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After the Close - The U.S. stock market moved dramatically higher today. Furthermore, there was continued buying through the afternoon, lending added support to the session. All told, the Dow Jones Industrial Average, which assumed a leadership role, closed up 193 points; the broader S&P 500 Index advanced 20 points; and the NASDAQ added on 43 points. Market breadth indicated broadbased buying of equities, as advancing stocks swamped decliners by three to one on the NYSE. All the major market sectors made progress, with particular leadership in the basic materials names. Specifically, the metals stocks performed well, with gold up over 1%, to $1,290 an ounce. The energy stocks, too, put in an impressive session, even though crude oil slipped slightly. Meanwhile, there really was no real weakness in the market today, as even the defensive utilities logged solid gains.

Technically, the market has staged an impressive rally over the past six sessions, reversing much of the damage suffered in the modest pullback that began in late January. The fact that we have seen considerable follow through was also encouraging, as it suggests a commitment to the rally. Today’s advance put the S&P 500 Index firmly above 1,800, and also beyond its 50-day moving average located at 1,809. Importantly, the Dow which had been quite weak also firmed up. Meanwhile, sentiment has improved in recent days, as the VIX was lower by 5%, to about 14, today. The fact that the market has quickly mustered strength in the face of the aforementioned pullback is not too surprising, given what we have seen from of the bulls over the past year, or so.

Traders received limited economic news, save for a tame report on wholesale inventories. However, Janet Yellen, the newly appointed Chair of the Federal Reserve, offered some testimony before the House today. Traders were likely pleased that she offered no major surprises, and remains committed to the Fed’s current policies. Further, the fact that Republicans won’t likely put up resistance to raising the debt limit also removes a major stumbling block.

Meanwhile, the earnings season continued to progress. Today, we heard from Sprint (S). That issue was up after the telecom provider put out a strong report.  Things did not go as well for Rackspace (RAX), as that stock was off after the CEO announced his departure.  - 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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2:40 PM EST - It is too soon to say whether or not the risk of a stock market correction is fully over, but judging by the way the market has acted over the past four sessions, the evidence is building that the risk is way down.

That is because equities are surging again, making it three trading sessions in the past four that the market has climbed notably, with just yesterday's slight advance being an outlier.

Of note, as we reach the 90-minute mark remaining of the trading day, we find that the Dow Jones Industrial Average is up nearly 190 points, climbing back to just a shade below the 16,000 mark, while the Standard and Poor's 500 Index is better by 18 points, and the NASDAQ is up to the tune of some 40 points. It is another clear rout of the bears.

Pushing stocks higher was dovish testimony by new Federal Reserve Chairwoman Janet Yellen before a House of Representatives committee earlier today. She said that the economy's brief hiccup this quarter is apparently due to the weather and not something more basic and lasting, and that the current Fed tapering policy, initiated by her predecessor, Ben S. Bernanke, is still place.

That comment has mollified some heretofore nervous bulls, and stocks are aggressively on the rise. Also, talk of a correction is fading fast. - Harvey S. Katz

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 EST - The U.S. equity market, after a listless start to the trading week yesterday, began today’s session to the upside and then added aggressively to those initial gains as the morning progressed. Thus, as we reach the midday hour on the East Coast, the major U.S. equity indexes are well into positive territory, with the Dow Jones Industrials showing the biggest percentage gain. Nearly all of the Dow-30 stocks are in the black, with the only exception being Cisco Systems (CSCO), which reports its latest quarterly results tomorrow. Overall, advancing issues are outpacing decliners by a healthy margin on both the Big Board and the NASDAQ.

Giving the market a nice boost were comments from new Federal Reserve Chair Janet Yellen before a House subcommittee earlier this morning. As expected, Ms. Yellen said the central bank plans to stay on the current course of tapering its bond-buying program. Although she said the U.S. economy is far from firing on all cylinders, she noted that steady growth is expected in the year ahead and the reduction in stimulus and the emerging market fears should not be significant obstacles for the U.S. economy to overcome. Investors took this as a sign that the U.S. economy is expanding and were also pleased to learn that she plans to stay the course that former Chairman Ben Bernanke had outlined for the central bank late last year.

From a sector perspective, all of the 10 major groups are in positive territory. The leadership is coming from the more economically sensitive energy and basic materials sectors. Within the energy space, the stocks of the integrated oil and gas companies, as well as the drilling companies are up nicely, while the shares of precious metals and mining companies are leading the basic materials issues higher.

Meantime, we did get some earnings news from Corporate America, but those reports were clearly overshadowed by the Chairwoman’s testimony before the House subcommittee. Of note this morning, was a disappointing report from consumer packaged foods company ConAgra Foods (CAG). Shares of the food processor fell after the company lowered its bottom-line guidance for fiscal 2014, which ends in late May. Fellow food processor Dean Foods (DF) also warned to the downside and its stock is notably weaker today. Conversely, CVS Caremark (CVS) reported solid quarterly results and the stock of the pharmacy giant is trading in positive territory. To see what other companies reported earnings this morning, investors may want to give our Stocks to Watch commentary another glance.

