After the Close - The U.S. equity market had a positive undertone to trading for much of today’s session, and most of the major equity indexes traded comfortably in positive territory. However, some selective late-day selling, prompted by some emerging market fears (see below) and, to a lesser extent, some portfolio recalibration on the final day of the month, erased a good portion of the gains for the Dow Jones Industrials and the S&P 500 Index. The NASDAQ, which was the weakest of the major averages throughout the day as technology and telecommunications stocks were out of favor, finished the mixed session in the red. Overall, it was a split decision from advance/decline perspective. The spread between advancing and declining issues narrowed on the NYSE, but there were still more winners than losers on the Big Board. The same could not be said for the NASDAQ, which saw the decliners take a lead in the final hour of trading this week. 

Nevertheless, February, notwithstanding today’s late-day volatility, was anything but a chilly month for those investor’s long equities. The Dow Jones Industrial Average and the S&P 500 Index were up 4.0% and 4.3%, with the latter index hitting an all-time high in the process. The NASDAQ also posted four consecutive winning weeks and has advanced 5.0% since the end of January. Pushing equities higher were decent earnings season in Corporate America, sentiment that the weak economic data of late was the product of the bad winter weather that has blanketed much of the country the last two months, and some comfort among investors that the Federal Reserve under the leadership of Janet Yellen is expected to the stay the course moving forward (i.e., continue its bond-buying tapering and keep short-term interest rates at historic lows). Also, a theme that has been in place for several years now seems to be still in play, that being that with interest rates at record lows, there are few other alternatives for investors to put their cash into.

That said, not every investor is clearly on board right now. We have seen some “flight to safety” in recent days, with fixed-income securities getting some play from those investors that have concerns about some of the emerging market countries. Specifically, fears about escalating tensions in the Ukraine are clearly on the minds of investors and was largely responsible for today’s late-date volatility. There was some profit taking after rumors surfaced that military planes from Russia carrying roughly 2,000 soldiers had landed in the pro-Russia territory of Crimea in Southern Ukraine. Ukraine's acting president Oleksandr Turchynov responded by saying Russia invaded the country with intent to “provoke a conflict.” President Turchynov also pressed Russian President Vladimir Putin to “show reason” and pull back the forces. Not surprisingly, some concerned investors have been increasing their fixed-income holdings in recent sessions. In fact, the yield on the 10-year Treasury note, which moves in the opposite direction to the price, fell about eight basis points this week.

From a sector perspective, most of the top-10 group managed to finish in positive territory. Mild leadership came from the consumer staples, energy, and utilities issues. Conversely, as noted above, the technology, telecom, and the healthcare stocks were a bit out of favor today. Today’s lackluster news on the U.S. economy, which included a downward revision to fourth-quarter GDP estimate, did not seem to faze investors in the latest session. - William G. Ferguson

At the time of this article’s writing, the author did not have a position in any of the stocks mentioned.


12:00 PM EST - The U.S. stock market is moving nicely higher today, as we close out a strong month of February. At about noon in New York, the averages are slightly off their session highs, but holding most of their gains. The Dow Jones Industrial Average is up 100 points; the broader S&P 500 Index is ahead 12 points; and the technology-heavy NASDAQ is higher by 17 points. Market breadth is favorable, with advancing issues ahead of decliners by roughly two to one on the NYSE. Moreover, strength can be found throughout the market sectors. There is leadership in the energy, consumer, and healthcare stocks, though the technology issues are lagging a bit today.

Technically, the stock market continues to press higher. Notably, today’s move up puts the S&P 500 Index at new high ground. Clearly, the committed bulls, as well as the buy-the-dip crowd, remain in control of this market. Sentiment remains bullish, if not overly so. Notably, the VIX is heading lower today, to under 14.

There were quite a few pieces of economic news issued this morning. And, the results were largely mixed. Fourth-quarter GDP was revised downward to 2.4%, but this was largely expected. Also, pending home sales advanced 0.1% in January, coming in just short of the consensus view. On a brighter note, the Chicago PMI moved up to 59.8 in February, which was a solid showing. Further, the University of Michigan Consumer Sentiment Survey for February was revised upwards to a final reading of 81.6.

