage point since May, to almost 4.5 percent.