After The Bell - It was an uneven day of trading on Wall Street today, with the major U.S. equity indexes producing mixed results. By the closing bell, the Dow Jones Industrial Average and the broader S&P 500 Index had added 75 and five points, respectively, while the NASDAQ ended in the red, weighed down by a disappointing showing from Apple (AAPL)—the technology giant was set to release its latest quarterly results shortly after the close of trading today. There was a slight pickup in buying during the final hour after trading was listless for much of the second half of the session, possibly in anticipation of the next round of quarterly earnings reports (see below).

Apple shares have been weaker in recent sessions largely due to reports of a slowdown in the pace at which its products are being put to use on networks run by telecom providers like AT&T (TFree AT&T Stock Report)—the telecommunications giant, which reported strong results earlier today. The AT&T showing, along with 3M Company (MMMFree 3M Stock Report), another Dow-30 company to report this morning, pushed the index of 30 bellwether companies nicely higher today. Technology stocks, following the lead of Apple, were weak.

From a sector perspective, leadership was shown by the conglomerates, helped by positive quarterly reports from blue chips 3M Company and United Technologies (UTXFree United Tech Stock Report). Conversely, the earnings news from Ceradyne (CRDN) and Netflix (NFLX) was not as encouraging, and the shares of each company responded accordingly. Looking ahead, in addition to the forthcoming earnings release from Apple, we will get quarterly results from two more Dow-30 components tomorrow, with Boeing (BAFree Boeing Stock Report) and Caterpillar (CATFree Caterpillar Stock Report) on the docket. The Caterpillar results, much like today’s report from 3M Company, will be closely monitored, as it is viewed as a gauge to how the economy is faring. Other companies of note scheduled to report in the next 24 hours include GlaxoSmithKline (GSK), Sprint Nextel (S), Tupperware Brands (TPU), Northrop Grumman (NOC) Motorola Solutions (MSI) and Harley-Davidson (HOG).

Speaking of the economy, the news on these shores was mixed today.  The Conference Board's Consumer Confidence Index dipped slightly in April coming in at 69.2, which was slightly below the 69.5 score recorded for March and the consensus expectation. Meanwhile, sales of new homes in March came in at a seasonally adjusted annual rate of 328,000. That figure, though down 7.1% from the revised February figure, was up 7.5% year over year, and comfortably ahead of the consensus expectation of 315,000 units. Too, the pace of sales for the month of February was revised significantly higher, showing sales of 353,000 versus the prior estimate of 313,000. However, pricing still remains troublesome. The Standard & Poor's/Case-Shiller home-price index showed that prices dropped in February in 16 of the 20 cities it tracks, and home prices fell in February in most major U.S. cities for a sixth consecutive month. Still the investment community appeared to be pleased with the housing data, as the shares of the publicly traded homebuilders, including D.R. Horton (DHI), PulteGroup (PHM), Ryland Group (RYL), Lennar (LEN), moved higher today.

Elsewhere, the situation in the euro zone has investors worried, and as we noted in our earlier commentary, has offset a good deal of the positive earnings reports in recent days. Indeed, fears that the euro-zone debt crisis could spread to other core countries have spiked in recent days. Not helping matters were yesterday’s resignation of Dutch Prime Minister Mark Rutte after the collapse of austerity talks over the weekend and the still-to-be-decided outcome of elections in France. Still, the European bourses, including Germany’s DAX (up 1.0%) and France’s CAC-40 (+2.3%), were stronger today—though much of the upside may have been some selective bargain hunting following yesterday’s outsized losses on the Continent.    

The investment community will be busy over the next few days, with earnings season in full gear and some important economic news forthcoming, particularly with the Federal Open Market Committee’s two-day meeting concluding tomorrow and the initial reading on first-quarter GDP due this Friday. Too, the soap opera in Europe may provide some talking points, especially with tomorrow morning’s scheduled bond auction in Spain. – William G. Ferguson

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


12:15 PM ET - The U.S. stock market is recovering partially today, after yesterday’s sharp decline. As we pass the noon hour in New York, the Dow Jones Industrial Average is up 103 points (0.8%); the S&P 500 Index is higher by seven points (0.5%); but the NASDAQ is largely unchanged. On the bright side, market breadth is positive, as advancing issues are outnumbering decliners by almost 3 to 1 on the NYSE. Furthermore, most of market sectors are advancing. There is leadership in the conglomerates, transports and capital goods stocks. In contrast, there is weakness in the technology area, notably at Apple (AAPL).

