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After The Close - The U.S. stock market headed lower this morning, but managed to pare its losses as the session progressed. The fact that traders were willing to step in and show support for equities is worth noting. In a weaker climate, the decline at the opening might well have given way to further selling later in the afternoon. At the close of the session, the Dow Jones Industrial Average was off 21 points; the broader S&P 500 Index was down just two points; and the NASDAQ was basically flat. Market breadth was largely mixed, with advancing issues just about even with decliners on the NYSE. Meanwhile, there were a few areas of strength today. For example, the basic materials stocks advanced quite a bit, helped by the metals producers. The energy names also managed to make progress, thanks to gains in the oil equipment area. In contrast, the financial issues were quite weak, dragged down by the banks and the real estate-related issues.

Technically, the stock market continues to consolidate, after last week’s solid showing. In some sense, this may be healthy, as it allows traders to take some profits, rotate into new names, and get adjusted to the market at its current level. This may be necessary, as the major averages are now near some widely watched milestone levels, such as 17,000 on the Dow.

Today’s economic news was largely positive, but did little to inspire traders. Specifically, initial jobless claims for the week ended June 21st, came in at 312,000. This figure was roughly in line with expectations, and a bit lower than the prior week’s revised figure. Notably, jobless claims are now a good deal lower than where they had been months ago, and this suggests that employers are hiring again. Meanwhile, personal income and spending moved up a bit in May, which was encouraging, too. Tomorrow will be a light day for economic reports. We look for the University of Michigan to finalize its consumer sentiment figure for June.

Traders received a few profit reports today. Lennar (LEN) shares were off slightly, even though the home builder put out a decent report. Also, Bed Bath and Beyond (BBBY) stock was off sharply, as investors were disappointed with the retailer’s figures and guidance.

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 EDT - Stocks are trading notably lower today after some uninspiring economic data were released this morning and following a senior Federal Reserve official’s comments that interest rates might rise as early as March. Right around the noon hour on the East Coast, the Dow Jones Industrial Average is off 73 points; the NASDAQ is down 15 points; and the S&P 500 is in the loss column by eight points. Market breadth is pointed to the downside as well, with declining issues outnumbering gainers by a wide margin.

The morning’s business news did contain some reassuring data regarding the labor market, where weekly initial jobless claims fell slightly, maintaining their positive recent bias.

The Commerce Department’s May figure on personal income was also reasonably upbeat, matching expectations. But the companion report on personal spending came in below forecasts. Moreover, sources indicate the 0.2% increase in spending from the prior month was completely attributed to higher prices, rather than consumers buying more goods and services. That threw into question whether the big GDP forecasts for the second quarter are reasonable, hence the temporary withdrawal of support for stocks.

Also pressuring the market today were words from St. Louis Federal Reserve Chairman James Bullard to the effect that inflation is becoming increasingly prominent, and could move above 2% in 2015. If so, rates might move up sooner rather than later, which contradicted the prevailing wisdom that it might take until late in 2015 for the Fed to start hiking short-term rates. Investors did not take kindly to that line of thinking, having gotten so used to the Fed’s massive monetary support.

It is pretty much a down day for most asset classes. Quotations for oil and gold are both off, even with a hint of inflation in the air. But despite a dip in oil prices, there is strength in the oilfield services sector, with shares of industry leader Schlumberger (SLB) rising nicely on heavy volume.

As for individual stocks, shares of Iron Mountain (IRM) are surging after the document storage company announced it had gotten the go-ahead to convert to a real estate investment trust. There is also significant interest in the day’s IPO, GoPro (GPRO), with the stock of the video-camera maker jumping 30% on its first day of trading.

Heading into afternoon trading, stocks are off their worst levels of the session, which may be a sign the bulls are regrouping. - Robert Mitkowski

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

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Stocks to Watch from The SurveyEarnings are still trickling in, with one of the most notable disappointments coming from Bed Bath & Beyond (BBBY). Indeed, shares of the home goods retailer are moving decidedly lower ahead of the bell, after the company released May-period results and August-quarter guidance that fell short of investors’ expectations. Other stocks moving lower in the premarket on earnings-related news include spice maker McCormick (MKC), furniture manufacturers Herman Miller (MLHR) and Steelcase (SCS), tobacco company Philip Morris International (PM), and specialty chemicals producer H.B. Fuller (FUL).

