MarketView for November 21

Summary 

The major equity indexes were modestly higher on Wednesday, with the S&P 500 up for a fourth session, although volume was one of the year's lowest on the day ahead of the Thanksgiving holiday. Nonetheless, the Street welcomed, as did everyone, the news that a ceasefire was declared to end the flare-up in violence between Israel and the Palestinians. A truce between Israel and Hamas gave stocks some support around midday after Egypt announced a ceasefire would come into effect later in the day.

At the same time, however, the lack of a deal to release emergency aid for Greece limited the market's advance. Greece's international lenders failed again to reach a deal to release emergency aid to the debt-saddled country. Lenders will try again next Monday, but Germany signaled that significant divisions remain.

There was also the continuing anxiety over the mandatory tax increases and spending cuts that would go into effect in the new year if a deal is not reached to prevent it - known as the "fiscal cliff" - though policymakers are not expected to get back to negotiations until after Thursday's Thanksgiving holiday.

Fears that the fiscal cliff discussions in Washington could be drawn out or yield no resolution have been at the forefront of investors' minds in recent weeks. Combined with concerns about the euro zone's continued debt problems, the worries had driven a sell-off that has taken more than 5 percent off the S&P 500 since Election Day in early November. Positive comments from Washington that it will find common ground have helped the S&P 500 recoup some of its recent losses.

St Jude Medical saw its share price fall 12.2 percent to $31.37 after an inspection report from health regulators raised new safety concerns about one of the company's leads that are used with implantable defibrillators.

A modest gain by IBM helped the Dow outperform the other indexes. IBM rose 0.6 percent to $190.29.

Hewlett-Packard rose 2 percent to close on Wednesday at $11.94, recouping a small slice of Tuesday's loss, when the stock slid to a 10-year low after the computer and printer maker reported a $5 billion charge related to "accounting improprieties" at Autonomy, a British software company that HP bought last year. At least two brokerages have cut their ratings on HP's stock, while analysts at several firms lowered their price targets.

Salesforce.com was up 8.8 percent to $158.78 a day after the business software provider reported results that exceeded Street expectations for the third quarter and maintained its outlook for the rest of the year.

Meanwhile, Deere hurt the S&P 500 after the world's largest farm equipment maker reported a weaker-than-expected quarterly profit. Its shares ended the day down 3.7 percent to $82.83.

The market did not derive much direction from the day's economic data, with initial jobless claims falling last week, as expected.

Other data showed manufacturing picked up at its quickest pace in five months in November, while the Thomson Reuters/University of Michigan's final reading for November showed the consumer sentiment index improved only slightly from the previous month.

The focus on consumer spending will turn to retailers on Friday in an effort to ascertain how strong the holiday shopping season will be this year. Holiday shopping traditionally kicks off the day after Thanksgiving, known as Black Friday, as stores offer deals and discounts to lure consumers.

About 4.76 billion shares changed hands on the three major equity exchanges, as compared with the year-to-date daily average volume of 6.5 billion shares. On Thursday, the U.S. stock market will be closed for the Thanksgiving holiday, and on Friday, it will close early at 1 p.m.