Market Commentary (After Market Close): Early Gains Surrendered Amid Lack of Support

Some early buying sent the S&P 500 up to a fractionally better 2009 high, but a lack of support left stocks to roll over and settle at the neutral line. A firmer U.S. dollar also dragged down interest in stocks.

Despite a tepid tone to premarket trade, stocks made their way to solid gains in the early going. Materials stocks (+1.1%) were leaders, yet again, as precious metals prices continued to push higher. In fact, gold hit a new record high near $1218 per ounce overnight. It closed pit trade slightly off of that mark with a 1.1% gain at $1213 per ounce.

Gold managed to hold its gains in the face of a modest rebound by the greenback. The Dollar Index had traded near 52-week lows in the previous session, but managed to make its way to a 0.3% gain this session.

The dollar's advance helped undercut the stock market's gains, which had already begun to fade from fractionally improved 2009 highs as buyers took a breather. Stocks were left to surrender their gains and spend the afternoon with modest losses until some moderate support helped the broader market finish with a fractional gain.

Amid the broader market's fractional gain, the major sectors finished in mixed fashion. The defensive-oriented utilities sector saw the strongest gain. It advanced 1.3% after analysts at Deutsche Bank initiated shares of American Electric (AEP 33.94, +0.90) and Edison International (EIX 35.18, +0.58) with Buy ratings.

Meanwhile, analysts at Credit Suisse upgraded shares of regional banks BB&T (BBT 26.19, +0.59) and SunTrust (STI 23.29), which helped win support for the group (+1.3%) despite a report from analysts at Oppenheimer that suggested regional banks have reported only 36% of net charge-offs expected in this credit cycle.

Still, strength among regional banks wasn't enough to give the broader financial sector a lift out of negative ground. Instead, the financial sector finished with a 0.1% loss as it lagged for the second straight session.

Energy was the worst performing sector this session, though. It surrendered 0.8%, primarily due to markedly lower crude oil prices, which fell 2.3% to close pit trade at $76.60 per barrel. Sellers stepped up their efforts against oil after weekly inventory tallies showed a build of 2.09 million barrels. A draw of 400,000 barrels had been expected.

This session's headlines were limited in quantity and impact. Participants had a muted reaction to the latest ADP Employment Change Report, which showed that 169,000 private payrolls were shed in November. That figure is down from the 203,000 job losses reported in the October ADP Report, but it is worse than the 150,000 job losses that had been widely expected.

Though the ADP figures don't always match those of the government's official nonfarm payrolls report, which is due Friday morning, it is often directionally accurate relative to expectations. The consensus currently calls for a loss of 123,000 private jobs.

On a similar note, the Fed's latest Beige Book stated that employment conditions remain generally weak. However, it did indicate that economic conditions have generally improved modestly, while consumer spending improved moderately.

Corporate headlines had little lasting impact on the broader market. Boeing (BA 53.78, +0.06) benefited early from news that competitor Northrop Grumman (NOC 55.27, +0.01) will not pursue certain tanker contracts, but shares of BA eventually rolled over.

Meanwhile, General Motors CEO Fritz Henderson announced his resignation. The announcement comes after the company said its November U.S. vehicle sales fell an unadjusted 2% year-over-year, while its retail sales increased 1% for the month.