What to Look For in the Markets Today

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Yesterday, all three major indices closed the day in the green. The Dow Jones Industrial Average (INDEX: ^DJI) was up 0.51%, the S&P (INDEX: ^GSPC) was up 0.83%, and the Nasdaq ended the day up 0.83%. Both the Dow and the S&P extended their win streak to three days, while the Nasdaq effectively erased its 0.99% loss from yesterday.

Some of yesterday's biggest movers include:

Company

Move

Bank of America (NYS: BAC) 4.6%
General Electric (NYS: GE) 3%
JPMorgan Chase (NYS: JPM) 3.5%
Wal-Mart(0.3%)
McDonald's(0.6%) 
Coca-Cola(0.6%) 

Looking toward today, the major economic events and reports that investors need to keep their eye on include:

  • Durable-goods orders.
  • Personal income and outlays.
  • New-home sales.

Durable goods
The Department of Commerce is releasing its durable-goods order figures at 8:30 a.m. ET today. Orders are considered a leading indicator of manufacturing activity. Lately, manufacturing has been a mixed bag. The Wall Street Journal recently reported that the U.S. was among a small number of countries to realize manufacturing gains in November.

Caterpillar (NYS: CAT) , meanwhile, recently saw slow growth in developed parts of the world but reaffirmed its 2011 forecast. Its 2012 predictions are upbeat, with the company expecting sales to grow 10%-20% through next year. The durable-goods order released today should help presage whether manufacturing's 2012 expectations are reasonable.

Personal income
The Bureau of Economic Analysis is releasing its personal-income figures this morning, also at 8:30 ET. These figures are largely composed of wages and salaries, and considering that new jobless claims for unemployment benefits dropped last week to their lowest level since 2008, people may be reading this as a boon.

One potentially affected company that I'll be watching today is Paychex (NAS: PAYX) , a company that provides payroll, benefits, and human resource outsourcing solutions for more than 550,000 clients. Credit Agricole downgraded Paychex to a "sell" yesterday. The company has underperformed the market for the year but pays out a generous 4.3% dividend yield.

New some sales
The Census Bureau's new home-sales report indicates the level of individual owned single-family homes sold and currently for sale from November. An earlier November report from RE/MAX indicates that sales were 8.1% higher than a year before. It was the fifth consecutive month to show a gain from the prior year. However, the average closing price was just over 4% lower compared with November 2010.

These numbers could indicate that supply has finally met demand. And with interest and mortgage rates at record lows, it's no surprise. Affected companies to watch today include homebuilders such as KB Homes and companies with mortgage exposure, including yesterday's big mover, Bank of America.

Foolish suggestions
While we don't have crystal balls around Fool HQ, there are some stocks we feel particularly bullish on going into 2012. We strongly believe this stock will put up high growth and reward shareholders through next year. We've even gone as far as to dub it "The Costco of Latin America," and we're pegging it to be The Motley Fool's Top Stock for 2012. Access the special free report outlining this company. It's free today, but it won't be forever. Enjoy, and Fool on!

At the time this article was published Austin Smith owns shares of McDonald's. The Motley Fool owns shares of JPMorgan Chase and Wal-Mart Stores.Motley Fool newsletter serviceshave recommended buying shares of McDonald's, Wal-Mart Stores, and Paychex and creating a diagonal call position in Wal-Mart Stores. Try any of our Foolish newsletter servicesfree for 30 days. We Fools don't all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.

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