After The Close - Stocks surged today, as traders waited for first-quarter earnings season to commence. Further, there may now be a sense that Washington will choose a measured response to the aggression in Syria. At the end of trading, the Dow Jones Industrial Average was ahead nearly 294 points; the broader S&P 500 Index was up 22 points; and the NASDAQ was higher by 71 points. Market breadth was quite positive, with advancers easily outpacing decliners on the NYSE. From a sector perspective, the technology and industrial issues displayed leadership. In contrast, the utility names encountered some pressure today.
There were just a few economic reports released this morning. Specifically, export prices dipped 0.1%, while import prices rose 0.2%, during the month of March. Elsewhere, initial jobless claims came in at 233,000 for the week of April 7th, more or less meeting expectations. Tomorrow will be a relatively quiet day for economic news, as well.
In the corporate sector, we heard from a few major companies over the past 24 hours. Among the widely followed names, shares of Bed Bath & Beyond (BBBY) plunged after the retailer provided a weak outlook. Shares of BlackRock (BLK) edged up after the asset manager posted solid results. Looking ahead, tomorrow we will hear from several major banks, including JPMorgan Chase (JPM – Free JPMorgan Stock Report), Wells Fargo (WFC), and Citigroup (C).
Technically, the S&P 500 Index has firmed up a bit lately. However, it remains to be seen if the bulls can mount a sustained buying campaign, and push stocks notable higher from here. - Adam Rosner
At the time of this article’s writing, the author did not have positions in any of the companies mentioned.
Before The Bell - Following a mixed stock market showing on Monday and a comeback (from last Friday's steep losses) on Tuesday, equities started the middle session of the trading week with new declines. A worsening in the trade drama with China, which had pummeled stocks late last week, eased off on Tuesday when China's President Xi said he would be open to tariff negotiations with the United States. However, the issue of China and trade is not all that Wall Street has on its mind. So, too, it is currently preoccupied with the latest U.S.-Russia rift over Syria and the ongoing and shifting drama involving investigations of the White House.
So, after the big gains on Tuesday, stocks opened sharply lower on Wednesday, with the Dow Jones Industrial Average, a more than 400-point gainer the day before, dropping by some 200 points at yesterday's open. In fact, the futures had earlier signaled a pending Dow loss of some 300 points. The market then attempted to rebound, and actually pared the Dow's loss to some 60 points. But after the first hour had passed, the sellers massed again, and the market weakened anew. All told, it was a bifurcated session, with the Dow off by 200 points once again at the 90-minute mark, but with the NASDAQ virtually flat.
Then, after falling back to a loss of 225 points, or so, the Dow sought to rebound, with the deficit easing to fewer than 60 points as we hit the noon hour on the East Coast. The market then dipped back somewhat as we moved into the middle of the afternoon, and as investors awaited the 2:00 (EDT) release of the minutes from the Federal Reserve's FOMC meeting in March. As widely expected, the minutes affirmed that all of the Fed members were looking for higher GDP and further upticks in inflation, along with additional hikes in interest rates. Expectations are for two more rate increases this year--one in June and another in September.
The optimistic Fed economic outlook did have a few caveats--mostly concerning worries about the global trade outlook. Overall, the central bank sees GDP growth of 2.7% this year and 2.4% in 2019. Both rates are above prior Fed forecasts. On a worrisome note, the lead bank also noted that it might move from accommodative to neutral or restraining in describing its future monetary course. For now, though, there were few alterations in direction, and the stock market remained lower following the release of the minutes, losing modestly more ground as the afternoon progressed--in part on a further jump in oil prices on Middle East concerns.
As to inflation, the Consumer Price Index was released at 8:30 AM (EDT) yesterday, and that metric's headline number showed a decline of 0.1% in March. For the past year, the CPI was up 2.4%. Backing out food and energy, to get the so-called core CPI, we see that prices were ahead up 0.2% in the latest month, which was consistent with the CPI's recent performance, and 2.1% for the past four quarters, in the aggregate. The CPI data followed a somewhat more inflationary PPI issuance the day before. Meanwhile, the stock market continued to hold at lower levels, with the Dow continuing as the weak link.
This downturn would linger into the final hour of trading, when further weakness would evolve, driving the Dow down by more than 250 points for a time, finally ending the session with a loss of 219 points. The NASDAQ, also weakened down the stretch, losing 25 points. Breaking things down, we see that nine of the top 10 equity sectors lost ground yesterday, although none by as much as 1%. The lone gainer, energy, added 1.3% on those higher oil quotations. Also, gaining and losing stocks were in a virtual standoff on the NYSE, with the latter leading nominally on the NASDAQ. In all, it was a narrow descent for the market on this day.
Looking out at a new day, we see that the major indexes were trading in the minus column in Asia overnight, while in Europe, the bourses down the previous session, are generally mixed in the current session so far. Further, oil prices, up at near a four-year high yesterday, are holding steady in early dealings today, while yields on the 10-year Treasury note, which softened a bit yesterday on those Middle East tensions, are now at holding flat at 2.79%. Finally, the latest trends in the U.S. equity futures point to a modestly higher opening when trading resumes this morning. – Harvey S. Katz, CFA