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After The Close - The U.S. stock market opened modestly higher this morning, and managed to make progress through the afternoon. At the close of the day, the Dow Jones Industrial Average was up 62 points; the broader S&P 500 Index was ahead eight points; and the technology heavy NASDAQ advanced 19 points. There was some underlying strength to the session, as advancing issues were ahead of decliners by just over two to one on the NYSE. However, it should be noted that investors were not particularly interested in the smaller names today, and that may suggest a somewhat cautious tone was emerging. Nonetheless, most of the major market sectors pressed higher. There were solid advances in the high-yielding utilities. Also, the healthcare names did quite well. Meanwhile, the basic materials sector lost some ground. Further, the energy issues were quite weak. Notably, crude oil declined over 2%, to $95.60 a barrel.

Stocks have firmed up considerably over the past several sessions. However, it remains to be seen if the bulls can extend the recent market gains, especially as the major averages move back to high ground.

Meantime, the economic news was not too supportive today. Initial jobless claims for the week ended August 9th, came in at 311,000. This figure was up from the prior week’s reading and also was higher than many economists had anticipated. Many view the 300,000 mark as critical, as a reading below this level suggests that the labor market is on the mend. Weekly continuing claims edged up, too, further indicating that the employment situation may not be improving as much as had been expected. Tomorrow will be a busy day for economic reports. The Producer Price Index for July is due out. Also, the industrial production figures for July are set to be released.

Finally, a few large companies weighed in with their results recently. Yesterday afternoon we heard from Cisco (CSCO - Free Cisco Stock Report). That stock headed lower today, as investors were somewhat disappointed with the networking company’s issuance. Elsewhere, shares of Wal-Mart (WMT - Free Wal-Mart Stock Report) dipped initially, but then recovered, after the retailer put out a mixed report. - Adam Rosner

At the time of this article’s writing, the author did not have positions in any of the companies mentioned.

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12:00 PM EDT - Stocks are modestly higher in quiet trading right around noontime on the East Coast. In particular, the Dow Jones Industrial Average is up 32 points, while the NASDAQ and the S&P 500 are seven points and four points higher, respectively. Market breadth tells a somewhat different story, with more strength concentrated in issues on the New York Stock Exchange, where gaining issues are outpacing decliners by about two to one. There is only a slim margin between winners and losers on the NASDAQ.

The morning’s data flow started on a bit of a down note, with the number of initial weekly jobless claims rising by the highest amount since June. Wall Street had expected about half the actual rise of 21,000 new filings. The initial jobless claims figure wasn’t bad enough to suggest the improving trends in the labor market are veering off course, though.

The news out of Europe wasn’t pretty, either, with a report that showed Germany’s GDP contracted slightly in the second quarter. That could be an indication that sanctions on Russia—a major trading partner for the euro zone—are starting to have an effect. Elsewhere, France’s economy was stagnant in the April-to-June period, and an earlier report showed some backsliding in Italy’s economy.

The dour tidings out of Europe are one reason bond yields in this country remain stubbornly low. The yield on the 10-year Treasury note fell a fraction, to 2.40%, or near its lowest close in over a year. That is despite strong employment gains and domestic GDP that clocked in at a hefty 4.0% in the second quarter. But at the very least, the engine of growth that America often provides the rest of the world isn’t strong enough right now to pull the euro zone economy ahead.

Also in focus today are retailing stocks, where results are mixed. Dow-30 member Wal-Mart (WMT - Free Wal-Mart Stock Report) reduced its full-year earnings guidance, although its second-quarter profits met most analysts’ expectations and sales came in better than predicted. Wal-Mart stock is trading slightly higher following the report.

One of the better performing retail stocks this session is Kohl’s (KSS), which turned in slightly improved second-quarter performance, in spite of a decline in sales. Investors seem to like the fact that same-store sales turned positive in July.

Heading into the afternoon session, the tone of trading is positive, but not overwhelmingly so. - Robert Mitkowski

At the time of this article’s writing, the author did not have positions in any of the companies mentioned.

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Stocks to Watch from The SurveyInvestors are digesting earnings reports from a handful of high-profile companies, including Dow-30 component Cisco (CSCOFree Cisco Stock Report). The maker of networking equipment continued to face a challenging operating environment in the July period, especially in emerging markets, but was able to deliver results that topped investors’ expectations. Nonetheless, CSCO stock is moving slightly lower ahead of the bell, possibly due to management’s guidance or its plans to cut 6,000 jobs, or roughly 8% of the workforce. There was also news on the retail front, as both Wal-Mart Stores (WMTFree Wal-Mart Stock Report) and Kohl’s (KSS) released July-quarter financials. Kohl’s update garnered a warmer reception on Wall Street than Wal-Mart’s, which noted that same-store sales were flat in the period. Wal-Mart also cut its earnings outlook for the rest of the year. WMT stock is indicating a marginally lower opening this morning, in response, while KSS is up modestly. Finally, shares of NetApp (NTAP) are moving moderately higher in the premarket, after the provider of systems and services for managing and protecting data released solid July-period financials. – Matthew E. Spencer 

At the time of this article’s writing, the author did not have positions in any of the companies mentioned.

