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There's More than Election 2012 Moving the Stock Market Today

By , Money Morning •

The stock market today is trading higher as investors await the results of Election 2012. By the end of tonight, barring legal battles that could delay a winner, the uncertainty surrounding the election will be over.

But there's more than the election that's affecting markets today.

As voters head to the polls, it's only fitting that the one economic report released today is on jobs.

  • Job openings continue sluggish trend- How Americans view the job market and what they expect it to be like under each candidate will be one of the deciding factors in this election. The Labor Department reported on Tuesday that job openings in the U.S. hit a five-month low in September, indicating that the recent drop in unemployment is not an accurate portrayal of the labor market. The number of available jobs fell by 100,000 to 3.56 million and it wasn't because more positions were filled - during September fewer people were hired, as well as fired. If you go back to December 2007, the start of the recession, there were about 1.8 people vying for each position and now that number has almost doubled to 3.4 people. "Hiring is the most costly expense for a business," Kurt Rankin, an economist at PNC Financial Services Group Inc. in Pittsburgh, told Bloomberg News. "Until a framework for policy can be determined, which will come with the election and the resolution of the fiscal cliff, businesses are not likely to ramp up hiring."

One of the president's biggest issues will be dealing with the fiscal cliff. The good news for investors is that it seems more and more likely that a bipartisan deal will be reached.

  • U.S. officials vow to avoid the fiscal cliff- On the eve of Election 2012, U.S. officials at the G-20 summit in Mexico City made a "clear promise" to avoid the fiscal cliff. "Time is of the essence and significant policy uncertainty in Washington must be addressed," International Monetary Fund Managing Director Christine Lagarde told reporters. "It will be important for the U.S. to address quickly the so-called fiscal cliff."

Although U.S. secretary Timothy Geithner was not present, the attending U.S. officials pledged to "pursue a bipartisan deal that would deliver a path of public-finance sustainability, but not too much to put growth at risk." If the election is not decided tonight the delay in announcing a winner will have serious ramifications for attempting to resolve the fiscal cliff. And for investors that is not good. A recent CNN poll suggests that 60% of market professionals are far more concerned about what's going to happen when spending cuts and tax increases hit Jan. 2 than they are about who's in the White House.

And finally, here's one stock that's headed for 15% gains today and another you should avoid:

  • AOL (NYSE: AOL) surges while Zillow Inc. (Nasdaq: Z) stumbles- Online real estate information provider Zillow is having its worst one-day slide ever after forecasting lower than expected revenue for the fourth quarter. Zillow went public in July 2011 and until today had traded above its post IPO spike. Yet, the company swung to a third-quarter profit of $2.33 million after reporting a loss of $570,000 a year earlier and analysts remain upbeat. "While the stock likely sells off following disappointing guidance, we believe the long-term outlook for Zillow remains positive," said James Dobson of Benchmark Research. Dobson, along with Citigroup reiterated their "Buy" ratings on Zillow.

While Zillow stock is down almost 20% today, AOL is up over 15% on better-than-expected sales and earnings. For the third quarter AOL's net income was $20.8 million, or 22 cents per share, compared with a year-ago loss of $2.6 million, or 2 cents per share. "Things look great," RBC Capital Markets analyst Andre Sequin told Reuters. "This company is continuing to make steps in the right direction." After today's run-up AOL stock is up almost 175% this year.

The Dow Jones was up 142 points, or 1.08%, and the S&P 500 was up 12.15 points, or 0.86% in afternoon trading.

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