By Greg Peel

The Dow closed down 42 points, or 0.3%, while the S&P fell 0.2% to 1406, but the Nasdaq rallied 0.3%.

In theory, Friday's 172 Dow point rally was all about excitement over impressive Black Friday sales, achieved in a volume vacuum with technical models no doubt firing up while their owners were busy trying to get the lid off the cranberry sauce. I suggested yesterday there was a smell of spin in the in air from retailers, and one might benefit from waiting until the end-day numbers are in. Sure enough, they proved disappointing.

Sales this Black Friday were up 13% from 2011, which sounds impressive, but 2010-11 growth was 16% so the result is growth has slowed. One argument is that the rush by retailers to follow Wal-Mart and open on Thanksgiving night distorted the figures, but then other studies suggest the adage of "a strong Black Friday means a strong Christmas period" has little statistical correlation. It's all just a lot of hype.

Whether it was Black Friday spin, the fact 172 points just seemed silly or the fact Wall Street has done nothing but rally while Congress has been on a break and hence those two grim words have not rated a mention lately, Wall Street was primed for a pullback last night. By mid-morning the Dow was down 100 points.

Congressional leaders wasted no time in reigniting cliff-talk, and the feature of the day was two separate Republican protagonists suggesting they are prepared to bow to increased tax revenue. This is an apparent breach of "The Pledge" taken by Republicans that no tax hikes will be tolerated, but then "The Pledge" was basically taken to appease the now largely discredited Tea Party fruit cakes.

So it appears that the trend is still one of compromise, which Wall Street should be heartened by, but then it looks like involving higher taxes, which is not encouraging. The Dow was subsequently down 100 points mid-morning, but the rally to the close provides us with a Friday-Monday net move of 130 points up. Clearly the underlying trend is still positive, and there is much talk once again of a Christmas Rally.

On a technical basis, the Dow closed back under the 13,000 mark last night at 12,967, but the S&P held 1400, finishing at 1406. The Nasdaq was up because Apple was up, and Apple was up because, apart from having fallen 25% recently, last night Was Cyber Monday and the hottest item on everyone's list for Santa is the iPad and its variants.

Over in Europe, eurozone ministers are still discussing Greece as I write and we'll no doubt hear something, one way or the other, later this morning Sydney time. The latest development is that the ECB, having previously rejected the IMF's insistence on further haircuts for Greek bondholders, has now suggested it is prepared to forgo profits accumulated on buying Greek debt for the sake of sorting the problem. The ECB is after all, on an end-game basis, a not-for-profit institution, and the profits gleaned from buying Greek debt only arose because everyone else ran away when the mighty ECB stepped in to buy Greek debt.

Meanwhile, the Catalan election has taken an interesting twist. It has now been confirmed that pro-independence parties have won a majority in the regional government, however the self-styled "leader" of the separatist movement has found his party creamed. What this says about the actual will of the Catalan people is unclear, and no doubt Prime Minster Rajoy will be able to exploit this conundrum to his advantage. There appears no crystal clear mandate for a referendum on secession.

The bad news is this may just hold things up even further, as we wait and wait and wait for the Spanish bail-out request most think must come, but never does.

With the meeting still underway in Europe, currencies were quiet last night. The US dollar index is down a tad to 80.19, the Aussie is up a tad to US$1.0464, and gold is off a tad to US$1749.00/oz, hanging on to its Friday rally.

Base metals also had a good run on Friday and last night zinc and aluminium went on with it by about 1%, but copper was steady and the others slipped. Spot iron ore is down US70c to US$118.20/t.

The oils had a quieter night, with Brent falling US55c to US$110.83/bbl and West Texas falling US57c to US$87.71/bbl.

There was disappointment on the Australian bourse yesterday that the ASX200 just fannied about and did nothing after a 172 point Dow rally, but (a) wary local traders were not going to endorse Wall Street's holiday cheer too readily and (b) the cricket was really exciting. There's not much excitement in store today either if the SPI Overnight's 5 point gain is any indication.