Before The Bell - The bulls were back at it again yesterday, following a brief one-day respite. To recap, after the stock market had soared on Friday in an apparent reaction to a perceived diminution in global tensions and then added modestly to those gains on Monday, the bulls seemingly lost their nerve on Tuesday, although the consequent setback was nominal both in relative and absolute terms. It is still tough to slow these bulls down.

Then, yesterday, after that slight pause, those perennial optimists were out in front again, sending the market on a wire-to-wire victory lap. Indeed, the leading equity averages started the day modestly higher and then built upon those gains as the day wore on. By the close, the indexes were all fairly near their best levels of the day, led higher by the tech-laden NASDAQ, which wound up the session ahead by just over one percent. Solid gains also were recorded by the Dow Jones Industrial Average (up 91 points, or 0.55%), the Standard and Poor's 500 Index (ahead 13 points, or 0.67%), and the small-cap Russell 2000 Composite. That composite added just over three-quarters of a percentage point. It was an impressive recovery, following an up-and-down past two weeks.

Helping to get this notable rally going, ironically, was a listless release on July retail sales. In all, that key metric showed no change last month; a gain of 0.2% had been the expectation. What helped to get the market moving, apparently, was the belief that the overall report showed enough areas of strength to imply that the business expansion was still likely to push ahead, but that the data were not vigorous enough for the Federal Reserve to raise interest rates sooner than anticipated. At this point, the guessing is that the lead bank will initiate its first rate increase around the middle of next year.

In addition to this economic issuance of note, the market also was helped by the perception that global tensions might be easing ever so slightly, both between Russia and Ukraine and in the Middle East, where several hot spots are in play. Of course, global strife remains a recurring concern on Wall Street and it seems as though this soap opera waxes and wanes on an almost daily basis. It appears that if the situation overseas deteriorates, the markets in Asia and Europe soon falter, as if on cue, and that causes our futures to start out with losses, which typically causes U.S. stocks to sell off at the open and proceed lower from there. Yesterday, the situation was the reverse, and the good news persisted over the course of the trading day. 

Taking a longer view, the market seems to be comfortably situated. To wit, the economy is growing nicely, but not overheating in a way that might cause the Fed to step on the brakes abruptly; earnings are generally coming through, although there have been some celebrated misses and cautionary guidance issued over the past few weeks; inflation is still benign, but as economic growth steps up, earlier fears of possible deflation are easing; and the Fed remains suitably dovish to warrant the applause of the monetary bulls. Taken together, and with capitalization rates high, but not all that far out of line--especially in a low-inflationary setting, the equity market appears to be able to sustain its strength going forward. And we are fairly bullish, as a result, and see the market managing to at least hold at these elevated levels for a while.

Thus, we find yesterday's strong market to have been not all that surprising and not unjustified, so long as the world setting does not falter in a dramatic way. Looking ahead now, the next key set of data will be issued tomorrow, when the Labor Department reports on the July Producer Price Index at 8:30 AM (EDT). Then, 45 minutes later, the Commerce Department will release its latest report on industrial production and factory utilization. A few minutes after that, the University of Michigan will issue its survey on consumer sentiment.         

Now, the task for the bulls will be to make it three up days in four sessions. Right off the bat, the indications from Asia were positive as stocks over there were generally in the plus column overnight. However, the news that Germany's economy (the Continent's largest) contracted by 0.2% in the second quarter, while France's economy (the second largest in the euro zone) stagnated in the period, showing no growth. Not surprisingly, the bourses in those countries are off rather materially thus far this morning. The market is off less severely in London so far today. Over here, meanwhile, less-than-compelling profit releases, guidance, and other corporate news are likely to produce sluggish openings for the stocks of Dow components Cisco Systems (CSCO - Free Cisco Stock Report) and Wal-Mart Stores (WMT - Free Wal-Mart Stock Report), the nation's largest retailer. Still, in spite of all this, U.S. futures are up modestly in early action suggesting that the bulls could try to make it three gains in four sessions this week.   - Harvey S. Katz

At the time of this article’s writing, the author held positions in one or more of the companies mentioned.