Trade the News Market Internals Update at 12:00ET

Dow +59 S&P +7 NASDAQ -1 

***Economic data***

– (SP) Spain Oct YTD Budget Balance: -€40.1B v -€37.0B prior-
– (CL) Chile Oct Industrial Production Y/Y: -0.8% v +4.1%e; Industrial Sales Y/Y: -0.6% v +2.0%e
– (CL) Chile Oct Total Copper Production: 466.8K v 436.7K tons
– (CL) Chile Oct Retail Sales Y/Y: 8.6% v 8.7%e
– (US) ICSC/GS weekly chain store sales w/e Nov 26th: +1.7% w/w; +4.0% y/y
– (HU) Hungary Central Bank raises the Base Rate by 50bps to 6.50%; as expected
– (CA) Canada Q3 Current Account (BOP): -$12.1B v -$11.1Be
– (US) Weeky Redbook Retail Sales

-US equities made some modest gains this morning after the open of trade, helped by some positive economic data. The November Consumer Confidence reading was much better than expected, with the expectations component looking especially strong. This comes after a very strong opening to the US holiday shopping season. In Europe, finance ministers are meeting under the auspices of the Eurogroup, following the reports that the EFSF leverage may be much lower than expected. Initial commentary has made it clear yet again nothing new has been agreed upon yet, with the German/Dutch camp still opposing much of what periphery members are trying to pull the negotiations toward. WTI crude futures are near yesterday’s highs, briefly trading just shy of the $100 mark. US Treasury prices are modestly lower which has brought the 10-year yield back above 2%.

– In the equity story of the morning, American Airline parent AMR filed for Chapter 11 this morning in New York, making it the last major US carrier to undertake restructuring under the protection of bankruptcy in the last ten years. Recall that UAL did it in 2002, and Delta and Northwest both undertook this process back in 2005. AMR indicated that it has around $4.1B in cash and short-term investments, which will be more than sufficient to pay for operations and forestall the need for DIP financing. New CEO Thomas Horton said that the move was needed so that AMR could address its cost structure and labor costs. “Our very substantial cost disadvantage compared to our larger competitors, all of which restructured their costs and debt through Chapter 11, has become increasingly untenable,” he said.- In deal news, shares of Yahoo are up about 3% after the New York Times reported that a Silver Lake and Microsoft consortium was looking to acquire a minority stake in the company. There has been repeated press speculation about both of these names acquiring stakes in Yahoo in recent weeks. In addition, AOL’s CEO said the company is not currently interested in acquiring Yahoo assets. In its quest to gain approval for its acquisition of T-Mobile, AT&T was reported to be in talks with Leap Wireless to sell a large part of T-Mobile’s customer accounts. In other news, shares of Corning are down more than 10% after lowering its Q4 Gorilla Glass sales forecast and warning that its Samsung Corning venture is not expected to reach its volume targets in Korea.

– The euro spiked higher and then came off its best levels against the major pairs in the aftermath of the European auction results earlier today. The spike in euro followed passable Italian results and talk that Greece’s next bailout tranche would be released shortly, plus some chatter that progress was being made on EFSF facility. But news that the ECB was unable to fully drain bond purchases swatted down the rally. The central bank drained only €194.2B of the €203.5B in bond purchases. Dealers guessed that the inability to sterilize results meant that the ECB has reached the limit of the bond purchases it can sterilize and might have to halt the program for the time being. Some dealers suspected that the central bank was now prepared to move toward quantitative easing. EUR/USD was hovering around 1.3320 by the mid-New York morning, off more than 100 pips from its best levels.

***Looking Ahead***

– 11:00 (EU) Euro-Area Finance Ministers (ecofin) meet in Brussels
– 11:00 (US) Fed to purchase $2.25-2.75B in Notes/Bonds
– 11:30 (US) Treasury to sell 4-Week Bills
– 12:15 (US) Fed’s Raskin
– 12:30 (US) Fed’s Lockhart to speak on U.S. Economy in Atlanta
– 16:30 (US) Fed’s Williams
– 16:30 (US) Weekly API Energy Inventory data
– 19:00 (US) Fed’s Kocherlakota speaks to Reporters in California
– 19:15 (CA Bank of Canada Dep Gov. Murray speaks in Plattsburgh, NY
– 19:30 (EU) Outgoing ECB member Stark speaks in Dallas, TX
– 20:00 (US) Fed’s Kocherlakota Speaks on Monetary Policy at Stanford
– (NV) Netherlands PM Rutte and Foreign Min Rosenthal meet US President Obama