-World Bank makes plea for action against devastating climate change risks
-Ex-Mossad head asks for Israeli flexibility on Gaza -FT
-US should engage China in the Middle East -FT
-US home inventories at February 2006 lows
-NAHB housing index rises far above forecasts
-Wal Mart brings forward dividend payments

Dow Jones Industrials: 1.65%
Nasdaq Comp.: 2.21%
S&P 500: 1.99%

The main US equity market averages finished the first session of the holiday shortened (and trading volume light) week with their largest gain in two months. That on the back of remarks by President Obama, last night, regarding his optimism over on-going debt talks with Republicans in both the House and the Senate.

Speaking at a press conference in Bangkok Obama said, ‘I am confident we can get our fiscal situation dealt with.’

Also helping gains in stocks along were the better than expected housing figures released this afternoon showing home inventories at half-decade lows, along with double digit price increases versus a year ago.

‘Rising home prices have already resulted in a $760bn growth in home equity during the past year,’ the National Association of Realtors’ (NARs) chief economist, Lawrence Yun, said today following the release of better than expected data. ‘Given that each percentage point of price appreciation translates into an additional $190bn in home equity, we could see close to a $1trn gain next year,’ he added.

Similarly, the news-flow coming out of the Eurozone took a turn for the better over the weekend.

Of interest, the combination of falling stocks and rising profits as the economy recovers has left the S&P 500′s price-earnings ratio below the ending level of eight of the nine bull markets since 1962 and beneath the average of any since Ronald Reagan was in power, Bloomberg is reporting.

Acting as a backdrop, but potentially of far more importance than all of the above, observers are carefully watching events in the Middle East. Some reports seemed to indicate that a break-through could be close at hand.

Turkey’s Prime Minister, on the other hand, labeled Israel a ‘terrorist state.’

The European Union meanwhile upheld Israel’s right to self defence, while at the same time calling for an immediate cease-fire in the Gaza violence and calling on Israel to react ‘proportionately.’

Wal Mart brings forward dividend payments

Meantime, and in stock specific news, Intel Chief Executive Officer Paul Otellini announced his departure.

Of interest as well, Wal Mart brought forward the date of its next regular dividend to the next 27th of December, instead of January 2nd, so as to avoid the new legislation governing the taxation of company pay-outs of their profits.

Shares of meat processor Tyson Foods rose sharply after the company announced a special dividend and posted fiscal fourth-quarter earnings which beat analysts’ estimates.

Cisco Systems will acquire Meraki for $1.2bn.

The latest quarterly results out from home improvement retailer Lowe’s also came in ahead of analysts’ consensus forecasts, on the back of strong demand for its wares in the aftermath of hurricane Sandy.

Analysts at Bank of America Merrill Lynch lowered their price target on shares of Apple to $780 from $840 before, albeit while maintaining their view on the company’s shares at buy.

From a sector stand-point the best performance was to be seen in the following sectors: Computer hardware (6.41%), Footwear (4.08%) and Technology (4%).

Better than expected economic figures

Existing home sales increased by 2.1% month-on-month in October, to an annualized rate of 4.79m (Consensus: 4.75m). The previous month’s reading was revised down to 4.69m from a preliminary reading go 4.75m. Worth noting, inventories of homes for sale fell to February 2006 lows.

The NAHB’s housing market index for the month of November improved to the 46 point level, from 41 in the month before (Consensus: 41). Economists at Barclays Research were of the following opinion: ‘Home builder sentiment has been moving higher throughout the recent housing recovery and we expect this trend to continue.’

Large rise in energy quotes

Front month West Texas crude futures are rising by 2.55% to the $89.14 barrel mark on the NYMEX.

10 year US Treasury yields are now 3 basis points higher, at 1.61%.

S&P 500 – Risers
Tyson Foods Inc. (TSN) $18.72 +10.90%
Apple Inc. (AAPL) $565.73 +7.21%
Abercrombie & Fitch Co. (ANF) $43.80 +7.17%
Alpha Natural Res (ANR) $7.57 +6.62%
Lowe’s Companies Inc. (LOW) $33.96 +6.19%
Urban Outfitters Inc. (URBN) $37.07 +5.76%
United States Steel Corp. (X) $21.15 +5.43%
Phillips 66 Common Stock (PSX) $48.12 +5.13%
Chesapeake Energy Corp. (CHK) $17.47 +5.11%
Electronic Arts Inc. (EA) $13.71 +5.06%

S&P 500 – Fallers
Progressive Corp. (PGR) $21.47 -4.79%
Assurant Inc. (AIZ) $34.61 -2.67%
SCANA Corp. (SCG) $45.60 -1.08%
Centerpoint Energy Inc. (CNP) $19.38 -1.02%
Ameren Corp. (AEE) $29.08 -0.95%
Cablevision Systems Corp. (CVC) $13.90 -0.86%
Edwards Lifesciences Corp. (EW) $85.03 -0.83%
VeriSign Inc. (VRSN) $40.61 -0.76%
Teradata Corp. (TDC) $61.97 -0.75%
Edison International (EIX) $44.13 -0.74%

Dow Jones I.A – Risers
Bank of America Corp. (BAC) $9.49 +4.06%
Hewlett-Packard Co. (HPQ) $13.30 +3.50%
Verizon Communications Inc. (VZ) $42.81 +3.41%
JP Morgan Chase & Co. (JPM) $40.59 +2.68%
General Electric Co. (GE) $20.66 +2.53%
E.I. du Pont de Nemours and Co. (DD) $42.93 +2.34%
Caterpillar Inc. (CAT) $83.62 +2.06%
AT&T Inc. (T) $33.82 +2.05%
Alcoa Inc. (AA) $8.34 +1.96%
Home Depot Inc. (HD) $63.33 +1.95%

Dow Jones I.A – Fallers

Nasdaq 100 – Risers
Green Mountain Coffee Roasters Inc. (GMCR) $27.33 +11.32%
Apple Inc. (AAPL) $565.73 +7.21%
Nuance Communications Inc. (NUAN) $21.57 +6.00%
Electronic Arts Inc. (EA) $13.71 +5.06%
Randgold Resources Ltd. Ads (GOLD) $106.73 +4.87%
Flextronics International Ltd. (FLEX) $5.80 +4.69%
Research in Motion Ltd. (RIMM) $9.59 +4.24%
Dollar Tree Stores Inc. (DLTR) $40.45 +4.20%
Staples Inc. (SPLS) $12.20 +4.05%
Marvell Technology Group Ltd. (MRVL) $7.70 +3.99%

Nasdaq 100 – Fallers
VeriSign Inc. (VRSN) $40.61 -0.76%
Akamai Technologies Inc. (AKAM) $35.87 -0.64%
Intuit Inc. (INTU) $58.95 -0.56%
Monster Beverage Corp (MNST) $45.23 -0.53%
Autodesk Inc. (ADSK) $31.32 -0.51%
Sandisk Corp. (SNDK) $39.30 -0.41%
Baidu Inc. (BIDU) $92.42 -0.28%
Stericycle Inc. (SRCL) $89.90 -0.19%
KLA-Tencor Corp. (KLAC) $44.25 -0.18%
Seagate Technology Plc (STX) $27.09 -0.07%

AB