Looking ahead to the remainder of the trading day, it is looking like it will take a big effort by the bears to knock the bulls out of the driver’s seat, as buying has been pretty broadbased. Investors, emboldened by Ms. Yellen comments, are buying stocks. In fact, the S&P 500 Volatility Index (or VIX), also known as the “fear gauge,” is down about 5% today, as investors are clearly now showing more appetite for risk. That said, investors also may want to pay close attention to what the other FOMC voters have to say this afternoon, as their comments have also had an impact on the direction of trading since last May when former Chairman Bernanke first noted that the central bank planned to begin tapering its stimulus measures. The three new Federal Reserve voting member who are scheduled to speak this afternoon, including Dallas Fed President Fisher, are known to have hawkish views on monetary policies. Moreover, news just surfaced that the House will vote tonight on raising the debt-ceiling limit. The vote on Capitol Hill was moved up a day as another winter storm is scheduled to hit the Washington D.C. area tomorrow. Stay tuned. - William G. Ferguson

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 SurveyThe drumbeat of earnings news continues today. Investors took issue with a number of quarterly reports, especially from cloud-computing company Rackspace Hosting (RAX), which also announced that its CEO would be departing. The stock is down sharply ahead of the bell, as a result. Other equities moving lower in the premarket on earnings news include shares of apparel and accessories retailer Urban Outfitters (URBN), energy company Pioneer Natural Resources (PXD), diversified manufacturer Ingersoll-Rand (IR), and tobacco company Reynolds American (RAI). On the other hand, investors appeared pleased with December-period financials from drug store operator CVS Caremark (CVS), telecommunications company Sprint (S), and biotech Regeneron Pharmaceuticals (REGN), as those issues are indicating higher openings this morning. – 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 stock market opened the new week by largely marching in place for much of the day, before a late run helped to put each of the major market averages into the plus column. This was a welcome respite, meanwhile, from the frenetic performances (both up and down) of last week. Back then, the market had plunged on Monday, then used the balance of the five-day stretch to regain all of that lost ground, and then some.

There were no such fireworks yesterday. In fact, after being down early, with the Dow Jones Industrial Average off by a relatively modest 60 points during the morning, stocks steadied in the afternoon and rose slightly near the close--but never with any of the intensity of the final two sessions of last week, when the Dow had put in triple-digit wins. This time, by comparison, the moves were minuscule, with the Dow adding eight points and the Standard and Poor's 500 Index gaining a mere three points; but the tech-laden NASDAQ showed some leadership with a better-than-22-point increase.

All of this took place on a light news day. That will again be the case both today and tomorrow--at least from the point of view of scheduled economic releases. But we will not be devoid of other news, as new Federal Reserve Chairwoman Janet Yellen will offer testimony before the House of Representatives today on her plans for upcoming monetary action by the central bank. Expectations are that she will speak in support of the monetary tapering moves introduced by the Fed through her predecessor, Ben S. Bernanke. What she says and how she does so could have some influence on trading today. She will then testify before a Senate committee on Thursday.

As for economic news, as noted, there will be little today or tomorrow, but the business beat will pick up on Thursday and Friday, as we will get issuances on retail sales, weekly jobless claims, industrial production, factory usage, and consumer sentiment. These should have some impact, along with the remaining earnings reports, as fourth-quarter reporting season winds down. But the big potential for this market, one way or the other, will be the testimony of Ms. Yellen today and Thursday, especially as this will be her first appearance in her new position before Congress.   

Meanwhile, the stock market had taken a pounding though last Monday, and although the cumulative setback was well short of a correction, with the Dow off just over 7% at its worst levels of the year. And it was the market's worst performer among the major indexes. Also, even that moderate setback was some three percentage points below the conventional definition of a correction. That said, we may not yet be out of the woods, given the comparative speed of the aforementioned setback, which covered just over one month. The economic and interest rate news at home and, even more so, the direction of events overseas, will have an impact on whether or not we carry through on a correction, in our opinion.

Now, as we look out to a new day and fresh challenges, as noted, the big news item today figures to be the testimony of the new Fed Chairwoman. Her prepared text is about to be issued; her testimony, including questions and answers, is some 90 minutes away. Thus far, optimism reigns, as stocks were notably higher in Asia overnight, and they are pressing forward aggressively in Europe thus far this morning, most likely on some expectation that Ms. Yellen will be supportive of a continued accommodative monetary policy by the Fed. For Europe, today's indicated gain would be the fifth in succession. Meanwhile, on our shores, the Standard and Poor's 500 Index futures are up by some four points, while the NASDAQ futures are ahead by more than 17 points. All of this points to another positive start for the bulls.   - Harvey S. Katz       

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