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After the Close - The U.S. stock market headed sharply lower this morning, but managed to pare its worst losses somewhat in the afternoon. At the close of the session, the Dow Jones Industrial Average was off 167 points; the broader S&P 500 Index was lower by 18 points; and the NASDAQ was down 31 points. The selling was widespread, as declining issues outweighed advancers by a wide margin on the NYSE. Indeed, there was nowhere to hide today, as all of the various market sectors lost ground. The basic materials issues led the market lower. The financial issues also fell out of favor. While there was no real strength in the market today, it should be noted that the utilities held up a bit better than other groups. This is not surprising as these stocks have become a safe haven for investors lately.

Technically, the stock market has had trouble making a sustained advance lately. This is disturbing, as it suggests that the bulls are either fatigued, or have turned cautious, and are unwilling to push stocks notably higher. The VIX, now at over 13, rose 8% today, indicating that some apprehension may be building, at least for now.

Meanwhile, traders received numerous economic reports this morning. Some of the news was positive. On the employment front, initial jobless claims dipped to 297,000 for the week ended May 10th. This reading was quite a bit better than had been expected. Continuing claims, too, improved. Elsewhere, inflation may be picking up just slightly, as consumer prices rose a bit in April. While stock investors may not be pleased with this, it may well suggest that the economy is gaining steam. However, there was one news item released today that may have been a source of concern to traders. Specifically, industrial production fell 0.6% in April, which was quite a bit weaker than had been anticipated.

Finally, it was a fairly busy day for earnings reports. Yesterday after the close, we heard from Cisco (CSCO Free Cisco Stock Report). That stock moved up a bit, after the networking giant put out a strong report. Today, Wal-Mart (WMT Free Wal-Mart Stock Report) released its quarterly metrics. That issue declined, after the retailer put out a disappointing figures. After the closing bell today, we will hear from technology concern Applied Materials (AMAT). - Adam Rosner

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

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12:00 PM EDT - Stocks are off sharply today on a notable slip in sentiment. Heading into the noon hour on the East Coast, the Dow Jones Industrial Average is down 164 points; the NASDAQ is off 48 points; and the S&P 500 is lower by 21 points.

Unexciting results from retailer Wal-Mart (WMT - Free Wal-Mart Stock Report), a sharper-than-expected drop in the nation’s industrial production in April, and a rise in core inflation have the turned the tables on the bulls, who earlier this week had been basking in the glow of record-setting performances on some of the major stock indexes.

The poor industrial production reading comes on the heels of weak data issuances on retail sales and first-quarter GDP. There have also been increasing concerns about the health of the global economy of late, particularly in Europe, where fresh data this morning showed a tepid 0.2% rise in first-quarter GDP for the euro zone. That translates into around a 0.8% annual GDP advance, which would not be enough to put a meaningful dent in the region’s high, long-term unemployment problem. And while Japan’s economy exhibited a sharp 5.9% rise in the first three months, that is being seen as a last hurrah as consumers spent big-time ahead of an impending rise in taxes.

Meanwhile, the selective pullback in the strength of the economic statistics has provide new life for bond prices, which have risen as their yields have fallen. The yield on the 10-year Treasury note was about 3.00% at the outset of the year, but has since fallen to below 2.50% as a result of the lack of a uniform follow-through in the nation’s business barometers. The takeaway for stocks has been an added dose of caution, with the defensive utilities sector outperforming for much of the year as interest rates have eased.

However, the day’s news is not altogether bad, with weekly initial unemployment claims falling below 300,000 and a manufacturing survey for the New York region pointing to strong growth in early May. Those pieces of data support the bullish case for stocks, and the premise that the economy will shake of the effects of the last winter’s deep freeze as the summer draws near.

Overall, the tone to trading is decidedly negative, as the transition to a stock market driven by strength in the economy from one supported by liquidity provided by the Federal Reserve is in question. -  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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10:45 AM EDT - A confluence of negative factors is now combining to drive the U.S. equity market sharply lower this morning. Of note, we have seen reports of sharper-than-expected declines in industrial production and factory usage for April, a surprising drop in builder's confidence, and a decline in manufacturing activity in the Philadelphia region.

Moreover, there have been some selective, but high profile, misses on the earnings front. All of this suggest that some doubts may be starting to emerge on the economic growth front during the current quarter. On point, it now seems as through growth in the current quarter, which we had felt might reach 3%, may fall a couple of tenths of a percentage point shy of that recovery mark.

All told, the Dow Jones Industrial Average is now off by 160 points; the Standard and Poor's 500 index is in the red to the tune of 20 points, or just over 1%, while the loss in the tech laden NASDAQ is approaching 50 points, or more than 1.1%.

