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After The Close - The U.S. stock market got off to a mildly lower start this morning, and ultimately delivered a mixed session. At the close of trading in New York, the Dow Jones Industrial Average was ahead 45 points, while the broader S&P 500 Index was down three points, and the NASDAQ was lower by 31 points. Market breadth was divided, with winners nominally ahead of losers on the NYSE. Of note, the energy and utility issues managed to make some progress, while the consumer and telecommunications stocks weighed on the market.

Elsewhere, traders received a few economic news items this morning. Specifically, the Consumer Price Index rose 0.4% during the month of August, coming in higher than analysts had anticipated. The core figure, which excludes food and energy items, increased 0.2% for the period, meeting expectations. Meanwhile, initial jobless claims dipped to 284,000 for the week of September 2nd, which was a favorable reading. Tomorrow will be busy day for economic news. Specifically, the latest monthly retail sales figures, the Empire State Manufacturing Survey, an industrial production report, as well as the latest business inventory numbers, are due to be released. 

Finally, it has been relatively quiet on the corporate scene, with few companies posting financial results over the past 24 hours. However, technology giant Oracle (ORCL) delivered a solid set of numbers just after the market closed this afternoon.

Technically, stocks have been making measured progress for the past couple of few sessions. The S&P 500 Index is currently sitting just below the 2,500 mark. Pushing the broad index meaningfully past this point will likely be the next challenge for the bulls. - Adam Rosner

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

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11:35 AM EDT - After three productive days on Wall Street for the bulls, including Monday’s outsized rally, stocks are trading in directionless fashion this morning. For the most part, there is a mixed undertone to trading, but it should be noted that the Dow Jones Industrial Average did hit a record intra-day high this morning. The modest gains in the Dow 30 are being offset by some nominal profit taking in the broader S&P 500 Index and the tech-heavy NASDAQ.

Market fundamentals also are not providing any additional clarity. Most of the major equity groups, save for the energy and utilities sectors, are trading in the red, but the declines are very small for the most part. There are slightly more advancing than declining issues on the NYSE. Conversely decliners hold the advantage on the NASDAQ, but it should be noted that the technology stocks are rallying off of their intra-day lows so we may see some narrowing of the gap here.

As noted, a majority of the top-10 sectors are holding down arrows. The biggest laggards are the basic materials stocks, which are being hurt by the U.S. dollar rally this morning. The stronger greenback, though, is not hurting the energy group, which is the lone standout performer today. The energy stocks are getting a boost from this week’s Energy Information Agency report, which showed only a modest build in oil supplies. Likewise, U.S. crude oil refinery inputs averaged 14.1 million barrels per day during the week ending September 8, 2017. That is 394,000 barrels per day less than the previous week’s average. Meantime, the consumer discretionary stocks are down, with a weak showing from the stocks of the apparel and accessories companies weighing on the category.

The aforementioned strength of the dollar and a jump in fixed-income yields are primarily being driven by today’s consumer pricing data. Specifically, the Labor Department reported that the Consumer Price Index for All Urban Consumers rose 0.4% in August on a seasonally adjusted basis. Likewise, the all-items index rose 1.9% over the last 12 months, up from 1.7% in July. Increases in the indexes for gasoline and shelter accounted for nearly all of the seasonally adjusted increase in the all items index. The energy index rose 2.8% in August, as the gasoline index increased 6.3%. The index for all items less food and energy rose 0.2% last month. The uptick in inflation pushed bond yields higher this morning. That said, despite the modest increase in inflation, the rate is still running below the Federal Reserve’s target of 2.0%, so our sentiment that the lead bank will take a guarded approach to tightening the monetary reins.

Meantime, there was no market-moving news from Washington today. Although speculation rose last night the President Trump and Democratic leaders had reached a deal last night on DACA and the debate on tax reform had made some strides, we learned this morning that no agreement had been reached but the conversations were productive. The market did not have much of a reaction to the comings and goings from the White House last night.

Looking ahead to the second half of the session, the bulls nor the bears seem to have much of an advantage. Thus, our sense is that absent any news from Washington later today, we may continue to see a game of tug-of-war from the bulls and the bears this afternoon. Stay tuned. – William G. Ferguson

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

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Before The Bell - Following back-to-back wins by the intrepid bulls to start this second full week of September, a month that is often challenging for Wall Street, the stock market backed off some to begin the third middle of the week. To be sure, the pullback was modest, but it did initially encompass all of the major indexes, before the Dow Jones Industrial Average managed to tip-toe back into the black for a spell by the end of the first hour of trading. Losses by Boeing (BA - Free Boeing Stock Report) and Apple (AAPL - Free Apple Stock Report), two of the blue-chip composite's best performers thus far this year held the bulls at bay early on.

This initial pullback should not have been surprising as the market had enjoyed two stellar sessions to start the week, especially Monday's dramatic advance. The early-week strength had reflected a sense of relief that the damage from Hurricane Irma, albeit extensive, had not been as devastating as some of the models had suggested. Also, the earlier upturn reflected optimism that tax reform may still happen this year. As to other news, data issued earlier in the day had shown that the Producer Price Index had risen 0.2% in August, just below expectations, following a downtick of 0.1% in July. A 3.3% jump in energy costs fueled the August rise.  

So, stocks eased a bit as the morning progressed, with most of the indexes trending slightly lower. Meantime, there was a more or less even breakdown between winning and losing groups, while a few more issues were gaining in price than falling is value, adding up to a mixed market, overall. This uneven pattern persisted into the latter stages of the morning. Indeed, as we reached the noon hour in New York, the Dow and the Russell 2000 were both positive, while the S&P 400 and 500 and the NASDAQ were off slightly. There clearly was no definitive trend at that point.   

Interestingly, though, some recently weak issues, such as Starbucks (SBUX), strengthened during the session, while Treasury note yields, off in recent days, firmed up for a second day in a row, rising to 2.20%. Stocks then firmed up somewhat as the afternoon progressed, so that as we moved inside of the final two hours of the trading day, the Dow was higher by some 20 points, while the other large-cap indexes still were nominally in negative territory. This pattern would continue into the middle-to-latter stages of the session, before some further strengthening would occur during the final half hour of trading.

Boosted by this modicum of late buying, the Dow concluded matters ahead by 39 points, pushing that composite to within some 20 points of an all-time intraday high, with the aforementioned Boeing ending the day ahead slightly. The S&P 500 Index reached a record high, with its two-point advance, and is now only two points from the magical 2,500 mark, while the NASDAQ, a laggard for much of the day, ended matters ahead six points. A small gain was secured by the Russell 2000, but the S&P 400 edged lower. The hoped-for tax reform is not yet a reality, but the Street seems to be already celebrating.    

Looking ahead to a new day now, we see that stocks were lower in Asia overnight, on weaker economic data out of China, while in Europe, the principal bourses are now tracking in a mixed pattern. Elsewhere, gold is moving a bit lower in early dealings; oil, a winner yesterday, is heading still higher on better demand; and Treasury note yields, up two days in a row are off thus far in Thursday morning's trading. Finally, after three straight generally higher sessions this week, the U.S. equity futures are signaling a mixed opening when trading resumes later 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.