After The Close - The markets continued to trade unevenly during the day, with the Dow Jones Industrial Average and S&P 500 finishing just slightly positive at the close. Stocks fell early as trade worries with China loomed large, but the markets recovered a bit on news that the United States has called for a new round of trade talks with that nation. The market showed more advancers than decliners, though it was close-to-even for much of the day. The consumer staples and energy stocks were strong performers today and the financials and technology stocks lagged the broader market.
Individually, Apple (AAPL – Free Apple Stock Report) announced several new products at its annual Apple Event. These included a new watch, which has a larger display and is the first consumer wearable to have FDA clearance to perform electrocardiograms (EKGs). In addition, Apple announced three new iPhones, which range in price between $749 and $1099 per device. Still, the shares fell on the day, alongside other technology issues.
Conventional tobacco stocks gained ground today, after the FDA ordered five makers of electronic cigarettes or e-cigs to address plans for preventing teens from gaining access to the devices. Shares of companies, such as Altria (MO) and British American Tobacco (BTI), were significantly higher on the day, as the FDA has suggested that the makers of e-cigs may be subject to more regulation in the future.
Meantime, Hurricane Florence is a top story. It is expected to make landfall in North Carolina, South Carolina, and Virginia early tomorrow morning. The storm could hit the coast as a Category 4 hurricane, and might be the most destructive storm to hit the Carolinas in 60 years, if storm surges occur. In addition, several spots may wind up with over 40 inches of rain. Companies with operations in the area have temporarily shut down plants and office buildings, and Boeing (BA – Free Boeing Stock Report) flew several planes out of the area. Early estimates for total damages have been as high as $170 billion, which would hurt the property insurers in the area, while the closure of several ports will disrupt international trade.
Looking forward, initial jobless claims (210,000 expected) and Consumer-Price Index updates will be reported early tomorrow. These may have an effect on the Fed’s plans to hike interest rates at a gradual pace. In addition, notable companies, such as The Kroger Company (KR) and Brady Corp. (BRC) are expected to release earnings results before the bell.
At the time of this article’s writing, the author had positions in MO and BA.
Before The Bell - The stock market followed up a rocky close to last week, on further ill trade winds blowing in from China, with an uneven performance to start the new five-day trading span, with a loss of almost 60 points in the Dow Jones Industrial Average on Monday, but a gain of some 20 points in the tech-laden NASDAQ. Then, yesterday, an initial selloff overseas on global concerns pushed the averages lower to start the latest session on our shores. However, the bulls, as resilient as ever, quickly regained their composure and pushed stocks higher.
To recap, the Dow, on those global worries, fell back by more than 100 points at the open. But within a half hour or so, that blue chip composite was at the breakeven mark, where it remained for the next hour, roughly. However, as we headed into the noon hour in New York, the Dow had risen by more than 160 points. It then would stay in that range, before losing a little of its edge as we headed toward the close. Interestingly, after that late-morning buying burst, stocks did little the rest of the session.
We should note, though, that this is a market of stocks every bit as much as it is a stock market. So, while the averages spurted ahead, with not only the Dow, but the NASDAQ, on strength in technology, adding 48 points. Leading the way higher yesterday, were the energy and tech stocks, with the former gaining notably on a 2.7% jump in oil prices. Among the energy issues, shares of Exxon Mobil (XOM –Free Exxon Mobil Stock Report) climbed more than a point on the day, ending close to its 52-week high.
Also gaining sharply on the day was technology. Here, the big winner yesterday was the stock of iPhone maker Apple (AAPL – Free Apple Stock Report). That issue, which fell back for several days in succession, received a brokerage house upgrade yesterday. And that is all the stock needed, with the issue jumping $5.52 a share on the day. On the other hand, Intel (INTC – Free Intel Stock Report), another tech icon, and fellow Dow member, along with Apple, fell back sharply during the day falling into bear market territory in the process.
Meantime, the market drifted into the close yesterday with the indexes all performing well, as the Dow wound up adding 114 points. However, the performance of the market in general was not all that upbeat, with just a narrow plurality of stocks posting gains over issues ending the day with losses on the Big Board. Worse, the NASDAQ saw a few more issues fall in price than gain on this otherwise solid day for the averages. Thus, while there was a triple-digit win for the Dow, the session was little better than mixed, overall.
Now, a new day begins, and for clues as to what may lie ahead, we glance at Asia, where stocks fell in overnight dealings. In Europe, meantime, the bourses are tracking mostly higher at this hour. Elsewhere, oil, a big gainer yesterday, is now climbing further on global supply concerns; yields on the 10-year Treasury note, which ended matters at 2.98% in trading yesterday, for a solid gain on the day, are now passing hands at 2.96%; finally, U.S. equity futures, following yesterday's uneven performance, are now suggesting a lower opening this morning. – Harvey S. Katz, CFA