After The Close - Stocks continued their recent fashion of advancing in an uneven, modest way today. At the close, the Dow Jones Industrial Average was at another record high, pushing higher by 26 points. Similarly, the S&P 500 tacked on a point to finish in new-high territory.

But it was a different story for the tech-laden NASDAQ and the small-cap benchmark Russell 2000, where minor setbacks occurred. Market breadth was unimpressive today, too, with declining stocks moderately outpacing gainers on the Big Board, while losers outnumbered gainers by a wider margin on the NASDAQ.

Market action was affected by uncertainty arising from a mid-day correction in a data point supplied by the Institute for Supply Management. Originally, the ISM’s manufacturing index for May was reported at 53.2--a positive reading, but lower than the consensus estimate of 55.5. That number was later changed to 55.4, which helped stocks a bit.

As for the much-in-the-news bond market, yields rose appreciably on the 10-year Treasury note, to 2.53%, from 2.46% on Friday, with prices moving in the opposite direction, apparently in part as a reaction to the perception that the economy is picking up.

One of this year’s major unexpected developments was the downturn in the U.S. economy in the first quarter. Although that modest dip is known to have been largely weather-related, investors are on high alert to make sure nothing else unforeseen is causing the problems.

As for stock market groups, one broad theme that hurt already-struggling coal stocks was a proposal by the EPA to reduce power emissions at electric utility plants. Shares of coal producers, such as Alpha Natural Resources (ANR), fell as a result.

Tech stocks also battled the tide, with shares of Apple (AAPL) and Google (GOOG) declining moderately. Investors were seemingly unimpressed by Apple’s presentation at a conference in San Francisco. Google, meanwhile, felt sentiment waver on word that the company’s services were being disrupted in China ahead of the 25th anniversary of demonstrations in Beijing’s Tiananmen Square. Broadly, too, there have been some concerns about privacy issues in different corners of the world that don’t help Google’s cause.

On the plus side, airline stocks, including Delta Air (DAL), continued to soar, helped in some measure by oil prices that fell modestly in New York trading.

On the whole, although record closes were set for the Dow and the S&P today, conviction was not overwhelmingly bullish. - Robert Mitkowski

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


12:30 PM EDT - The U.S. stock market got off to weak start this morning, but is now perking up nicely. At just after noon in New York, the Dow Jones Industrial Average is up 11 points; the broader S&P 500 Index is ahead a point; while the NASDAQ is lagging slightly, but less than earlier. It should be noted that the Russell 2000, a small-cap index, is still down, suggesting traders may be feeling risk averse. But, the S&P Mid-Cap 400 is up. Meanwhile, many market sectors are making progress. Specifically, the basic materials issues are ahead nicely. Too, the high-yielding utilities are advancing. Nonetheless, the technology issues continue to trade lower. The healthcare names are also a bit weak.

In general, stocks have firmed over the past couple of weeks, with the S&P 500 Index at new-high ground. However, as noted, the small-cap names and the technology issues have experienced some challenges lately. This sense of caution may have some “bulls’ concerned about market sentiment.

Traders digested some lackluster economic news this morning. Specifically, the ISM Manufacturing Index totaled 53.2 in May. This reading was down from 54.9 in April, and also weaker than had been expected. Notably, readings above 50 are generally positive, indicating expansion in the manufacturing sector. Too, construction spending in April increased 0.2%, but fell short of expectations. Tomorrow, we get a look at factory orders for the month of April.

Finally, traders received some corporate news this today. Conn’s (CONN) stock is moving higher, as the retailer put out better-than-expected figures. After the market close today, we hear from Krispy Kreme (KKD). That stock is up in advance of that report. Elsewhere, there was some M&A news announced earlier, too. Protective Life (PL) stock is trading higher on reports that it may be acquired by Japan’s Dai-ichi Life. - 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 SurveyThere was a flurry of M&A activity over the weekend. Notably, shares of Broadcom (BRCM) are moving sharply higher ahead of the bell, after the telecommunications equipment company said that it is looking to exit its cellular baseband business and has hired an advisor to help it explore strategic alternatives for the unit. The stock of insurer Protective Life (PL) is also gaining steam in the premarket, on news that the company is reportedly in talks to be acquired by Japan-based Dai-ichi Life for more than $5 billion. Elsewhere, Ventas (VTR), a real estate investment trust specializing in senior housing and healthcare properties, has agreed to purchase industry peer American Realty Capital Healthcare Trust for $2.6 billion in cash and stock. Additionally, energy company Marathon Oil (MRO) has struck a deal to sell its operations in Norway for $2.1 billion. MRO stock is up slightly in the premarket, as a result. 

