US stocks could sputter with Black Friday eyed

NEW YORK: U.S. stocks could sputter in the new week starting Monday, Nov 23 as volumes dry up in holiday-shortened trading and with a slew of economic reports likely to illustrate the recovery is still fragile, according to Reuters.

Investors will also get a glimpse of how holiday shopping could shape up with Black Friday, which traditionally marks the start of the season as retailers slash prices to tempt shoppers. It will be difficult for the economic recovery to make much headway without a pick-up in consumer spending as it accounts for two-thirds of the economy.

A raft of data is squeezed into the first half of the week, shortened by Thursday's Thanksgiving holiday. The delicate nature of the recovery has analysts split on whether the economy will advance from here or still faces another leg down.

The debate has plagued the rally throughout its run but now that the S&P 500 is up more than 60 percent from March's 12-year lows, investors are more wary of taking risks. With just six trading weeks left in the year, market watchers are keen to hold onto profits.

"There's simply more risk where we are," said Lawrence Creatura, equity market strategist and portfolio manager at Federated Clover Capital Advisors, in Rochester, New York.

"We're at a higher altitude and even though in some ways it doesn't feel like it, it's less safe now than it was in March."

Data has largely shown an economy that is recovering slowly but is still weak, particularly in areas like employment. Reports include home sales, consumer confidence, durable goods and the second reading of gross domestic product.

As well, the Federal Open Market Committee will release the minutes from November's rate-setting meeting. Investors will be looking for insight as to how the central bank will eventually start to remove its extraordinary stimulus measures and its view on the health of the economy.

The Dow and S&P 500 made 13-month highs this week before easing off, and recent sessions suggest the market is struggling to justify more gains.

For the week, the Dow rose 0.5 percent, the S&P 500 fell 0.2 percent and the Nasdaq shed 1 percent. The S&P failed to hold above the key 1,100 level and will continue to face resistance there.

Volume is expected to be light throughout the week with U.S. markets closed on Thursday for Thanksgiving and shutting early on Friday. Low volume can make stocks more volatile as fewer participants make it easier to move prices.

Black Friday, the day after Thanksgiving, will be watched closely with analysts anxious for signs consumers will be opening up their wallets.

The phrase Black Friday is used by retailers to refer to the start of the holiday period when their business moves into the black, or turns a profit.

Early data on shopper traffic and anecdotal evidence will give the first snapshot of the day's performance and a clearer picture will emerge the following week when stores report November retail sales.