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Earlier this morning, it looked as though stocks were headed higher for the day. The Dow Jones Industrial Average (DJINDICES: ^DJI ) opened up by roughly 40 points. However, the blue chip index has since headed lower and is currently down by just short of 30 points, or 0.21%, in late-morning trading.
Traders remain torn between good and bad news.
Good news: Vehicle sales up in November
On the positive side, data released today shows that American car manufacturers sold more cars in November than in the same month last year. Toyota (NYSE: TM ) led the way with a 17% year-over-year increase, followed by Chrysler, Ford (NYSE: F ) , and General Motors (NYSE: GM ) , which reported increases of 14%, 6.5%, and 3.4%, respectively.
Overall, Edmunds.com, an online automotive-information provider, estimates that vehicle sales increased by 11% last month over 2011 and 1.4% compared to October. The company cited Hurricane Sandy as one of the principal reasons. According to an Edmunds.com senior analyst quoted in The Wall Street Journal: "The fact that November sales have bounced back from a sluggish October suggests that those who lost cars or who deferred purchases after Hurricane Sandy are already getting back on the road. Fortunately for these buyers, they entered a market in which holiday and year-end deals were in full swing and loan rates hovered near all-time lows."
Despite the upbeat news, shares in General Motors and Toyota are currently trading lower by 1.35% and 0.21%, respectively. Meanwhile, shares of Ford are higher by 0.79%.
Two other pieces of positive news came courtesy of China and Europe. Results from a survey of Chinese manufacturing activity released today show that the country's economy is picking up despite global headwinds. The HSBC Chinese purchasing managers' index showed a reading of 50.5, a 13-month high. And in Europe, Greece announced that it's in the market to buy back its down debt, which is trading at a significant discount. The move will give the ailing country some much-needed breathing room on the fiscal front.
Bad news: Political stalemate over fiscal cliff
On the negative side, American lawmakers hit the media circuit this weekend to garner support for their respective positions on the fiscal cliff. This has increased concerns over a political stalemate.
Speaking on Fox News Sunday, Republican House Speaker John Boehner said that bipartisan talks over the issue have gone "nowhere." The sticking point for Republicans is the Democrats' insistence on raising revenue via tax increases. According to Rep. Boehner, "When you go and increase tax rates, you make it more difficult for our economy to grow. ... Half of that income is the small-business income."
On the same program, the Secretary of the Treasury, Tim Geithner, responded by saying: "It's obviously a little hard for [the Republicans] now, and they're trying to figure out where they go next, and we might need to give them a little time to figure out where they go next." Needless to say, Sec. Geithner was referring to the results of the election, in which President Obama beat Republican candidate Mitt Romney.
Also weighing on stocks this morning were data showing that the U.S. manufacturing sector contracted last month. The results from the Institute for Supply Management's manufacturing purchasing managers' index came in at 49.5 for the month of November. This was notably lower than the 51.7 reading of the previous month -- a reading below 50 indicates contraction while a reading above it suggests expansion. According to the report: "The second half of the year continues to show a slowdown in demand; respondents also express concern over how and when the fiscal cliff issue will be resolved"
On the heels of this news, stocks are currently split in intraday trading, with 17 Dow components lower and 13 headed higher. The best-performing stocks are both in the tech space, with Hewlett-Packard (NYSE: HPQ ) and Intel (NASDAQ: INTC ) up 2.3% and 1.1%, respectively. Meanwhile, the worst-performing Dow stock is Chevron (NYSE: CVX ) , down 0.5% on the day.
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