After The Close - Most U.S. equities enjoyed another run up on Tuesday, which, following a mid-morning challenge by the bears, persisted into the final hour. Positivity stemmed from Treasury Secretary Steven Mnuchin's “hopeful” comments that tax reform would be implemented by the end of the year. Also contributing to the overall bullish undertone to the day were the moderated outlooks for both Hurricane Irma’s damage and tension between the United States and North Korea.
Among the major indexes, the Dow Jones Industrial Average and S&P 500 performed the strongest. The Dow 30 saw its gains driven by its financial and construction components, while the broader S&P 500 Index inched ever closer to the 2,500-point threshold. The tech-laden NASDAQ was markedly more up-and-down today, however, moving in tandem with Apple (AAPL – Free Apple Stock Report), which seesawed in the afternoon as investors digested a pair of new, high-profile product releases.
Meanwhile, crude oil rose $0.16 per barrel, to $48.23, after OPEC revealed production from its members dropped in August. This is the first such decline since March, and contributed some cautious optimism to the energy market, which has struggled to post a prolonged recovery amidst global oversupply concerns. Also helping to stoke positivity here was the relatively muted refinery impact stemming from Hurricane Irma, a development investors feared would exacerbate the fallout from the region’s Hurricane Harvey-caused damage. Tomorrow, weekly figures from the Energy Information Administration (EIA) will offer more tangible data on the storms’ initial bearing.
So while the indexes, particularly the NASDAQ, saw their gains pared as the afternoon progressed, today’s session definitively went to the bulls. Market breadth favored advancing stocks by a steady 1.6-to-1.0 ratio, with the market sectors mostly showing aggregate gains on the day. Looking forward, a slate of economic data will factor into the rest of this week’s trading. Specifically, the Producer Price Index reading for the month of August and the aforementioned EIA weekly update is due tomorrow morning. Likewise, investors will be closely monitoring any additional commentary on tax reform progress, which, if judging by today’s market reaction to Mr. Mnuchin’s comments, would probably be a positive catalyst for stocks. – Robert Harrington
As of this article’s writing, the author did not hold positions in any of the companies mentioned.
12:20 PM EDT - Stocks opened higher today, and despite a brief mid-morning pullback, are making progress once again. Just past noon in New York, the Dow Jones Industrial Average, which is displaying leadership, is ahead 57 points; the broader S&P 500 Index is up five points; and the NASDAQ is higher by six points. Market breadth is positive, as advancers are leading decliners by a comfortable margin on the NYSE. The various equity sectors are largely in positive territory. The energy and basic materials issues are forging ahead, offsetting considerable weakness in the high-yielding utility names.
Meanwhile, traders received few economic reports this morning. However, tomorrow will be a somewhat busier day. Specifically, the Producer Price Index for the month of August will be released, and the EIA will deliver its weekly crude oil inventory figures. This issuance will likely be watched by traders following the energy and commodity markets. In other news, market sentiment appears brighter, as the damage stemming from Hurricane Irma now seems to be contained. Further, concerns about North Korea’s military ambitions have abated on news that The United Nations will be taking some action concerning this matter.
Finally, few companies delivered financial reports over the past 24 hours. However, some stocks are in the news. Of note, shares of Apple (AAPL – Free Apple Stock Report) are off slightly today, as the technology giant prepares to launch a new version of its popular mobile phone. Elsewhere, shares of Teva Pharmaceuticals (TEVA) are advancing again, on news that a new CEO has been installed and that some assets are being sold.
Technically, stocks have shown resilience lately, and have managed to regain their footing after a weak performance in the month of August. It remains to be seen if the bulls can maintain their buying campaign and achieve further progress. - Adam Rosner
At the time of this article’s writing, the author had a position in Teva Pharmaceuticals (TEVA).
Before The Bell - Stocks stormed ahead yesterday morning in large part because the much-feared devastation from Hurricane Irma, albeit severe, was perhaps not as drastic as earlier feared. That reality helped the insurance group, notably Dow Jones Industrial Average's component The Travelers Companies (TRV - Free Travelers Stock Report), to a strong early gain north of three points. The market also was helped by lessening concerns, at least for the moment, from North Korea, as that nation did not launch another nuclear device over the weekend.
All told, the stock market zoomed ahead in the first half of trading, with the aforementioned Dow soaring by more than 235 points at its morning crest, and with the other large-cap composites jumping as well. Our sense is that in addition to the better news on the weather front and the more steadying situation in North Korea, there is now the reality that third-quarter GDP growth, once expected to rise about 3%, might now be closer to 2%. On a brighter note, such a weaker showing may prompt the Federal Reserve from raising interest rates this December.
After this stellar morning advance, the market gained additional traction as the afternoon commenced, with the Dow passing the 240-advance mark just after noon in New York, with strength across the board, but most prominently in the financial services and biotech areas. In all, the Dow's better than 1.1% increase at that time was the index's best showing in nearly a month, with the gains also coming on the 16th anniversary of the tragic events of September 11, 2001, when our nation was wantonly attacked.
Meanwhile, the early charge by the Dow took that index back above 22,000. Also of note, on the individual issue front, shares of Teva Pharmaceutical Industries (TEVA) also jumped ahead, rising more than 22% at one point on news that the Israel-based drug company had named a new Chief Executive, Kare Schultz. As the afternoon unfolded, the market's advance took on even more momentum. As for the economy, the weaker GDP showing, if realized, would figure to be a temporary setback until rebuilding efforts take hold later this year and in 2018.
The stock market then raced a little higher, cresting in the mid-afternoon with a Dow advance of 270 points and then proceeded to stay near that elevated level through the balance of the session, bringing that index up above 22,000 and to its best gain since early March when it jumped by just over 300 points. The NASDAQ, on the strength of a buoyant technology group, surged better than 1%, while the S&P 500 Index soared to a record high. In short, it was another wild bullish run.
The close, meantime, brought more good news, with the Dow closing with a strong 260-point advance and the NASDAQ rising 72 points. All 10 of the leading equity groups were higher, led by technology and basic materials, while better than three times as many individual stocks rose as fell on the Big Board in dealings yesterday. In sum, it was a strongly bullish beginning to the second full week of September and to a session on a most burdensome day for so many.
Looking out at a new day now, we see that stocks were notably higher in Asia overnight, on reduced concerns about Irma and North Korea, while in Europe, the leading bourses are trading in positive territory, as well at this early hour. As to our futures, the early read is also positive ahead of the equity market's opening at 9:30 AM (EDT) this morning. - Harvey S. Katz, CFA