MarketView for November 27

Summary

The major equity indexes moved lower on Tuesday in a choppy session, losing ground in the last hour before the close after Senate Majority Leader Harry Reid expressed disappointment that there has been "little progress" in dealing with the "fiscal cliff." Although the indexes were relatively flat for most of the session they took a dive downward after Reid's comments, a signal that investors remain skittish whether Congress and the White House can agree on ways to avoid some $600 billion in automatic spending cuts and tax increases that are due to kick in early next year.

As budget talks linger, Las Vegas Sands and Supertex added their names to a growing list of companies announcing special dividends aimed at helping investors avoid a possibly higher tax burden next year. Higher dividend and capital gains taxes are part of the negotiations in Washington and may rise even if a deal is crafted. Las Vegas Sands jumped 5.3 percent to $46.36. Supertex rose 6.9 percent to $18.

The S&P 500's modest losses on Tuesday marked its worst day in eight sessions - indicating traders are unwilling to sell aggressively as a deal probably would trigger a rally. The benchmark S&P 500 once again closed below 1,400, a key psychological level that it had reclaimed last week as it rose nearly 4 percent. The VIX was up 2.7 percent to 15.92 at the close.

Dealings in Washington obscured strong economic figures, including an increase in planned business spending and consumer confidence hitting its highest level in more than four years. Strengthening the case for a sustained rebound in housing, single-family home prices rose for an eighth straight month in September. Shares of M/I Homes gained 2.1 percent to close at $22.36, while KB Home ended the day up 1.1 percent to close at $14.61.

In another good sign for consumer demand, Corning saw its shares rise 6.9 percent to $12.13 after the company said it expects full-year sales of its Gorilla glass, used in smartphones and tablets, to approach $1 billion.

Ralcorp Holdings rose 26.4 percent to end the day at $88.80 after long-time suitor ConAgra Foods sealed a deal to buy it for $5 billion. ConAgra shares were up 4.7 percent to end the day at $29.63. McMoRan Exploration fell 15.2 percent to $8.18 a day after the oil and gas driller gave a disappointing update on a key gas prospect in a Gulf of Mexico well.

About 5.9 billion shares changed hands on the major equity exchanges, a number that was well below the daily average so far this year of about 6.5 billion shares.