After The Close - The stock market put in a somewhat lackluster performance today, as investors digested a batch of mixed corporate reports. At the end of trading, the Dow Jones Industrial Average was down 21 points; the S&P 500 Index was off six points; and the NASDAQ was lower by 27 points. Market breadth showed a divided session, with declining issues slightly ahead of advancers on the NYSE. The healthcare issues and conglomerates made progress today, while the financials and basic materials names lost ground.
In economic news, the nation’s trade deficit narrowed to $49.3 billion in the month of November, where analysts had been looking for a less constructive showing. Tomorrow, the employment situation will return to the spotlight when the latest weekly jobless claims are reported.
Meanwhile, the fourth-quarter earnings season is still unfolding. Over the past 24 hours, a few widely followed companies weighed in with their results. Specifically, shares of The Walt Disney Company (DIS – Free Disney Stock Report) traded lower, even though the media giant put out a respectable release. Shares of General Motors (GM) moved up, as investors were pleased with the auto-makers’ numbers and restructuring efforts. Elsewhere, in the broader technology space, shares of Electronic Arts (EA) lost ground after a disappointing report.
Technically, the stock market has made significant progress since the start of 2019. The S&P 500 Index is now near its 200-day moving average, located at the 2,740 area. It remains to be seen if the bulls can push that average through this closely followed technical level without encountering much resistance. - 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 - After the worst December for stocks since the Great Depression and the best January in some 30 years, Wall Street is off and running thus far in February. On point, stocks rallied nicely on Monday and hit the ground running again yesterday, with the Dow Jones Industrial Average, a 175-point gainer to start the trading week, quickly climbing to an early advance of more than 180 points, reaching above 25,400 in the process. That up move put the 30-stock index to within 1,500 of its all-time high.
Contributing nicely to this initial strength, which would persist through the morning, was optimism about earnings. This was especially notable in the technology sector. The strength in tech reflected the generally strong showing on the corporate bottom lines this earnings season. Overall, earnings growth is still in the double-digit percentage range, although the low double digits. To be sure, that cumulative quarterly gain lags the prior three quarters, but is likely well ahead of the more muted prospective increases over the next several quarters.
Meanwhile, after that quick start and solid morning advance, the market settled down somewhat for a time, with the Dow's gain falling back from 180 points to fewer than 70 points. However, after mulling about for a time at these more modest levels, the market took off again as we reached inside the final two hours, with the Dow, for example, quickly climbing to an advance north of 160 points again. The other averages would respond favorably, as well. All told, the market appeared on its merry way into the close as we hit the final hour of trading.
The afternoon optimism reflected not only a positive feeling about earning, but also some anticipation again of last evening's State of the Union Address. Most of the profit news was positive, but there were some outliers. Among the latter was food processing giant Archer Daniels Midland (ADM), which reported disappointing results on rising costs and the tab from the trade dispute with China. Elsewhere, though, there was enough aggregate optimism for the stock market to conclude matters near the day's highs.
Wall Street would make one final push to attempt to eclipse the day's highs, and would come close, with the Dow ending matters ahead by 172 points. The S&P 500 would finish 13 points to the good and the NASDAQ would add 55 points. Also, gaining stocks would hold a formidable lead on declining issues, as the bulls continue to make a strong case for back-to-back solid months to start the new year. Traders would then close their books and await last evening's State of the Union speech with hopes for some bipartisan proposals and eventual action.
Now, after yesterday's strong action stateside, the market begin a new day, and to get things going, we see that shares were higher in Asia overnight, while in Europe, the leading bourses are mapping an uneven course so far this morning. In after hours reporting, investors gave a thumbs up to the quarterly issuance from Walt Disney,(DIS – Free Walt Disney Stock Report) with that blue chip rising somewhat in after-hours indications. As to our markets, the early read on the U.S. equity futures is uninspiring. - Harvey S. Katz, CFA