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After The Close - It was an uneven, and mostly directionless, day for the U.S. equity market. The major equity indexes got off to a nice start, as trading overseas was strong and investors received some encouraging reports on the U.S. economy. However, selective selling picked up thereafter, as fresh concerns about the growing violence in the Middle East (see below) unnerved investors a bit. The large-cap indexes, most notably the Dow Jones Industrial Average and the S&P 500 Index, suffered the most, falling into the red in the second half of the session and remaining in negative territory until the closing bell. It should also be noted that NASDAQ, which did record a gain today, finished slightly off of its earlier highs. Not surprisingly, declining issues led advancers on the Big Board, while winning stocks held an edge on the NASDAQ.

As noted, today’s news from the business beat was constructive. Before the market opened, we learned that construction spending rose by 1.8% in July. Then a half-hour into the trading day, the Institute for Supply Management (ISM) reported that manufacturing activity in the month of August expanded nicely. Specifically, ISM’s manufacturing index came in at 59.0 last month, up sharply from the July figure of 56.8 and was the highest reading in 2014.  These releases kicked off what will be a busy week of news on the U.S. economy, including Friday’s mush anticipated report on employment and unemployment. That said …

The nice boost from the encouraging economic reports was somewhat offset by reports of growing violence in the Middle East. The majority of the U.S. indexes weakened today after reports surfaced that another American journalist allegedly had been beheaded by Islamic terrorists. The video released by terrorist group ISIS surfaced this afternoon and brought a nervous reaction from investors. As noted, the large-cap dominated Dow-30 and the S&P 500 Indexes fell into the red following the report. It should also be noted that shares of Home Depot (HD -Free Home Depot Stock Report), which fell after the company noted that “unusual activity” of late supports a possible data breach at the nation’s largest home-improvement retailer, weighed on the performance of the Dow-30, along with the stocks of oil giants Exxon Mobil (XOM - Free Exxon Mobil Stock Report) and Chevron (CVX -Free Chevron Stock Report).

From a sector perspective, the big winners and losers should not come as a big surprise. Leadership came from the technology and industrial sectors, with the latter getting a nice boost from the encouraging manufacturing data. Conversely, the energy and basic materials groups were notable laggards. The aforementioned concerns about the tensions in the Middle East and the recent surge in the U.S. dollar, pressured these commodity areas. The utilities issues also were out of favor in the latest session.

Turning back to the growing crisis in the Middle East, the U.S. equity market—even with some selective selling seen today after the aforementioned terrorist act against an American citizen surfaced—is acting like it does not expect a major response from President Obama. Stocks have not sold off even with the growing violence in that area and Eastern Europe, and prices for crude oil (WTI), which would normally rise on fears about growing violence in the Middle East, fell sharply in the latest session, to the tune of almost 3% today. That said, we do warn investors that while the aforementioned conflicts have not yet prompted notable selling, the overseas issues remain very fluid and could be potential major headwind for equities, especially if the U.S. was to engage in warfare in the Middle East. - 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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12:05 PM EDT - The U.S. stock market is logging a mixed, but generally softer, session today. At just past noon in New York, the Dow Jones Industrial Average is off 42 points; the broader S&P 500 Index is down slightly; but the technology-heavy NASDAQ is ahead four points. Market breadth shows a divided performance, as advancing stocks are about even with decliners on the NYSE. The various equity sectors are mixed, too. Weakness can be found in the utility issues, the energy stocks, and the basic materials names. In contrast, some relative strength can be seen in the industrials and the technology sector.

Technically, stocks made considerable progress during the month of August. However, volumes have been quite light lately and it remains to be seen how the market will act when trading picks up in the coming weeks. Notably, the S&P 500 Index is just at the 2,000 mark and this will likely be a key level to watch.

Meanwhile, traders received some constructive economic news this morning. However, this has not been enough to push the averages higher. On point, the ISM Manufacturing Index reached 59.0 for the month of August, which was better than anticipated and also up from July’s figure. Construction spending increased 1.8% in July, which was also an improvement. Tomorrow will bring a few more economic reports. We will get a look at factory orders for July, as well as the latest Fed’s Beige Book summation. The employment situation also returns to the spotlight, as the ADP Employment Report for August is set to be released. This will be followed by the Government’s monthly employment report on Friday.

