S&P 500 and Dow hit new record highs

US stocks ended Wednesday session marginally higher as investors discounted mostly disappointing economic news. The S&P 500 and Dow Jones Industrial Average scored their 47th and 30th record closes this year at 2072.77 and 17827.75 respectively. Trading was thin ahead of Thanksgiving holiday. The Commerce Department said Wednesday consumer spending climbed a seasonally adjusted 0.2% in October after being flat in September. Core capital goods orders excluding aircraft fell 1.3 percent for a second straight month, a closely watched proxy for business spending plans. The drop in core capital goods suggests the economy is not fully immune to Japan's recession and cooling growth in China and Europe. A separate report from the Labor Department showed initial claims for state unemployment benefits last week were above 300,000 for the first time since early September. The Chicago purchasing-managers index and the University of Michigan Consumer sentiment index for November fell slightly. Sales of new single-family homes rose 0.7% in October, while a gauge of pending home sales fell 1.1% in October, signaling that upcoming deals could slow down.

Vitor Constancio, the European Central Bank’s vice president, said on Wednesday the ECB might decide as early as the first quarter of next year whether to begin buying sovereign bonds, starting the so called quantitative easing program. Equities across Europe rose after this news but ended essentially flat as The Stoxx Europe 600 index closed unchanged at 346.28. The euro declined after Constancio’s comments , but recovered later against the dollar to buy $1.2502 compared with $1.2473 in late Tuesday as the dollar lost ground after a round of weak US economic data.

Oil futures declined further on Wednesday on expectations the Organization of the Petroleum Exporting Countries will not decide to cut significantly oil production at its meeting on Thursday. January Brent crude on London’s ICE Futures exchange slid 54 cents to $77.80 a barrel. Nymex crude has dropped nearly 3.7% since the beginning of the week. Oil futures are down more than 30% from their midyear high. Saudi Arabia’s oil minister, Ali Al-Naimi, said Wednesday that he believes the crude market “will stabilize itself,” while Iran’s oil minister said OPEC should comply with its output ceiling. As analysts point out, lowering the production limit is not in OPEC’s long term interest as by limiting its own output it would concede more market share to shale oil producers. At the same time, current low oil prices are to the benefit of some larger OPEC members like Saudi Arabia as this will undoubtedly put pressure on smaller and inefficient oil producers.

Gold declined on Wednesday with December gold finishing down less than 0.1% at $1,196.60 an ounce as the mixed US economic data indicating some slowing in the pace of economic growth were discounted by investors and didn’t cause an increase for the safe haven asset demand. Gold is up 2.1% in the month to date, having dipped just 0.1% so far in this holiday-shortened week. Meanwhile, December silver settled unchanged at $16.55 an ounce. Corn futures rose for a second day in Chicago on demand for the grain to make ethanol as US output of the fuel climbed to an all-time high. Yesterday, corn futures for March delivery gained 1.8 percent. With 94 percent of the crop harvested as of November 23, many farmers are storing corn until prices rise.