After The Close - The stock market delivered a sluggish performance today, as investors returned from a three-day holiday weekend. At the close of trading, the Dow Jones Industrial Average was down eight points, helped by some last minute buying; the broader S&P 500 Index was off three points; and the NASDAQ was lower by roughly 24 points. Nonetheless, there were some pockets of strength in the market today, as advancers were modestly ahead of decliners on the NYSE for much of the day. From a sector perspective, strength was seen in the energy and basic materials issues, as well as in some of the retail names. Meanwhile weakness was found in the technology and financial stocks.
The economic news was quite limited today. However, there was one item worth mentioning. Specifically, according to the S&P Case-Shiller Index, home prices rose nicely during the month of October, which suggests that the housing market remains in good shape. Tomorrow, we will get a look at pending home sales for the month of November. In addition, the Conference Board will deliver its consumer confidence report for the month of December. Of note, consumer confidence has been quite strong over the past year, which is encouraging and likely reflects the progress made in the broader economy, as well as in the stock market.
Meanwhile, it was a quiet day for corporate releases. That may soon change, as the fourth quarter of 2017 is rapidly drawing to a close, and some companies will likely be issuing updated guidance in the coming weeks. Elsewhere, there was some M&A news issued today. Specifically, shares of Sucampo Pharmaceuticals (SCMP) moved up on reports that the company would be purchased by Mallinckrodt (MNK) for $ 18 a share.
Technically, the stock market delivered a quiet session today, which is understandable as this is the final week of 2017 and many traders are probably still on vacation. - 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 - Wall Street closed out a memorable week this past Friday, which featured the contentious passing of the first major tax overhaul in some three decades, with barely a whimper. To wit, after largely gaining ground leading up to the aforementioned tax bill's passage in Congress and subsequent signing by the President, stocks trended a bit lower, on average, on Friday, with the key averages giving ground grudgingly, as winning and losing issues held in a fairly tight band on both the NYSE and the NASDAQ, for much of the day.
It seems that Wall Street was both happy and relieved that this politically hot potato issue had been settled, so it was loathe to take profits. But it also was wary of stepping out further, as the sense continues that at least some of the pending benefits from the tax changes are already priced into the market. Meanwhile, in another hot button political issue, the House and Senate passed a short-term spending bill that will avert any chance of a government shutdown until January 19, 2018. The President signed off on that, too.
In other news, footwear and apparel retailer and Dow-30 component NIKE (NKE – Free NIKE Stock Report) reported quarterly results that beat on both the top and the bottom lines. However, as the company came up short on its gross margins, the stock sold off modestly on the day. All told, the stock market began the day lower and stayed modestly below the neutral line for just about all of the session. Looking at the various sectors, there was a largely even break between gaining and losing equity groups.
Looking back on this session, the market, as noted, finished slightly lower on subdued poor-holiday trading, with weakness in the financial and health care names. On the other hand, high-yielding stocks acquitted themselves quite well, as bond rates stayed high. In all, despite the small losses, stocks finished the week higher. That was the fifth week in a row of aggregate market gains. In other major markets on this session before Christmas, oil nudged slightly higher, as did gold and silver.
Looking out at a new week and following some rather supportive releases on personal income, consumer spending, durable goods orders, and new home sales, the market will be getting data on consumer confidence. However, it is likely to be a generally quiet week following the flurry of data issuances. In early January, though, we will get the final look at December, when we start out January with reports on manufacturing, non-manufacturing, employment, and unemployment. This week, however, the big item will be end-of-year positioning.
Looking ahead to today's session, we find that stocks were mixed in Asia overnight; while in Europe, the major bourses are thus far tracking a little lower. Elsewhere, oil is little changed and bond yields, which were flat at 2.48% on the 10-year Treasury note on Friday, are now passing hands at 2.49%. Finally, U.S. equity futures are now suggesting a modestly weaker opening when trading resumes at 9:30 (EST) this morning. – Harvey S. Katz, CFA