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Sector activity was mixed. Financials (-2.8%) led the way lower on Friday, but Telecom (+3.1%) and Health Care (+1.9%) were strong early in the week. The market's only notable move higher this week came at the open on Monday, when a weaker U.S. dollar and much better-than-expected Existing Home Sales report helped stocks surge. Sales in October rose 10.1% to 6.1 million homes, greatly outpacing expectations of 5.7 million as the first-time home buyers tax credit provided much of the incentive for the increase. Stocks held those gains through Monday's session, and into Tuesday and Wednesday as volume slowed ahead of the Thanksgiving Day holiday. But one headline from Wednesday, that the UAE government was restructuring Dubai World, didn't initially receive much of a reaction. But on Thursday, with U.S. markets closed, European markets plunged as concerns grew, helping to change investors' risk appetite. The Dubai government asked creditors, which reportedly include many European banks, particularly in the United Kingdom, to defer payments on some $20 billion in debt coming due over the next 18 months. Asian markets, which had traded lower on Thursday, plunged overnight on Friday, and the weakness carried over to U.S. markets, with the S&P 500 losing 1.7%. While the actual direct impact on the U.S. markets may be minimal, the news acted as a nudge to those that may have already been considering locking in their gains after the incredibly strong rebound in global equity markets over the past eight months. It also triggered a flight-to-quality -- the dollar has been stronger against the euro and pound over the last two days -- increased volatility and impacted emerging markets, where historically a macro event that adversely affects one region has typically raised the risk profile for other developing regions. With limited participation in today's shortened session and the early-stage nature of the Dubai situation, it is still difficult to say how this will ultimately play out. We will get a better read on the implications next week as more information is known and participants return to the market. It will most likely be the main topic in the marketplace, as next's week calendar is thin. Earnings season has ended and there are no notably Treasury auctions. But the economic calendar is full, with the ADP Employment change on Wednesday preceding the key Nonfarm Payrolls figure and Unemployment Rate on Friday.
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