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After The Close - Stocks took the high road today, with the Dow Jones Industrial Average gaining 10 points; the NASDAQ, a more-impressive-on-a-percentage-basis 23 points; and the S&P 500, four points. The bullishness had depth, with gainers topping decliners by a wide margin on both the New York Stock Exchange and the NASDAQ. The modest advances came despite renewed tensions in Ukraine and a military coup in Thailand.

Better sentiment toward the retail sector helped performance toward stocks in general. A combination of weak results and tepid outlooks had weighed heavily on shares of retailers earlier this week, with a number of names on the new 52-week low list. But better-than-expected earnings reports from the likes of Dollar Tree (DLTR) and Best Buy (BBY) helped spark a bounce in the group today. Tech stocks and small-cap issues, two other areas that had experienced recent selling pressure, also did well.

Meanwhile, the morning’s economic news, while not overly bullish, supported the rally. Existing home sales for April came in about as expected, providing some assurance that homeowners unable to sell because they owe more on their mortgages than their houses are worth are not gridlocking the market.

As for mortgage rates, they fell for the fourth week in a row. Government-affiliated mortgage agency Freddie Mac reported that the average for a 30-year fixed home loan fell to 4.14% from 4.20% last week. A year earlier, the 30-year rate stood at 3.59%. The takeaway appears to be that, while the housing market is no longer going gangbusters, it is still providing support for the economy.

Elsewhere, gasoline prices are starting to inch down as the ``driving season’’ gets under way. Automobile club AAA said that current per-gallon prices of $3.65 were down two cents a gallon from a month ago. If that trend continues, as expected, it could mean more cash in consumers’ wallets.

Another positive, if lesser known, indicator came from the American Banker Index of Banking Activity, which rose to 59.5 in March. Readings above 50.0 point to expansion. The data confirmed the feeling that many bankers had about business conditions improving after the last winter’s bitter chill. Consumer lending led the way.

Tomorrow, the bond market closes early, at 2 PM EDT, ahead of the Memorial Day weekend. The stock market is open for a full session, although volume is apt to be light as traders get a jump on the holiday. A report on new-home sales for April is expected to show a moderate monthly rise. - Robert Mitkowski

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

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12:30 PM EDT - The U.S. stock market moved higher this morning, and has been able to maintain these gains. At just past noon in New York, the Dow Jones Industrial Average is up 15 points; the broader S&P 500 Index is ahead six points; and the NASDAQ is advancing 23 points. Further, the small-cap Russell 2000 Index is making considerable progress, in contrast to yesterday. This is encouraging, as it suggests that traders are willing to buy the less-conventional names, and that speculative sentiment, often necessary for bull rallies, may be returning to the market. Market breadth shows widespread buying of equities today, as advancing stocks are outnumbering decliners by roughly three to one on the NYSE. Most market sectors are advancing, with particular leadership in the healthcare area. The consumer services names are making progress, too. In contrast, the telecommunications issues are weak.

Technically, the market continues to consolidate. Notably, the current sideways movement is likely preferable to a sharper correction, yet still allows stock prices, and valuations, time to catch up with earnings expectations. Meanwhile, sentiment seems quite complacent, as the VIX is off slightly to 11.83 today.

Traders largely shrugged off today’s mixed economic news. Specifically, initial jobless claims came in at 326,000 for the week ended May 17th. This reading was sharply higher than the figure many economists had expected, and also exceeded the prior week’s reading. Meanwhile, existing home sales rose to 4.65 million units, annualized, in April. Although a healthy showing, some had hoped for a slightly stronger figure. Elsewhere, the Conference Boards’ Leading Indicators Index rose 0.4% in April, essentially meeting the consensus view.

Finally, traders continue to receive reports from numerous retail companies. Specifically, Best Buy (BBY) stock is up, as investors were generally pleased with that company’s figures. Too, Williams-Sonoma (WSM) put out strong results, sending that issue higher. - 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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Stocks to Watch from The Survey Retailers continue to dominate the earnings calendar, as April-period reports are flowing in at a steady pace. The two most upbeat releases appeared to come from discounter Dollar Tree (DLTR) and Williams-Sonoma (WSM), which sells goods for the kitchen and home. Both equities are moving nicely higher in pre-market trading, as a result. Wall Street was also encouraged by quarterly updates from Victoria’s Secret parent L Brands (LB), jeweler Signet (SIG), and NetApp (NTAP), a provider of systems, software, and services for storing, managing, protecting, and archiving business data. These equities are indicating modestly higher openings this morning, in response.

