After The Close - The stock market opened slightly higher this morning, slumped after about an hour, and only partially recovered late in the day. At the end of the session, the major averages were mixed, with the Dow Jones Industrial Average closing down 16 points; the broader S&P 500 Index was off four points; and the NASDAQ was little changed. Meanwhile, market breadth was slightly more encouraging, as advancers were just ahead of decliners on the NYSE. From a sector perspective, weakness was seen in the utilities and in the healthcare names. In contrast, strength was found in the technology, consumer, and telecommunications issues.

There were a number of economic reports issued this morning. Specifically, housing starts increased to 1.29 million units, annualized, in the month of February. However, building permits softened slightly. Further, initial weekly jobless claims moved slightly lower, to 241,000 for the week of March 11th, which was in line with expectations. Finally, according to the Philadelphia Fed, business conditions in that region strengthened in the month of March. Tomorrow will be a busy day for economic news, as well. On point, we will get a report on industrial production, as well as the latest consumer sentiment figures from the University of Michigan.

Meanwhile, we heard from a couple of widely held corporations over the past 24 hours. Specifically, shares of Oracle (ORCL) traded higher, after the technology giant posted better-than-anticipated results and offered an optimistic outlook. Further, shares of Dollar General (DG) moved up slightly after the retailer delivered a decent report.

Technically, stocks have held up reasonably well lately. Wall Street is taking yesterday’s interest-rate announcement in stride, for now. However, it remains to be seen how stocks will perform, if additional increases follow in the months ahead. - Adam Rosner

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


12:15 PM EDT - U.S. equities were up-and-down on Thursday morning, opening well above yesterday’s closing price before spiking lower a half hour into the session. The major averages showed signs of a recovery thereafter, but ultimately fell further as profit taking occurred amongst large-cap issues. The early-morning rally was partially driven by positive updates from the business beat. Notably, weekly jobless claims fell to 241,000 and housing starts ticked higher last month. While the economic reports helped to carry Wednesday’s momentum into the morning, the enthusiasm was short lived. The Dow Jones Industrial Average and S&P 500 returned 33 and 5 points, respectively. The NASDAQ managed to hang on to gains longer than its counterparts, but finished the morning hours 4 points lower. Buoyed by resilient buying activity amongst small cap stocks, advancers and decliners are about even.

Accordingly, sector trading was mixed. Energy, industrials, and utilities slipped on softness in the oil market (discussed below). Healthcare shed the most, though that sector remains up over 3% in the past five days. Basic materials, which has been one of the biggest benefactors of the post-election rally, has teetered between positive and negative territory. Strength in the technology and telecom groupings has offset weakness elsewhere, with Dow components Intel (INTCFree Intel Stock Report) and IBM (IBMFree IBM Stock Report) leading the former’s charge.

Meanwhile, U.S. crude oil struggled to extend momentum from yesterday. Wednesday’s rally saw values rise 2.4% on a surprise reduction in domestic stockpiles and an optimistic outlook for OPEC’s drilling limit. Still, despite the recent jolt of positivity, inventories remain near all-time highs. Though most of the prior-day gains remain intact, the per-barrel price slipped roughly a third of a percent as we neared lunchtime on the East Coast.

Looking out on the rest of the day, we believe there are enough short-term momentum drivers for the bulls to mount a comeback in the afternoon. Still, with investors looking to capitalize on the recent run-up, only a broad-based turnaround in trading can help to offset today’s profit taking. - Robert Harrington

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


Before The Bell - It has been a clearly eventful past week for Wall Street, beginning with last Friday's better-than-expected rise in non-farm payrolls and continuing with key data on retail sales, producer prices, and consumer prices. Then, there was yesterday's Federal Reserve meeting, in which the nation's central bank voted to lift interest rates for the third time in the past 15 months. As for the stock market through all this, there has been some profit taking along the way, but also buying on the dips, which is helping to keep the averages near their all-time highs.

As to yesterday, the early action was positive, with most of the 10 equity groups tracking higher and with a large majority of stocks gaining ground on the NYSE and the NASDAQ. Regarding the indexes, themselves, they also gained, with the Dow Jones Industrial Average climbing to a late-morning advance of just over 50 points on optimism that while the Fed was on a path to raise interest rates, it probably would not surprise with a notably hawkish monetary statement. Also, a subdued reading on retail sales, in which the latest month saw a gain of just 0.1%, was not worrisome, as it suggested a monetary friendly slow business uptick. 

Meanwhile, inflation continues to selectively tick higher. But with oil prices drifting lower for the most part, a major rise in pricing pressure appears unlikely at this time. As to the stock market's latest strength as we headed toward the afternoon conclusion of the FOMC meeting, it was engendered, in part, by a rare increase in oil prices yesterday. Oil had been sinking the past few weeks, and yesterday's 2.4% bounce was certainly welcomed by the bulls. In all, Wall Street headed into the afternoon in a strong position and seemingly poised to continue its advance unless the Fed upset the apple cart.

Things then would change little in the intervening two hours, with the major indexes continuing to hold onto modest gains ahead of the Fed decision. As the 2:00 PM EDT hour arrived, and the Fed opted to do the expected, that is to increase its federal funds rate by 0.25%, stocks rallied further. Indeed, in the next few minutes, what had been a 50-point gain in the Dow more than doubled to just over 100 points. It seems as though Wall Street likes the expected and shuns surprises. And this Fed, if anything, is transparent. The other indexes responded in kind, and a strong close to the afternoon's action appeared likely.

The market then retained its upward bias into the latter stages of the afternoon, even strengthening as trading wound down, with the Dow's advance going well north of 120 points as we entered the final hour of business. It seems that along with the absence of any surprises in the near-unanimous decision, the lead bank did not assume an overly hawkish monetary stance. That had been the lone area of potential surprise. Still, the Fed is likely to raise rates twice more this year and three times, or so, in 2018, when the economy will presumably be advancing more strongly.

The gains then kept coming until near the close, with the Dow's session-best increase reaching 140 points as the trading day's end approached. As stocks soared for much of the afternoon, bond yields fell, with the yield on the 10-year Treasury note easing back to 2.51%. Just two days ago, it was above 2.60%. All told, the Dow retained 113 points of that late-day gain; the S&P 500 was ahead by 20 points; and the NASDAQ was up 43 points. Proportionately greater advances were secured by the S&P 400 and the Russell 2000. At the close, all 10 of the leading sectors were up and advancing stocks eclipsed losing issues by some seven to one.

Meanwhile, the momentum continued overseas, with equities posting gains across Asia in the overnight hours and doing the same so far in Europe this morning. Elsewhere, oil prices are higher; bond yields are; and our equity futures are up smartly. So, we would expect a possible encore today, as Wall Street easily surmounted this latest potential obstacle when the Fed did the expected. Now, the Street will turn its head toward the nation's Capitol, where things are not as stress free.  - Harvey S. Katz 

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