On the bright side, Wall Street appeared pleased with quarterly results and/or outlooks from consulting company Accenture (ACN), homebuilder Lennar (LEN), recreational vehicle manufacturer Winnebago (WGO), and packaged foods company ConAgra (CAG). All of these stocks are indicating higher openings this morning, as a result. 

Elsewhere, shares of Alcoa (AA) are up nicely ahead of the bell, after the aluminum producer agreed to acquire Firth Rixson, a maker of components for jet engines, for $2.85 billion. Finally, the stock of Iron Mountain (IRM) is soaring in the premarket, after the provider of records, documents, and information-management services received the green light from the IRS to convert into a real estate investment trust (REIT). – 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 - If there ever was an opportunity for the bears to seize control of the financial market agenda, it appeared to be yesterday. To wit, the stock market had sold off moderately on Tuesday, with the Dow Jones Industrial Average, for example, going from a modest early gain to a closing loss of almost 120 points. At the same time, the NASDAQ had reversed from a morning uptick of more than 30 points to a closing loss of 18 points. Moreover, stocks in Europe had fallen overnight, while on our shores, investors were hit with a one-two punch of negative economic news about an hour before trading commenced. 

On this latter score, the Commerce Department weighed in with a report showing a decline in May durable goods orders of 1.0%. A lesser setback had been forecast. More ominous, that same government agency reported that the nation's gross domestic product had been revised downward to show a contraction in the first quarter of 2.9%. That was nearly three times the earlier estimate of a drop of 1.0% and more than the expected setback of 2.0%. True, much of the blame for this sharp reversal (growth had come in at 2.6% in last year's closing quarter) could be laid on the doorstep of the woeful January-to-March weather. Still, this was a notable deterioration in the nation's economic performance, whatever the reason.

And, on cue, stocks did wilt somewhat at the open, with the Dow dropping by roughly 20 points in the first few minutes of trading. However, when those losses failed to balloon into something more serious, the bulls regrouped and stocks were soon heading into the plus column, finally securing moderate, but progressively stronger gains as the latest session wound down to an encouraging close. All told, the averages closed near their best levels of the day.

What failed, apparently, to unnerve investors over here, was the fact that the GDP report, covering the first quarter as it did, was old news. Indeed, more recent surveys have shown a decidedly more bullish tilt, especially reports issued this week on existing home sales, new home buying, housing prices, and consumer confidence. Such postings most likely point to growth of 3%, or so, in the fast-concluding second quarter. Also, it is now quite obvious that the first-quarter failings were essentially weather related, and not something more long-lived in nature. In fact, it is conceivable that the rest of this year could well benefit from the weak first quarter, as the inventory drawdown, which contributed heavily to the initial-period contraction, would likely reverse itself over the final three quarters of 2014. Rebuilding such stockpiles, by definition, contributes to expanding GDP.

Whatever the rationale for yesterday's modestly better showing, the bulls had to have been reassured by the gains, especially as the market's persisting strength is coming from the elevated perch of nearly 17,000 in the Dow and 2,000 in the Standard and Poor's 500 Index. Meanwhile, the secondary stocks did even better during the session, with rather strong increases in both the Standard and Poor's Mid-Cap 400 and the small-cap Russell 2000. As to the larger-cap indexes, the Dow closed up by 49 points; the S&P 500 added almost 10 points; and the NASDAQ posted a 29-point gain. As for gaining sectors, the large-cap drug companies did well, while there were some scattered gains in a few old-line tech issues. 

As for the day ahead, stocks traded higher in Asia overnight, led by the Hang Seng Index and stocks in Australia, while in Europe so far this morning, equities are generally higher. And over here, the futures are mixed, with a small gain in the NASDAQ futures and a similar nominal loss in the S&P 500 futures.

Finally, in news released moments ago, the government reported that personal income and consumer spending both ticked higher in May, with the former gaining a solid 0.4% for the month, following a 0.3% gain in April, while spending ticked up a tame 0.2% last month; in April, expenditures had been flat. An up-and-down pattern has prevailed on the spending side throughout the year thus far. - Harvey S. Katz 

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