Stock Market Today: March 28, 2013
After The Close - The stock market put in another record-breaking session today to end the first quarter. The market saw some strength in the afternoon. Buying in the latter part of the session is always a bullish sign, as it displays commitment to the rally. At the end of the day, the Dow Jones Industrial Average was up 52 points (0.4%); the S&P 500 Index was higher by six points (0.4%); and the tech-heavy NASDAQ tacked on 11 points (0.3%). Market breadth was positive, with advancing stocks outnumbering decliners by roughly 2 to 1 on the NYSE. Most of the market sectors made contributions, with leadership in the healthcare, transportation, and consumer non-cyclical names. However, there was some weakness in the consumer cyclical stocks and in the basic materials issues. Notably, there has been sector rotation, as the materials issues have lagged the broader market for the past few months, with severe weakness in the coal miners and the steel producers.
As noted, the S&P 500 hit a milestone today, breaking into record high territory and surpassing the 1,565 level hit in 2007. The widely-watched index had been locked in a trading range for the past couple of weeks, and today’s move, which came on the last trading day of the first quarter could signal the start of a breakout to new high ground. Meanwhile, sentiment has probably become “overly bullish” as the VIX headed lower to just below 13.
Investors shrugged off some mixed economic reports released this morning. Specifically, initial jobless claims for the week ended March 23rd came in at 357,000, a bit higher than analysts had been expecting and up from the 341,000 claims logged in the prior week. Notably, investors tend to look at claims above the 350,000 level as a sign of sluggishness. Elsewhere, the final reading on GDP for the fourth quarter of 2012 came in at 0.4%, which was slightly less than had been anticipated, but an upward revision nonetheless. Also, the Chicago PMI, which measures economic activity in that region of the country, was a bit softer than analysts had forecast. Tomorrow, we get a look at personal income and personal spending for February, as well as the final March figure for the University of Michigan’s Consumer Sentiment Survey.
There were a few corporate reports worth noting. Blackberry (BBRY) stock rose, but then retreated, after the mobile device maker put out better-than-expected profits on a weaker top line. Also in technology, Red Hat (RHT) stock headed higher after the company put out a decent release. All eyes will now be on the upcoming first-quarter earnings season set to start shortly, as this could be a catalyst for the market one way or the other. Stay tuned. - Adam Rosner
At the time of this article’s writing the author did not have positions in any of the companies mentioned.
12:30 PM EDT - Wall Street, a clear winner in the first quarter, with strong gains across the board, is apparently intent on finishing up the period on a high note, as well.
Thus, as we proceed past the noon hour along the East Coast on the concluding session of this quarter, we find the Dow Jones Industrial Average is perched atop another all-time high, gaining 43 points so far today, to 14,569. And, that 30-stock composite is finally being joined by the Standard and Poor's 500 Index, which has broken through the peak set in October of 2007, when the stock market and the world were quite different. The S&P is up four points, to 1,567. Not to be outdone, the NASDAQ, after a shaky start today, is now up by four points as well, trading at 3,260. However, that tech-heavy composite is some 2,000 points off of its premier all-time level, set during the ballyhoo days of 2000. For the year to date, the Dow is better by 11%; the S&P is higher by 10%; and the NASDAQ is better by almost 8%.
Meanwhile, the small and mid-cap names are also pressing higher, with the S&P Mid-Cap 400 advancing by better than four points, while the small-cap benchmark Russell 2000 Index is up by about a point.
The gains are coming. seemingly, on some optimism that at least a mild cure can be effected for Cyrus, the latest debt-encumbered member of the fragile euro zone. Also, the better Wall Street showing is evolving notwithstanding a somewhat disappointing final revision of fourth-quarter GDP in our country, with the U.S. Commerce Department reporting that the nation's GDP rose by at a scant 0.4% in the fourth quarter of last year. That was better than the initial revision, which had shown a tepid 0.1% gain, but it was less than the expected increase of 0.6%.
As to the overall equity market on our shores, we are seeing some healthy gains up and down the Big Board, as that composite is showing a solid plurality of gainers over decliners to the tune of better than three to two. However, the ratio of winners over losers on the NASDAQ is a more pedestrian 12 to 10.