It was not all good news, however, and investors took issue with quarterly reports and/or updates from department store operator Sears Holdings (SHLD) and electronics retailer Best Buy (BBY), causing these stocks to move lower ahead of the bell, with SHLD showing considerable weakness.

On the M&A front, tobacco heavyweights Reynolds American (RAI) and Lorillard (LO) are reportedly in merger negotiations, a story that broke late yesterday. A marriage would likely create a powerful rival to industry leader Altria Group (MO) and help leverage Lorillard’s enviable position in the rapidly growing market for electronic cigarettes. British American Tobacco (BTI) would probably play a major role in any potential transaction, as it owns a 42% stake in RAI. Both stocks popped in late trading yesterday, with LO posting the larger advance. – Matthew E. Spencer

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

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Before The Bell - The stock market's give and take is clearly continuing. On point, after the equity market largely moved in place on Monday, with just modest overall positive bias, equities fell back notably on Tuesday, as cautionary comments about Federal Reserve monetary policy, and specifically about a possible stepped-up timetable for raising borrowing costs, unleashed a torrent of afternoon selling by the bears, which took the market down appreciably.

However, after that pullback had failed to bring on a corresponding wave of selling overseas before our markets opened for trading yesterday, our futures took the high road early, gaining nicely before the start of live trading on our shores. That comeback then continued, even gaining momentum after the commencement of trading, with the Dow Jones Industrial Average quickly moving out to a triple-digit point gain after about a half hour, or so, of trading, adding more than 160 points at the morning's peak. However, the leading indexes, which did not fare as well as the Dow at any point in the session, failed to hold all of their early increases.

In fact, around lunch time, the S&P Mid-Cap 400 Index dipped nominally into the red, while the major small-cap benchmark, the Russell 2000, fell a bit more firmly into the minus column, losing more than four points at its nadir. But the bulls quickly righted the ship and green arrows were again back in vogue on each of the major composites. Most individual groups also fared well, with the Dow never threatening to give up its triple-digit advance.

Behind this latest reversal of fortunes was apparently some rethinking of the prior session's bearish talk about interest rates from a regional Federal Reserve Bank President. His comments essentially noted that the housing market was doing nicely enough that the lead bank could start thinking about raising interest rates sooner rather than later. Any thoughts in that regard are often a signal to shake things up in the equity market. However, by yesterday, it seemed, that calmer heads were again prevailing.

Of note, this firmer subsequent market undertone was attributable, we sense, to the release of the Fed minutes from its late-April FOMC meeting. In essence, the central bank focused on its eventual exit from its aggressive several-year-long program of monetary accommodation. Fed officials examined "several approaches" for the eventual tightening of monetary policy, but made no decisions on which tools to employ in that regard, or when to do so. Officials, moreover, emphasized the need for flexibility. Our thinking is that the lead bank danced around the issue of a timetable, so as to not box itself in. And that approach is what Wall Street likely was hoping to hear at this time.     

Helped by the soothing minutes, and the Fed's well-conceived vagueness, but held at bay by less-than-compelling quarterly profit reports from some high-profile retail chains, the market managed to move forward on a bullish adventure in the afternoon, with the stock market pushing up to its session highs as the clock ticked down to the close of trading at 4:00 PM (EDT). By the end of day then, the Dow was ahead by 159 points, or nearly one percent, to end the session above 16,500. The Standard and Poor's 500 Index was up by 15 points, while the NASDAQ was better by 35 points. The small- and mid-cap indexes fared less well, on average, with gains of just about a half a percentage point.

Meanwhile, all of this was going on in a near economic news vacuum, with just the issuance of the Fed minutes being of any note. That will now change over the final two days of the trading week, with data looming in about an hour from now on sales of existing homes in April. Then, tomorrow, the Commerce Department will weigh in with the companion release on sales of new homes. This latter market is much smaller than the re-sales category, and notably more volatile from month to month. Increases in both areas of the housing market are anticipated.

As to other news, we are seeing that stocks in Asia were mostly higher, albeit with some outliers, overnight, led forward by Japan's Nikkei. In Europe, meantime, we are seeing some choppiness, with a reasonably decent purchasing managers' survey on business activity in the euro zone being countered by some heightened tensions again in Ukraine. Finally, over here, our futures are just slightly in the plus column after the selective bullish fireworks yesterday. - Harvey S. Katz   

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