But the biggest losses are in the small- and mid-cap sectors, where the small-cap Russell 2000, a big loser yesterday, is now down 20 points, or 1.8%, while the S&P Mid-Cap 400 is tumbling 22 points, or 1.6%. It is not very pretty out there for those long equities. - Harvey S Katz, CFA

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

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Stocks to Watch from The Survey Investors are digesting a number of earnings reports from high-profile companies. One of the biggest winners is telecom equipment maker Cisco Systems (CSCOFree Cisco Stock Report), which delivered better-than-expected April-period results and signaled that its recent downturn in demand may be coming to an end, offing a more upbeat outlook than most on Wall Street were anticipating. The stock is up notably ahead of the bell, as a result. Shares of automotive parts retailer Advance Auto Parts (AAP) are also indicating a higher opening this morning on earnings, but the good news largely ends there. Indeed, investors appeared to take issue with quarterly reports and/or outlooks from big-box retailers Wal-Mart Stores (WMTFree Wal-Mart Stores Stock Report) and Kohl’s (KSS), restaurant operator Jack in the Box (JACK), and precision instruments maker Agilent Technologies (A). All of these stocks are moving lower in pre-market trading, in response. – 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 - This has truly been an up-and-down week for stocks, even by the standards of recent weeks. Of note, after the market parlayed a pickup in merger activity on Monday to orchestrate a stellar advance and bring the Dow Jones Industrial Average to yet one more record high, the profit takers tiptoed back in on Tuesday. As this description suggests, the losses on Tuesday were halfhearted and did little to reverse things from the notably bullish start to the week. In fact, the Dow set another record, as that 30 stock blue-chip composite edged up some 20 points, offsetting weakness in the NASDAQ and the small-cap Russell 2000 Index. 

However, yesterday was another story. Once more, the market eased modestly at the start of the day and held in slightly negative territory for much of the session. But a repeat of just some half-hearted selling wasn't to be, and after a series of in-and-out moves over the course of the day, which amounted to little in the aggregate, the bears finally turned it on in the final hour of trading and took the market down to a fair-sized loss. At one point late in the session, it appeared as though equities were headed for an even more substantial fall, though the selling did ease off a bit during the final few minutes to prevent a greater setback.  

And, as has been the case in recent weeks, it was the NASDAQ (off 30 points) and the Russell 2000 (down 17 points, or 1.5%) that led the way lower. The Dow, though, was no shrinking violet, for a change, and its 101-point loss still worked out to 0.6% drop. The S&P 500 Index also shed about a half a percentage point. Few areas did well, save for the utilities and telecoms, which often run against the tide. More spirited declines were seen in the financials and selected tech issues.     

Meanwhile, some of this selling may well have been the result of a dour report on wholesale prices. Specifically, at 8:30 AM (EDT), the Labor Department reported that the Producer Price Index jumped by an outsized 0.6% in April, three times the 0.2% increase expected. Moreover, on a 12-month basis, the 2.1% rise was the most since a 2.4% full-year gain in March 2012. Still, one month does not make a trend, especially as most of the rise was accounted for by a surge in food prices, which, in turn, was the result of the very difficult winter, with its consequent damage to crops. But that should prove a one- or two-month affair.  

Elsewhere, there was a succession of mixed earnings reports, with quality farm equipment manufacturer Deere & Co. (DE) in the headlines. That giant industrial company issued somewhat downbeat results for the latest quarter, and the stock, which had been trading near its 52-week high, backtracked by a couple of percentage points. Shares of the retailer Fossil Group (FOSL), meantime, fell much more sharply on an unprepossessing outlook issued by management.

Now, as we look out to a new day, the economic drums are sounding once again, with the report out just minutes ago on consumer prices, the companion survey to yesterday's producer price data (see below). Also, in about a half hour, the Commerce Department will issue data on industrial production and factory use. Little overall change is expected in either of those releases.

Looking out overseas, following yesterday's softer showing on our shores, we find that the markets in Asia were lower overnight, hurt by the selling in New York and some strengthening in Japan's yen, while things are no better across Europe so far this morning, with the markets generally lower on downbeat growth figures on the Continent. As to our markets, the equity futures are showing little direction, with the Standard and Poor's 500 Index futures off by three points, but the NASDAQ futures showing a similar-sized gain, helped, no doubt, by strength in networking giant and Dow component Cisco (CSCO - Free Cisco Stock Report), as that blue-chip reacts to stronger earnings issued after the close yesterday. Cisco, which closed at 22.81 a share yesterday, is suggesting an opening of $24.50 this morning.     

Finally, there is the Consumer Price Index. That survey of retail inflation moved higher last month, gaining 0.3%, which was right in line with expectations. The increase, meantime, came principally on higher prices for food. Excluding food and energy, to get the so-called core rate of CPI growth, we find that the gain was a more modest 0.2%. Thus, yesterday's significantly larger PPI gain of 0.6% was likely a one-time event. - Harvey S. Katz

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