In corporate news, there were a few earnings reports of note. Shares of Deckers Outdoors (DECK) are trading lower, as that company issued a weaker-than-expected outlook. Also, The Gap (GPS) stock is up a bit, after the apparel retailer released decent figures, but provided a mixed outlook. - Adam Rosner

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


Stocks to Watch from The Survey Earnings season still has some gas left in the tank, and investors are digesting a number of financial reports this morning. Early indications are that Wall Street was pleased with quarterly results from salesforce.com (CRM), a provider of customer relationship management services; from energy drink maker Monster Beverage (MNST); from 3D printer manufacturer 3D Systems (DDD); and from Iron Mountain (IRM), which supplies businesses with records, documents, and information-management services. Indeed, all of these stocks are moving higher ahead of the bell, as a result. 

On the other hand, investors were not impressed with earnings related news from Pier 1 Imports (PIR), a seller of goods for the home, Deckers Outdoor (DECK), which owns footwear brands UGG and Teva, and apparel and accessories retailer The Gap (GPS). Consequently, these equities are indicating lower openings this morning, with DECK showing the most weakness. – 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 - We will soon wind up the month of February, and what a month it has been for the bulls. In fact, as we get set to commence the final trading day of the shortest month of the year, we find that all of the major averages have made appreciable strides over the past four weeks, following a woeful January that had put each of the major indexes well into the red.

In fact, the gains have been so stellar this month that the NASDAQ enters the final day of February with a solid year-to-date gain of 3.4%; the Standard and Poor's 500 Index is up a tad, with a 0.3% increase; while the Russell 2000, the widely watched small-cap composite, is ahead by 2.1%. Indeed, only the Dow Jones Industrial Average, the 30-stock blue chip composite, among the key averages, is off on a cumulative basis this year, with that average down by just 1.8%.

All of this follows a rather volatile, but generally firmer, market session yesterday, in which stocks sold off modestly in the morning, but regrouped during the middle of the day, and built on those gains during the afternoon, finally ending the penultimate session of February on the upside. By the close, the Dow was ahead by 74 points; the S&P 500 Index was better by nine points; and the tech- laden NASDAQ was higher by 27 points.

Behind this latest show of strength was a better-than-expected showing for January durable goods orders. On point, that volatile series had been expected to show a decline by 2.0% last month; however, the pullback was half as large, and if we consider just orders for capital goods-related equipment, the overall gain was 1.7%. That somewhat better showing follows a really good report on new home sales on Wednesday. Taken together, these data points suggest that once the run of unusually severe winter weather finally passes, most likely sometime in March, if the calendar can be believed, the economy will pick up steam, with GDP growth getting back on board.

Also of help were comments made by new Federal Reserve Chairwoman Janet Yellen before the Senate banking Committee. Ms. Yellen, while covering no new ground, stuck with the current benign monetary policy outlook. She opined that it was hard to tell how much of the recent economic sloppiness can be attributed to the weather. Given this uncertainty, she feels it is best to not overreact at this time. That would suggest that, for now, the lead bank plans to continue with its monetary tapering in the months to come. That stability is apparently what Wall Street wanted to hear, therefore the latest market gains. Traders also welcomed the drop in Treasury bond yields, which have come the past two days on a better bond auction and the Fed Chair's aforementioned Banking Committee testimony.   

Meanwhile, with yesterday's fresh gains, the NASDAQ is now at its highest level since April of 2000, while the S&P 500 Index is up at an all-time closing high. The Dow, too, is not too far shy of its best levels ever. This has been a truly resilient bull market, and there so far seems to be no end to it in sight, although we caution investors that no one rings a bell at a market top--or a bottom, for that matter.

Now, looking ahead to the final trading day of the week and month, we find that stocks were weaker overnight in Asia and are trending lower this morning in Europe. One optimistic note, however, comes from St. Louis Federal Reserve President James Bullard. He earlier had suggested that the central bank will start to raise interest rates later this month; now, he is suggesting that this initial uptick will commence in early 2015.

However, that bit of good news has not swayed Wall Street, where the equity futures are pointing to a slight decline in our market when trading commences in less than an hour from now. - Harvey S. Katz, CFA

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