Market Close - Investors turned cautious today with worries about an escalation of tensions of Russia’s annexation of Crimea in the backdrop. At the close, the Dow Jones Industrial Average was down 26 points, after a late attempt to rally fell short, and the NASDAQ suffered a 50-point drop on a retreat in technology and biotech shares. Market breadth was weak, with most stocks falling.

There wasn’t a lot of economic data to go around today and earnings season is a couple of weeks away. As a result, the spotlight shifted to a degree to the biggest conflict between the United States and Russia since the Cold War ended more than 20 years ago. The concern is that a ramping up of sanctions could hurt international trade, particularly in Europe, where our allies may feel duty-bound to go along with U.S.-led initiatives. Europe is only now slowly emerging from a damaging recession. The need for sanctions on Russia is apparently related to worries that the Kremlin may try to use its just-won position in Crimea as a wedge to gradually gain control over Ukraine—the original prize.

There may also be a bit of a back-to-reality feeling among traders previously assuming the Federal Reserve was not even close to thinking about raising interest rates. Fed Chair Janet Yellen last week tentatively set out a possible mid-2015 timeline for hiking short-term rates.

The toned-down reaction to stocks in the latest session comes after a spectacular run-up to a number of stocks trading on the NASDAQ. In the biotech space, shares of Alexion Pharmaceuticals (ALXN) fell sharply on profit-taking. Meanwhile, high-flying social media stocks Facebook (FB) and Twitter (TWTR) also lost altitude.

Stirring up the pot elsewhere among NASDAQ-traded issues, negotiations over a deal between Apple (AAPL) and Comcast (CMCSA) hurt the shares of Netflix (NFLX).

But there were a few notable winners. Shares of Nu Skin (NUS) jumped when the marketer of personal care items received a lower-than-expected fine from regulators in China. Shares of Herbalife (HLF) advanced nicely, as well, after it was revealed the investor Carl Icahn’s group would receive more board representation.

Looking at the big picture, although it was far from a red-letter day for the market, stocks still have to be viewed as in a broad uptrend. That is clear from the number of IPOs set to price. At least 10 companies have their sights set on becoming publicly traded this week. That is a sign that demand for equities continues to be strong. - Robert Mitkowski

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


12:15 PM EDT - The U.S. stock market has encountered some selling this morning, and it remains to be seen if the major averages can reverse their course during the afternoon. At just past noon in New York, the Dow Jones Industrial Average is off 60 points; the broader S&P 500 Index is lower by 13 points; and the NASDAQ, which is quite weak in particular, is declining 69 points. Market breadth suggests some underlying weakness to today’s session, as declining stocks are outnumbering advancers by roughly two to one on the NYSE. It should be noted that these statistics are much less favorable on the NASDAQ. Many market sectors are in negative territory, with sharp losses in the healthcare area. Within this sector, the biotechnology issues are headed lower. The technology group is also an area of weakness. In contrast, the energy stocks are bucking the downtrend today, as there are small gains in some of the oil and gas names. The high-yielding utility stocks are also holding up relatively well.

Technically, the market has encountered some resistance lately, as moving into new high ground has proven to be a challenge. Today’s move lower, puts the broad index back at the 1,850 area. It remains to be seen if the bulls can mount a push higher from here. The next catalyst needed to drive the market higher may come from the corporate sector. With the first quarter now coming to a close, we will, no doubt, be watching for any corporate pre-announcements, as this may provide insight into the direction of the upcoming earnings season. The VIX is trading about 5% higher, to about 15.79, suggesting traders are feeing some unease.

Investors received few notable economic reports this morning. But, the news will pick up tomorrow, as we will receive the Case-Shiller Home Price Index figures for December, new home sales for February, and the Conference Board’s consumer confidence report for March.

Meanwhile, we received very few notable earnings releases this morning. However, shares of Nu Skin (NUS) are trading higher, as that company released some favorable news concerning its business in China.

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 Survey There isn’t much news on the earnings front this morning, but there are still issues that will likely see active trading today. Most notable is the stock of Nu Skin Enterprises (NUS), which is soaring in the premarket, after the distributor of personal care and nutritional products announced the results of its review by regulators in China. The inquiry ended with a small fine levied on Nu Skin and seemed to remove a large overhang from the equity. Shares of another nutritional supplements maker, Herbalife (HLF), are also indicating a higher opening this morning, on news that the company has agreed to add three more designees of activist investor (and Herbalife’s largest stockholder) Carl Icahn to its board of directors. Additionally, shares of St. Jude Medical (STJ) are up moderately ahead of the bell, after the medical devices company received FDA approval for three of its pacemakers. Finally, Apple (AAPL) stock is up slightly in pre-market trading, likely due to news reports that the computer and personal electronics giant is in talks with cable company Comcast (CMCSA) about creating a streaming television service. – 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 - The new trading week is set to kick off stateside with investors looking to build off a constructive, albeit at times choppy, five-day stretch on Wall Street. Indeed, the major U.S. equity indexes overcame a couple of pronounced selloffs last week, and in the end the Dow Jones Industrial Average, the NASDAQ, and the broader S&P 500 Index managed respective gains of 1.4%, 0.7%, and 1.4%. Friday’s session saw the major averages higher at the start, with the exception of the tech-heavy NASDAQ, before selling picked up to pare all of the gains and then some by the closing bell. Overall, advancers led decliners on the NYSE, while the opposite held true on the NASDAQ.

Right now there are a few hot-button topics that are influencing trading both here and abroad. The ongoing geopolitical tensions between Russia and Ukraine (see below) and some hawkish statements from a few top Federal Reserve officials—even new Chair Janet Yellen, a noted dove, hinted that short-term rates could be higher in 2015 if the economy, and more so the labor market, were to cooperate—are driving trading these days, especially with earnings season a few weeks from beginning in earnest. The absence of earnings news, a pickup in economic reports this week, and the aforementioned topics may lead to some more volatility in the market—one that still looks extended—this week.

Speaking of the U.S. economy, the new week will bring a number of important reports. After a quiet day to start the week, we will receive three notable reports tomorrow, with data due on personal income and spending, new home sales, and consumer confidence. All three reports will be closely scrutinized by investors, as the consumer and housing sectors are responsible for the lion’s share of the nation’s economic output. Also this week, we will get data on durable goods orders (Wednesday), the final revision to fourth-quarter 2013 GDP (Thursday), and the University of Michigan’s consumer sentiment figures.

Meantime, the trading overseas has been mixed so far today. Asia’s major indexes moved higher overnight, while the European bourses are weaker as trading moves into the second half of the session on the Continent. Pushing equities lower in Europe were mixed international economic data. Specifically, the composite purchasing manager’s index for the euro zone came in slightly weaker than expected (53.2 versus 53.3 in the prior month), with Germany falling short of expectations and France exceeding forecasts. Overnight in Asia, data from HSBC showed that its preliminary China manufacturing purchasing manager’s index fell to an eight-month low. However, Asia’s major market averages rose on expectations that China will implement a series of policy measures to stabilize growth in the world’s second-largest economy.

With less than an hour to go before trading commences on these shores, the U.S. equity futures are presaging a modestly higher opening for our market. That said, we would not be surprised if it turned out to be a volatile day on Wall Street, with both the bulls and the bears flexing their muscles at times. As noted, the unsetting situation in Ukraine remains a headwind for the international equity markets. Just this morning, reports surfaced that Russian troops took control of a Ukrainian naval base in Crimea, marking the third attack on a Ukrainian naval base in the last two days. Stay tuned.   - William G. Ferguson

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