After The Close - Stocks made minimal progress today, which is understandable, given the level the market has reached lately. At the end trading, the major averages closed on a mixed note. Specifically, the Dow Jones Industrial Average was ahead 31 points; the broader S&P 500 Index was down four points; and the NASDAQ was higher by just about one point. Market breadth showed a divided session, with advancers just about even with decliners on the NYSE. From a sector perspective, the basic materials issues and financial stocks displayed leadership, while the healthcare names and utility stocks moved lower.
Meanwhile, a couple of notable economic news items were released this morning. Specifically, the nation’s trade gap narrowed to $52.5 billion during the month of September, which was in line with expectations. In addition, the ISM Non-Manufacturing Index edged up to 54.7 during the month of October, which was a better-than-anticipated figure. Tomorrow, the preliminary third-quarter productivity numbers will be released, as well as the latest week’s crude oil inventory figures.
In the corporate arena, the third-quarter earnings season continues. Shares of The Kroger Co. (KR) moved higher today, after the grocery store operator delivered a good report. Things did not go as well for Shake Shack (SHAK). Investors were disappointed with the restaurant company’s outlook, and the stock moved sharply lower, as a result.
Technically, the market has made considerable progress lately. The third-quarter earnings season has not been too bad, so far. Further, it seems that trade relations between the U.S. and China may be starting to improve, but very slowly. – Adam Rosner
At the time of this article’s writing, the author did not have positions in any of the companies mentioned.
Before The Bell - The momentum from last Friday's big win ion Wall Street, in which the Dow Jones Industrial Average soared by 301 points, carrying that index to the doorstep of an all-time record, carried over to yesterday morning. Indeed, right from the start, the market drove forward, securing further nifty gains on earnings optimism and a sense that the recent moves by the Federal Reserve to cut interest rates will help carry the economy on its back to further modest gains in the coming quarters. A reassuring jobs report issued last Friday also helped.
Another positive for the market was continuing optimism regarding the possibility of a near-term trade deal with China. Hopes persist that a so-called Phase 1 accord can be signed in the coming weeks. Securing a longer-term understanding will be more difficult and time consuming. In any event, the bulls were out in force early on and within minutes after the open, the Dow was up by 170 points. The other indexes also were pressing higher, with the NASDAQ ahead about 65 points.
As noted, in addition to the ongoing upbeat sentiment on trade, the Street was celebrating the rather good jobs news issued last Friday. On point, not only was there some affirmation that the labor market was not slowing, but actually that it was strengthening a bit, with the 128,000 positions added in October notably more than the 85,000 generally forecast. Moreover, employment tallies for both August and September were revised higher, while wages continued to rise, if incrementally.
As to the latest day's action, the market continued to hold solid gains after the initial advances were registered early in the session, with the Dow generally holding increases of 100-150 points. To be sure, there was some profit taking noted just after 3:00 PM (EST), but that pullback, which brought the late-afternoon blue chip gain to fewer than 70 points, was just momentary. Indeed, as the final minutes ticked downward, the buying resumed, and we would close near the day's highs, with all three of the major averages in record territory.
The stock market, as noted, would finish matters with strong gains, led by the Dow which would add 115 points, the S&P 500 Index; which would climb 11 points; and the NASDAQ, which would leap ahead by 47 points. Also gaining was the small-cap Russell 2000, which would tack on eight points. Bond yields, too, would edge upward, with the return on the 10-year Treasury note inching up to 1.79%. Clearly, the excitement that has come about since the start of November persists.
Now, a new day begins, and for some idea as to whether the spirited early November market run to new highs will continue, we see that stocks were higher in Asia overnight on trade optimism, while in Europe, the major bourses are pressing forward at this hour. Elsewhere, oil prices are climbing on that same trade optimism and Treasury note yields are edging upward. Finally, as the focus remains on the economy, trade, and earnings, the U.S. futures are pointing to additional gains for the equity market. - Harvey S. Katz, CFA