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After The Close - The stock market managed to gain some ground this morning, slipped into negative territory in the early afternoon, but ended the session on a mixed note. At the close of trading, the Dow Jones Industrial Average was ahead 64 points; the S&P 500 Index was up nominally; and the NASDAQ was lower by 18 points. Market breadth showed a divided session, with advancers just about even with decliners on the NYSE. From a sector perspective, the energy stocks and basic materials issues made progress, while some consumer names and utility shares lagged the broader market.

In economic news this morning, the government released the monthly jobs report. Specifically, non-farm payroll increased by 304,000 in January, which was a far better figure than had been anticipated. Meanwhile, it should be noted that the unemployment rate edged up nominally to 4%, suggesting that more people are actively seeking work. This month’s report suggests that the economy remains in good shape, despite some softness overseas, and political tensions on our shores. Further, we think investors probably feel comfortable with the Federal Reserve’s current policy, and are not overly worried about rising interest rates, right now.

Meanwhile, the fourth-quarter earnings season is in full swing. In the energy area, shares of Chevron (CVXFree Chevron Stock Report) and Exxon Mobil (XOMFree Exxon Mobil Stock Report) moved up today. Both of those companies delivered respectable reports. In the healthcare space, shares of Merck (MRKFree Merck Stock Report) pressed ahead, after that company posted solid results, driven by strong sales of its Keytruda drug.

Technically, the stock market staged an impressive rally in January. It remains to be seen if further gains will be achieved in February. The fourth-quarter earnings season is not yet over, and some good reports may help lift the market from here. Negotiations with China are in progress, too, and a positive outcome there would likely serve as a catalyst for equities. – 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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Before The Bell - The page has turned on January, and it was a stellar month from start to finish. In all, it was the best January in several decades, with the strong gains coming on the heels of a very weak December that had put the major indexes into correction territory, if only briefly. Helping the market in the just-ended month were generally strong earnings. To be sure, there were outliers, and these often were dealt with sharply. For the most part, however, results have been supportive, with strong metrics from Facebook (FB) being just the latest of the high-profile names to attract buyers.  

As for the market in recent days, Wednesday's session was a stellar one, with the solid earnings and suggestions from the Federal Reserve that it would become more patient on the monetary front in the coming months combining to take stocks much higher on the day. In all, the Dow Jones Industrial Average climbed by better than 400 points on Wednesday, in a wire-to-wire bullish victory statement that took this 30-stock composite above 25,000. However, in spite of the good news from Facebook, a less-than-stellar issuance from Dow component DowDuPont (DWDP Free DowDuPont Stock Report) sent that index into the minus column during the morning yesterday.    

However, it was another story for the NASDAQ in the latest session. That is where Facebook is domiciled. This index led the way in the early going, while the Dow, hurt by weakness in shares of DowDuPont, lagged. Sluggishness in Microsoft (MSFT Free Microsoft Stock Report) stock also hurt the blue chip composite. On the whole, meantime, the markets are rising on confidence the Fed will not hamper the economy by raising interest rates too rapidly, on generally better earnings, and on fading recession fears. Also doing well in the latest session were shares of General Electric (GE). Shares of the former Dow component rose sharply on good revenue and profit numbers.   

The stock market would retain its divided look into the lunch hour, exiting the morning with sharp gains in the NASDAQ, but some modest lingering softness in the Dow. This divided market then would continue into the afternoon hours, so that as we moved into the final 90 minutes of trading, the Dow still was off by some 60 points while the NASDAQ, driven as before by strong gains in shares of Facebook, was ahead by some 85 points. Meanwhile, also on the minds of investors, in addition to quarterly earnings, was the just-issued report on non-farm payrolls from the U.S. Labor Department (discussed below).

At the same time, the good feelings engendered by the latest FOMC meeting continued to be in place, with the Federal Reserve's strong assurance that it would be patient in raising interest rates further this year, helping to not only support equities, but also to lower interest rate levels on Treasury securities. Of note, the yield on the 10-year Treasury note eased further yesterday to just over 2.62%. Yields on the 30-year Treasury bond, meantime, edged just below the 3.00% level. There thus seems to be some daylight appearing between those two instruments.

Then, as the trading day drew to a close, the Dow moved into the plus column, albeit gingerly and just briefly, while the S&P 500 Index and the NASDAQ improved further. All told, the Dow fell 15 points; the S&P 500 Index was better by 23 points; and the NASDAQ added just under 100 points. The advance-decline ratio. moreover, was strongly positive, with more than twice as many gaining as losing issues on the Big Board. It was a good way to end a strong month. Now, looking out at the coming weeks, the challenge will be to add on to those early 2019 gains.

As to the day ahead, after a mixed session in Asia overnight and some nominal early losses in Europe so far this morning, our futures are poised to head slightly to the upside at the outset of trading this morning, after the government reported that non-farm payrolls had increased by a strong 304,000 in January. An increase of 163,000 had been the forecast. Also of note in the report, the unemployment rate came in at 4.0%, which was a bit higher than expected, reflecting, no doubt, more people looking for work at this time; the labor-force participation rate came to 63.2%, which was a slight improvement from prior months; but average hourly wages rose just $0.03 last month after climbing by $0.10 in December.

All in all, this was a stellar report, but one that should still not ruffle many feathers at the Federal Reserve or down on Wall Street. The muted reaction by the futures (with a prospective increase in the Dow but a small retreat in the NASDAQ, underscores the uneven reception accorded this report. Overall, our sense is that the bull market is alive and well and that we could head higher later today after this initial indecision. Stay tuned.  - Harvey S. Katz, CFA

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