1:48 PM PT Market Recap -- According to the Commerce Department, after 3-months of consecutive gains, new home sales unexpectedly declined in December by 2.2%, to an annual rate of 307,000. 2011 experienced the worst-ever year decline in new home sales of 6.2%. In Q3, foreclosures made up 20% of all home sales. The unemployment landscape worsened with a large 21,000 jump in weekly jobless claims to 377,000.

The Conference Bureau said that in December, the index of leading economic indicators rose 0.4%, which was the 3rd consecutive gain. According to the Commerce Department, durable-goods orders in December jumped a better than anticipated 3%. Caterpillar's earnings exceeded expectations, and shares of Netflix soared after they beat the street. The Treasury issued $29B in 7-yr notes at a record low yield of 1.359%. Mortgage rates on the 30-yr climbed to 3.98%, but have been below 4% for 8 straight weeks. Gold bulls drove prices to 7-week high on the back of FOMC policy pledging nearly free money through 2014. Crude oil jumped through $101, the US$ lost ground and US debt prices ended stronger. The DJIA hit its highest level in 3 1/2 years but sold off later in the day, with the broader indices closing modestly lower.

In the U.S., and elsewhere, central bank monetary policy continues to force investors to seek “risk on” trades, which is why assets such as gold have subsequently rallied.

Across the Atlantic, a solution to the Greek debt problem remains elusive, but private creditors do plan to submit a new offer to the Greek government. They may propose a 3.75% avg. interest rate on new bonds to be issued as part of a debt swap.

From a technical perspective, some indicators suggest near-term overbought conditions on the S&P 500, yet this is no guarantee of a top. Look for support near the recent lows at 1300, with overhead resistance between 1340 and 1350.