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After The Close - The stock market opened nicely higher, pulled back sharply at midday, before making a surge in the final hour of the session. At the end of the day, the Dow Jones Industrial Average was up roughly 118 points; the broader S&P 500 Index was ahead 19 points, and the NASDAQ was higher by 46 points. Market breadth was positive, with the majority of stocks making progress today. In addition, most of the major equity sectors advanced, led by solid gains in the healthcare, energy, and basic materials issues. In contrast, the defensive utility names lagged the broad market.

Traders received a couple of positive economic news items earlier today. Of note, construction spending rose 0.9% in the month of November, coming in better than most analysts had expected. Furthermore, the ISM Manufacturing Index moved up to 54.7 during the month of December, which was a stronger showing than had been anticipated. Tomorrow will be a light day for economic news; although the FOMC is slated to release the minutes from its December meeting in the early afternoon. Given the heightened interest in the Federal Reserve’s monetary policy lately, this report may receive attention from traders. Meanwhile, it is worth mentioning that the main news item for this week will take place on Friday morning, when the government releases its December employment figures.

In the corporate arena, few companies posted quarterly results today. However, the major U.S. automakers were in the news, as traders reacted to concerns that the incoming government may discourage overseas manufacturing. 

Technically, stocks got off to a positive start in 2017. However, it is likely too early to tell how the market will hold up in the year ahead. Much will likely depend on the new leadership set to be installed in Washington later this month. - 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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12:10 PM EST - After an indecisive and mostly lower week for Wall Street to close out a strong 2016, the stock market began the new week and the first four-day span of 2017 on the right foot, at least as far as those long equities are concerned, with a brisk early opening-morning rally. On point, after a strong start to the initial 2017 session, and some easing back after the first few minutes of trading, the bulls regrouped and pressed still higher after the first half hour. The second wind came after the Institute for Supply Management posted a strong survey on manufacturing activity during December.

Specifically, the trade group issued a reading of 54.7 for the latest month. That industrial-sector tally was above the 53.6 reading generally expected. It also was ahead of the November tally of 53.2 and past the line between an expanding and a contracting manufacturing sector of 50.0. Among the contributors to December's notable showing were nice increases in new orders, which rose from 53.0 to 60.2. Also gaining nicely and reaching the 60.3 level was production. Improving modestly was employment, while a big increase was secured by pricing, suggesting that inflation might well be on the rebound.

Boosted by this solid issuance, which also included positive comments from respondents in the chemical products, computer and electronic products, and plastics lines, the ISM reported its strongest reading of the year in December. The 54.7 tally also was well above the average score of 51.5 for the past 12 months. All in all, this was a healthy way to start a new year that likely will see GDP growth of some 2.0%-2.5%, with a further acceleration in 2018, if the President-elect's program of infrastructure improvements and lower corporate and individual tax rates is enacted.

Returning to the equity market, after this morning's initial run-up, which quickly saw a triple-digit win for the Dow Jones Industrial Average, that 30-stock composite, which ended 2016 at 19,762 after a brief early week run toward the 20,000 level, was ahead by some 175 points at its morning peak. However, the Dow couldn't hold that early, formidable increase. Thus, as the morning moved along, profit taking set in, with the gains being eaten away notably. The NASDAQ, too, was higher, with its early rise surpassing 70 points at one time.

The selling intensified somewhat as the morning concluded, so that as we reached the noon hour on the East Coast, the Dow was ahead just 40 points; the S&P 500 Index was better by nine points; and the NASDAQ had more than halved its earlier 70-point increase to just 24 points. Still, the overall market remained nicely stronger, with gainers more than doubling losing issues on the NYSE, while nine of the top 10 equity groups were higher, led by basic materials, energy (on higher oil prices) and the financials. Only the utility group lagged at this time. - 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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Before The Bell - Last Friday brought to a close a mostly higher year for the stock market, particularly the final two months, although the latter part of this final week of 2016 was anything but compelling, as equities ended lower on overdue profit taking and belated concerns as we look ahead to 2017. As to that concluding session, the market started out lower and little changed over the course of that six-and-a half hour stretch, as the averages ended on a soft note, with the Dow Jones Industrial Average falling 57 points and the NASDAQ dropping 49 points. 

Technology and consumer-oriented stocks were most prominent in Friday's decline, which took place in a very subdued semi-holiday trading atmosphere that saw the Dow, at least for the time being, halt efforts to surmount the psychologically significant 20,000 mark. All told, even with this late setback, the blue-chip composite ended 2016 with a 12-month gain of 13.4%. The NASDAQ was better by a more modest 7.5%, while the S&P 500 Index added just under 10%.

Among the more notable winners last year, however, was the Dow Jones Transportation Index, which surged just over 20%. The S&P Mid-Cap 400 Composite, meantime, added 18.7%, while the Russell 2000 Index jumped 19.5% and the Value Line Arithmetic Composite was better by 20.7%. Individual notable winners on the just-ended year were banking behemoth Bank of America (BAC) and oil driller Halliburton (HAL). Among the significant losers was Gilead Sciences (GILD).  

Behind the late 2016 charge for Wall Street was optimism that the surprise electoral triumph of Donald J. Trump, and the potential implications for fiscal policy going forward as a result, as he is continuing to emphasize lower tax rates for corporations and individuals, decreasing regulations, and increasing expenditures on the infrastructure and the military. Of course, this multi-pronged program must still get enacted, but for now optimism is still holding the day as we prepare for a new year.

Looking out at a new week and the first four-day span of the new year, we see a fairly busy time for the economy and key business releases, led this morning by scheduled data on manufacturing activity. That report from the Institute for Supply Management is expected to show some slight improvement. Also of note this week will be a key release from the ISM on non-manufacturing activity, where a strong showing is anticipated. Further the Commerce Department will issue figures on the nation's trade gap; a somewhat wider deficit is the forecast.

But the major focus this week will be on the labor situation, as the Labor Department will issue figures on non-farm payrolls for December. Current expectations are that the nation, which added 178,000 positions in the prior month, will have created 190,000 jobs in the final 31-day period of 2016. Also, the jobless rate, which dipped to 4.6% in November, is estimated to have nudged up to 4.7% last month. The headline employment figures, which can be market moving, will precede by several weeks, the next Federal Reserve meeting. 

Finally, in comings and goings this morning, stocks in Asia were mostly higher overnight, while equities are making progress in Europe so far this morning. And on our shores, early optimism reigns, as the futures are sharply higher at this hour led by a nearly 150-point gain in the Dow futures. Bond yields are up, as well, with the return on the 10-year Treasury note now climbing past 2.50% again. Thus, 2017 could well start on a strongly positive note for equity investors.   - Harvey S. Katz 

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