Earnings news, on the other hand, is rather light. However, shares or Conns Inc. (CONN) are indicating a nicely higher opening this morning, after the retailer of appliances, furniture, mattresses, and other durable consumer goods reported better-than-expected April-period results. 

Finally, Apple (AAPL) will likely garner attention from investors today, as it kicks off its Worldwide Developers Conference in San Francisco. This event has become the computer and personal electronics giant’s preferred forum for introducing new products and software. – Matthew E. Spencer

At the time of this article's writing, the author had positions in AAPL. 


Before The Bell - The time-honored phrase "Sell in May and go away," which suggests that stocks book all of their gains for the year, and then some, from November through April and then falter from May on, is a catchy phrase, and many traders and investors believe it to be good advice. And, often in the past, it has worked, but not this year. At least that was the case through the first of those so-called bearish six months. Indeed, May marked the fourth month in a row in which the broad-based Standard and Poor's 500 Index rose, setting a slew of all-time records in the process. The Dow also is at a record, at least on a closing basis. 

Clearly then, to this point, that catchy phrase looks to be off line, as the aforementioned Standard and Poor's 500 Index managed to close out the month with a gain bordering on 2%. That was its best showing since February, when Wall Street had snapped back following a lower January to start the year. The Dow Jones Industrial Average was just slightly higher--less than one percent this May--but that index is, as noted, also at a high.

One logical explanation for the above noted phrase about selling in May is that stocks often begin a new year on a bullish note, as profit taking and tax-loss selling presumably run their course as the old year ends. However, in 2013, the gains were so sizable that there was little impetus to do much tax selling. Also, the new year got off poorly and the averages have been struggling to get into the black on a cumulative basis ever since. Finally, since most investors are aware of this advice, many do their selling in April to get a jump on things. Moreover, a lot of investors opt to look at the fundamentals and the technical underpinnings of the market, which do not take into account specific months of the year.

Whatever the case, with the ten-year Treasury note now passing hands at just 2.46%, there is little incentive to move away from stocks. Also, the Federal Reserve is still highly supportive in its monetary approach and short-term interest rates, in turn, are not likely to be pushed up by the lead bank until well into 2015--especially with inflation at historically low levels. Gold, in response to all of this, fell notably to end the month, and is now sitting at below $1,250 an ounce this morning. Gold and metals and mining stocks have been among the weakest links in the market so far this year.

Looking at this past Friday's market, meanwhile, the holiday shortened four-day stretch ended on a mixed note, with the Dow Jones Industrials, abetted by a late push, gaining 18 points, while the tech-laden NASDAQ pared an earlier 25-point deficit to just five points. There also was some spotty weakness in the Standard and Poor's Mid-Cap 400 Composite, which fell by almost three points and in the small-cap Russell 2000, which gave back nearly five points. The broadly based Standard and Poor's 500 Index, up for much of the session, held onto its small gains, ending the latest trading day in the profit column to the tune of three points. It was a quiet end to a solid month for the U.S. equity market.

As to influences on the session, we saw the continuing chorus of earnings news from the retailers, which are almost exclusively on a January, April, July and October reporting basis, and these issuances were all over the place, with one notable gainer, being the shares of Big Lots (BIG). That issue gained some 12% on higher quarterly results. It was another story for Express (EXPR), which struggled in the most recent period and that issue ended the day lower, although off of its worst levels of the day. That stock did hit a new low for the latest year, however.            

On the economic front, the government reported that personal income rose by a modest 0.3% in April, the fourth gain in as many months by this critical component of business activity. However, after solid gains in February and March, consumer spending dipped in April, edging down by 0.1%. An increase of 0.2% had been the forecast. 

Looking ahead to the new week, we will have a lot going on, beginning with data on manufacturing activity for May due out at 10:00 AM (EDT). That key metric is generally expected to have risen further last month. We also will get a survey this morning on construction spending. Then, tomorrow, we are scheduled to a report on factory orders and data on auto sales. Wednesday, in the meantime, will bring the release of the monthly survey on non-manufacturing activity, where more good news is likely, while an issuance showing a slightly widened trade gap also is due out. The week then concludes with Friday's always exciting report on job creation for May. Here, a lesser rate of job growth than April's 288,000 is expected. Finally, as to the market this morning, after some gains overseas, our futures are suggesting a nominally better start to the new week and month when trading resumes in less than an hour from now. - Harvey S. Katz   

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