After The Close - The stock market got off to a tentative start this morning, but managed to shape up nicely as the session progressed. At the close of trading, the Dow Jones Industrial Average was up 42 points; the broader S&P 500 Index was ahead nearly five points; and the NASDAQ was higher by 16 points. Market breadth was positive, with winners leading losers on the NYSE. From a sector view, the technology names and consumer non-cyclical stocks pressed ahead. In contrast, the basic materials issues declined today.
Meanwhile, traders received limited economic news this morning. However, it should be noted that in the early afternoon, the FOMC released the minutes from its September meeting. While some members of the Federal Reserve commented on inflation, the general interest-rate outlook seems to be largely unchanged. Tomorrow, we will get a look at the producer prices for the month of September. The initial weekly jobless claims will also be released. Further, the EIA will report the weekly crude oil inventory levels.
Finally, in the corporate arena, third-quarter earnings season is starting up. Of note, shares of BlackRock (BLK) advanced today, after the asset management firm delivered a solid set of numbers. Tomorrow we will hear from banking giants JPMorgan Chase (JPM – Free JPMorgan Stock Report) and Citigroup (C).
Technically, the stock market continues to press ahead, even with equities at elevated levels. Traders may be hopeful that the third-quarter earnings season will hold some positive surprises, and that Washington can deliver on its plan for tax reform. - Adam Rosner
At the time of this article’s writing, the author did not have positions in any of the companies mentioned.
12:20 PM EDT - The day started out in choppy fashion, with stocks dipping in and out of the red during the first two hours of trading before firming slightly as the mornings wound down.
As we pass the noon hour in New York, the Dow Jones Industrials were ahead 10 points, supported by shares of McDonald’s (MCD – Free McDonald’s Stock Report) and Johnson & Johnson (JNJ – Free Johnson & Johnson Stock Report), both of which are up over a percentage point. Should the blue chips hold on, it would make for the 48th record close this year. Meanwhile, the broader S&P 500 stock index was right around the unchanged mark, while the tech-heavy NASDAQ was up by five points. Looking at the sector breakdown, it was an even split between advances and declines. Consumer noncyclical, utilities, and technology shares led to the upside, each gaining about a quarter percent. At the other end of the spectrum, basic materials were down nearly half a percentage point while telecommunications were off around a third of a percent.
Elsewhere, oil prices have edged down a little, to about $50.75 a barrel despite OPEC raising its outlook for demand next year. The commodity has rallied this week amid speculation that OPEC’s production accord would be expanded to include other members. Also, Saudi Arabia announced it would ease back on supply next month.
Checking the European bourses, trading there was also mixed. Germany’s DAX managed a small gain, while the U.K.’s FTSE and France’s CAC-40 were just shy of breakeven. Earlier this morning, stocks in Japan had their highest close in more than two decades.
Looking ahead, the Federal Reserve is scheduled to release the minutes from its September meeting at 2:00 PM Eastern time. But the market’s attention will likely remain occupied with earnings season. Key reports over the next two days include Citigroup (C) and JPMorgan Chase (JPM – Free JPMorgan Chase Stock Report) tomorrow, followed by Bank of America (BAC) and Wells Fargo (WFC) on Friday. Friday will also bring the latest reports on retail sales, consumer sentiment, and the Consumer Price Index. - Mario Ferro
At the time of this article's writing, the author did not have positions in any of the companies mentioned.
Before The Bell - Following a strong opening to October last week, the stock market got off to a laboring start on Monday, a semi-holiday affair, given that many business were closed to celebrate Columbus Day. But this modest downtick, like most that have gone before it this year, proved to be a short-lived setback. Indeed, stocks emerged from the starting gate rather quickly yesterday, and within minutes, the Dow Jones Industrial Average had risen to another all-time high of 22,850. The NASDAQ, too, leapt ahead, crossing the 6,600 mark in an encompassing early session win for the empowered bulls.
Behind the early surge, as Wall Street awaits the start of third-quarter earnings reporting season, was the announcement by retail giant and Dow component Wal-Mart Stores (WMT - Free Wal-Mart Stock Report) that the consumer behemoth would buy back some $20 billion in stock. That issue surged on the news, rising some 4%, a large move for this blue chip. Also, of note, drug making stalwart and fellow Dow member Pfizer (PFE - Free Pfizer Stock Report) said it was thinking of selling or spinning off its consumer healthcare business. That stock, however, moved little, in response.
Meanwhile, the early strong gains could not be sustained, and as the morning progressed, the Dow's gain was halved, while the NASDAQ was flirting with red ink for a time, as concerns about politics in Washington and corporate results took some toll on a market that has been unkind to the bears this year, to say the least. As to Corporate America, the early sense is that earnings will increase nominally for the recent period, gaining no more than about 3%, held back by large property and casualty losses in the insurance industry. Save that pressure, earnings would probably have risen more than 4%.
As we moved toward the noon hour, meantime, the market seemed to get a second wind, especially on the Dow, which firmed up anew. However, the improving trend barely affected the NASDAQ, which while paring its midday loss of 18 points, still hadn't made it back into the black by mid-afternoon. Interestingly, in addition to the aforementioned Wal-Mart, several of the out-of-favor food processing stocks rebounded some from recent losses, while a number of heretofore strong technology names eased off modestly. So, sector rotation appeared along with selective profit taking.
The market continued to steady itself as the final minutes ticked down, with the Dow retaining a healthy gain, after spending much of the afternoon with gains ranging from 50 to 60 points. The S&P 500, too, stayed positive, while the NASDAQ, after being slightly lower for much of the afternoon, edged back into the black. The S&P Mid-Cap 400 and the small-cap Russell 2000 also eked out small gains. In all, at the close, the blue chip composite was better by 70 points. Thus, it seems as if Wall Street is willing to give the bulls the benefit of the doubt in awaiting the start of reporting season this week.
Looking out at a new day, we see that shares in Asia were generally higher in overnight dealings, while in Europe the early read on the major bourses is more mixed. Also, oil, a winner yesterday on word that Saudi Arabia would be paring output going forward, is gaining again in early postings. Meantime, Treasury yields, off yesterday after big gains last week, are now up a bit. Further, our futures are following up yesterday's generally modest move higher by the market, with small losses at this hour. Going forward, the story this week figures to be earnings. Also, the economy will get a good hard look as the Commerce Department reports on retail sales on Friday. - Harvey S. Katz, CFA