After The Close - The stock market opened sharply higher this morning, extended its early gains through much of the afternoon, but then softened into the close. Of note, earlier today, Wall Street seemed optimistic that some progress would result from the current round of negotiations taking place between the United States and China. Later in the day, it was reported that some positive steps had actually been achieved. By the end of the session, the Dow Jones Industrial Average was up nearly 320 points; the broader S&P 500 Index was ahead 32 points; and the NASDAQ was higher by 106 points.

Market breadth showed widespread support for equities today, as winners outnumbered losers by an overwhelming margin on the NYSE. All of the major market sectors forged ahead, with notable strength in the industrial, technology, and basic materials issues. In contrast, the defensive utility names lagged the other sectors, as traders seemed willing to move capital into more dynamic stocks.

There were just a few economic reports released today. Specifically, export prices dipped 0.2%, while import prices rose 0.2%, during the month of September. These numbers did not comes as much of a surprise. Meanwhile, the University of Michigan’s Consumer Sentiment Index registered a preliminary reading of 96.0 for the month of October, which was a solid showing.

In the corporate arena, it was a relatively quiet day for reports. However, we did hear from Fastenal (FAST). Shares of the construction products company were up sharply in response to a better-than-anticipated release. Looking ahead, the third-quarter earnings season will soon be in full swing. Early next week, many large banks and financial companies are slated to weigh in with their numbers.

Technically, the stock market came roaring back today, putting the S&P 500 Index not too far from the 3,000 level. The bulls seem to be back in control, for now, but looking ahead Wall Street will likely want to see that progress is being made on the trade front, as well as some upbeat earnings reports.  - Adam Rosner

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


 12:05 PM EDT - The President has intoned that good things are happening in the trade talks with China, and the bulls are running with those comments and driving the stock market sharply higher as the traders ready themselves for the lunch hour on Wall Street. In fact, as the noon hour approaches, the Dow Jones Industrial Average is knocking on the door of a 500-point advance.

And it is not just the Dow, which is up 1.8%, but the S&P 500, which is ahead by 51 points (also 1.8%), and the NASDAQ, which is surging by 133 points (or 2.0%) that are fueling the rally. All arrows are green as gaining stocks are overwhelming declining issues as the morning concludes.

To be sure, we are not talking of a wide-ranging deal on trade with China, but rather a limited accord. Still, is such a partially satisfactory outcome emerges, the increases in tariffs promised by the United States might not occur. Our economy, which is under some increased pressure these days, would clearly get relief should tariffs not go higher.     

The President's comments that the talks are going well has sparked solid gains in the tech sector, which explains the NASDAQ's strength, and particularly the chip arena. Meanwhile, in addition to the good trade news, the market also is getting a lift as the University of Michigan Consumer Sentiment Index came in higher than expected this morning.  - Harvey S. Katz, CFA

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


Before The Bell - After marked selling early in the week and a nice comeback in trading on Wednesday, the equity futures pointed to a weaker stock market opening yesterday. And, in fact, for a minute or two stocks did head lower. Then, the President indicated that he would be meeting with China's Vice Premier today, and the market turned on a dime and headed sharply higher. It seems that the back and forth on the trade front is still the major issue for Wall Street. So, when optimism builds, equities make a run to higher ground. And when pessimism returns, stocks fall.

Thus, after those remarks, the Dow Jones Industrial Average pushed ahead to a session best gain of nearly 260 points. Stocks then would maintain solid improvement for the remainder of the session's first half. With three of the major economic issuances already out for the month in reports on manufacturing, non-manufacturing, and employment, with inflation data (e.g., producer (wholesale) and consumer prices) still muted, and with earnings reports for the third quarter still a few days, or more, off, the focus remains on trade. And the news yesterday morning was better, and stocks gave a good account of themselves.

Meanwhile, the next issue for Wall Street to ponder, even as the situation with China is likely to remain unresolved for some time, will be Federal Reserve. The nation's central bank, which already has lowered interest rates twice so far this year, will be meeting in less than three weeks. And expectations are building toward a third rate reduction at that time. But the main impetus was trade and stocks rebounded on those preliminary hopes for at least a partial agreement. As noted, this upsurge would last the morning, but fade somewhat as we passed the noon hour in New York.

The pullback then would continue into the afternoon, with the Dow's advance wilting to below 100 points for a spell before that composite and the other averages got a second wind as we entered the home stretch, with the Dow soaring again to a gain north of 160 points. As earlier in the day, it was optimism that the pending get together with China would garner some positive results. We shall see on that count. In any event, the late rally would continue into the close, although there was no serious attempt to better the early gains secured after the first blush of optimism on trade emerged.   
When the final tallies were in, we saw that the Dow Jones Industrial Average was up 151 points; the S&P 500 Index was better by 19 points; and the tech-driven NASDAQ, boosted by a better-than-three point advance in shares of tech-icon Apple (AAPL Free Apple Stock Report) rose 47 points. Also doing better was the advance-decline line, while Treasury note yields rose along with oil prices. In sum, it was a solid day for the bulls, ahead of the release later today of the latest survey on consumer sentiment from the University of Michigan. That report aside, trade discussions and rumors with regard to China will likely be the deciding factor for the stock market today.     

As to the day ahead, stocks were strongly higher in overnight dealings in Asia on optimism about a U.S.-China trade deal; in Europe, meantime, the leading bourses are trending nicely upward thus far this morning. In other news, oil price are up sharply after Iran said that two missiles had struck one of its tankers and Treasury note yields are climbing anew. All of this points to a higher opening for Wall Street when trading resumes later this morning.  - Harvey S. Katz, CFA

At the time of this article’s writing, the author held positions in one or more of the companies mentioned.