Finally, traders received little corporate news this morning. However, Compuware (CPWR) shares are trading higher on news that the technology company has agreed to be bought by a private equity group. – 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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Stocks to Watch from The Survey This morning, discount retailer Dollar General (DG) has raised its buyout offer for rival Family Dollar (FDO) to $80 a share in cash, up from $78.50. Furniture and appliance retailer Conn’s (CONN) reported weaker-than-expected fiscal second-quarter results and provided tepid guidance for the rest of the year, with the stock trending lower in premarket trading. Shares of biotech company Exelixis (EXEL) declined sharply after it stated that a clinical trial failed to meet its goal, and announced that it would reduce its workforce by about 70%. – Sharif Abdou

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 - The stock market meandered through a somewhat higher session on Friday ahead of the Labor Day weekend and the conclusion of a generally strong August. The largely constructive performance to end the month was underpinned by mostly supportive economic news, but countered by reminders of the increasingly dangerous world in which we live.

On point, the market was helped at the outset by a report showing a seven-year high in consumer sentiment in late August and by another issuance detailing a marked improvement in manufacturing activity in the Chicago area. However, in another survey, issued before the stock opened, the Commerce Department reported that personal income had inched up slightly in July, while consumer spending had dipped nominally for the first time since January. Those metrics are a bit worrisome, as consumer spending accounts for some two-thirds of the gross domestic product.

Combined, however, these reports did not dull the appetite of traders for stocks at the open. And, in predictably low volume on this late summer Friday, stocks got out of the gate strongly. But this buying did not persist, and after climbing to a 30-point gain early on, the Dow Jones Industrial Average proceeded to pull back, albeit never by more than 40 points, or so. The other indexes tracked a similar path, with the NASDAQ gaining some 20 points early and falling to a late-morning loss of a handful of points. Interestingly, though, the small- and mid-cap indexes largely stayed in the black and the advance-decline line was notably positive on the NYSE and the NASDAQ. So, the underlying trend was supportive.

Fueling this slight down move early in the session and then again in the mid-afternoon was an escalation of hostilities between Ukraine and Russia, with the former claiming that Russia had sent troops into its nation. Russia continues to deny that claim. Also, there was news that England had raised its terror alert as it maintained that an attack on its shores seemed more likely. But when traders weighed all of this against the generally supportive economic and monetary backdrop, they decided to do some buying, especially late in the day. That buying helped to push the Dow, the lone outlier, back gingerly into the plus column. The other indexes, meanwhile, generally finished the session at their best levels, as did gaining stocks over losing issues. Also, each of the major market groups finished out the session in positive territory, led by the energy, technology, healthcare and utility components. 

Indeed, that late buying flurry helped to propel all of the indexes into the plus column, with the Dow ending up ahead by 19 points, the Standard and Poor's 500 Index better by almost seven points; and the NASDAQ, buoyed by some strength in the semiconductor group, in the black 23 points, as that composite ended the day, week, and month at a 14-year high. The small- and mid-cap indexes did proportionately better, meantime, while there were more than twice as many stocks gaining on the day as losing ground on both the NYSE and the NASDAQ.                    

Now, looking out to a new month, we find that the holiday shortened week will be a busy one, with some critical economic surveys due out, starting this morning with the Institute for Supply Management (ISM) scheduled issuance of figures on U.S. manufacturing activity. Here, a survey result of 56.8 for August is expected. That would be just a nominally slower rate of improvement than was realized in July when that survey had registered a reading of 57.1. Also, at that time, we will get a report on construction spending in July. A gain of 1.2% is the consensus forecast. Also in this holiday shortened week, we will get data on vehicle sales and factory orders tomorrow, weekly jobless claims, the trade gap, and non-manufacturing activity on Thursday, and then on Friday, the Labor Department will weigh in with non-farm payroll results for August and the unemployment rate. A payroll gain of 220,000, up from 209,000 in July is expected, while the jobless rate is forecast to have eased from 6.2% to 6.1%.

Finally, in trading overnight, the markets in Asia were nicely higher, while stocks are advancing solidly in Europe so far this morning, in spite of the fact that the news out of Ukraine is no better. As to our markets, our futures, likely taking their cue from overseas, are up moderately with less than an hour to go before the start of the new trading day.   - Harvey S. Katz 

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