Among the standouts today, we are seeing some strength in Cliffs Natural Resources (CLF), which had been a big loser yesterday on brokerage house ratings downgrades. At the same time, basic materials peer U.S. Steel (X) is pressing still lower today. That issue has been among the relatively few weak performers in the fast-concluding quarter.
Two of the larger names, which have had differing performances during the initial three months, with Apple (AAPL) plunging in price, while Google (GOOG) recently pushed to a new high above $800 a share, are both headed notably lower today. It has continued to be a different story for the drugs, however, with a trio of large-cap issues, notably Bristol-Myers Squibb (BMY), Merck (MRK – Free Merck Stock Report), and Pfizer (PFE – Free Pfizer Stock Report) all gaining ground so far today, and posting new 52-week highs in the process.
On balance, it is shaping up as another good day for the bulls, a group of intrepid optimists, who have parlayed generally better economic metrics and strong profit growth across Corporate America into a stellar early showing in 2013. Please note that the financial markets will be closed tomorrow in observance of Good Friday. - Harvey S. Katz
At the time of this article's writing, the author had positions in PFE
Stocks to Watch from The Survey – There is a bit of earnings news out today. A surprise profit in the February quarter was not enough to lift shares of BlackBerry (BBRY), as investors appeared disappointed with other aspects of the smartphone maker’s release, such as a larger-than-anticipated decline in the subscriber base. Investors are also showing displeasure with quarterly reports and forward-looking outlooks from apparel company PVH Corp. (PVH), software developer Red Hat (RHT), video game retailer GameStop (GME), consulting company Accenture PLC (ACN), building materials supplier Texas Industries (TXI), and payroll accounting services provider Paychex (PAYX), as all of those stocks are indicating lower openings this morning. It was not all bad news, however, as the shares of athletic footwear and accessories retailer The Finish Line (FINL) and crop nutrient and animal feed producer The Mosaic Company (MOS) are up ahead of the bell on earnings news. – 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 U.S. stock market gave some ground yesterday, but did manage to come back from a large early session loss that had seen the Dow Jones Industrial Average shed some 120 points at the session's low. Once again, it was concerns over Cyprus that took the measure of the bulls, especially early in the day.
With that initial sharp selloff, which was largely erased as the day wore on, the Standard and Poor's 500 Index, which has been in sight of an all-time high set back in October 2007, has not yet been able to break through. However, with yesterday's nominal final setback of just under a point, the S&P is now just about three points from its best level ever. All told yesterday, in addition to the S&P, the Dow shed 33 points, but the NASDAQ inched ahead by four points. Winning and losing stocks, meanwhile, were in overall balance, with a few more gaining issues on the Big Board and a few more losers on the NASDAQ. It basically was a non-eventful day in what is shaping up as a somewhat volatile, but not yet very telling, holiday-shortened week. Please note that the financial markets will be closed tomorrow in observance of Good Friday.
As to Cyprus, the event of note on Wall Street these days, that nation's banks have reopened this morning after a near-two-week shutdown, while the country negotiated a bailout agreement with its international creditors that will see a number of large depositors lose a good deal of their money.
As to the global markets, they have taken this news largely in stride, as the European bourses, namely the London FTSE 100, the Paris CAC-40, and the Frankfurt DAX, are all up nominally thus far today. As to our futures, they are also telling a somewhat better story now, having reversed some moderate losses earlier in the morning. As such, we should head a bit higher in the early going, as the S&P 500 Index seeks to post an all-time high.
As to the day ahead, following a general news vacuum yesterday, the markets are now having to digest some key releases made within the past few minutes, namely a final revision to fourth-quarter GDP growth and surveys on weekly and continuing jobless claims.
In the former case, the nation's gross domestic product, which had been initially estimated to have fallen by 0.1% in the final three months of 2012, was at first revised to show a nominal gain of that magnitude. Now, after consensus estimates had put the final revision at 0.6% growth, the government has chimed in with an estimated GDP increase of a modest 0.4% for that period. At the same time, the Labor Department reported that weekly jobless claims rose to a seasonally adjusted 357,000 in the latest seven-day stretch, an increase of 16,000 from the previous week. However, continuing claims came in at 3,050,000. That was a decrease of 27,000 from the preceding week's total. These metrics have not disturbed the modest strength in the futures now being shown.
Overall, then, as noted, it should be a somewhat better opening to the markets when equity trading begins again 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.