Some of the strength in the market today is likely related to recent earnings releases. Dow component AT&T (T - Free AT&T Stock Report) is seeing its stock rise, after the telecom giant put out a strong report. Also helping the DJIA is 3M (MMM - Free 3M Stock Report). That company also put out a good report, sending its shares higher. Elsewhere, US Steel (X) stock is off, after the company issued an underwhelming report and outlook.

The economic news has been mixed today. The Conference Board’s Consumer Confidence Index slipped a bit in April, and was also a bit lower than analysts had been expecting. However, the housing market looks a bit stronger. New home sales in March came in at 328,000 units, annualized, which was lower than the upwardly revised 353,000 units sold last month, but better than analysts had been anticipating.
Technically, the market is looking for direction. Yesterday’s down move pushed the S&P 500 Index back below its 50-day moving average, located at 1,380, and that has many concerned that the pullback could intensify.  So far the S&P is only about 3.5% off its high of 1,422, which is not too much of a correction, given the run we have had. If the current level does not hold, the market may test the 1,360 range that was hit in early April, and find support there. If that area does not hold, we would look for some support at 1,340, a level that held in early March.

Looking at volumes is crucial. Yesterday’s selling came on relatively healthy volume, so this bears watching. Notably, trading volumes have been picking up on down market days lately, which suggests some conviction on the part of the bears. It would be good to see some large volume advances, to show that traders are committed to stocks. Elsewhere, the VIX, now at 18, has moved up a bit lately, suggesting a bit more apprehension. However, this reading still remains relatively low, and indicates that overall sentiment has not yet turned negative.  Further, it is important to watch traders’ behavior at the close of the sessions. Some bargain hunting, rather than indiscriminate selling, is always good to see, and would suggest some support for equities.   - Adam Rosner

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


Stocks to Watch from The Survey While Wall Street was abuzz with merger and acquisition activity yesterday, today will likely be more about earnings. Three Dow-30 components, industrial conglomerate United Technologies (UTXFree United Technologies Stock Report), diversified manufacturing and technology company 3M (MMMFree 3M Stock Report) and telecom AT&T (TFree AT&T Stock Report) reported solid first-quarter financials this morning, and all three stocks are higher in the premarket. United Technologies and 3M delivered better-than-expected results, while AT&T’s numbers were in line with our estimates.

Investors are also digesting earnings reports from some other notable companies, such as Netflix (NFLX), which released March-period financials after the market closed yesterday. Although its first-quarter loss was not as steep as expected, investors were disappointed with numbers regarding subscriber growth. The stock is down sharply in premarket trading, as are shares of retailer Big Lots (BIG). That company warned that April-period sales and earnings would likely be weaker than expected. On the other hand, Align Technologies (ALGN), maker of Invisalign braces, and semiconductor company Texas Instruments (TXN) delivered sales and earnings that pleased investors, who bid the stocks up in the premarket. Confectioner Hershey (HSY), oilfield services provider Baker Hughes (BHI), and trucking company Ryder System (R) are also trading higher after announcing earnings.

Meanwhile, investors are anxiously awaiting quarterly results from Apple (AAPL), restaurant operators Buffalo Wild Wings (BWLD) and Panera Bread (PNRA), railroad Norfolk Southern (NSC), and Internet company Baidu (BIDU), all of which are scheduled to report earnings after the market closes today. – Matthew E. Spencer

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


Before The Bell - U.S. stocks opened the week with a thud, falling sharply at the open yesterday and then proceeding to drift even more substantially downward over the course of the morning, before finally arresting the decline near mid-session. The market then attempted to pare the deficit as the afternoon wore on, albeit with only mixed success.

By the final bell, stocks were still lower, but some selective buying in the final hour helped to trim the deficit somewhat. However, the Dow Jones Industrial Average still finished the session off by 102 points, after having been lower at the session's trough by more than 180 points. The NASDAQ, too, ended the day off rather materially, losing 30 points, but that, too, was off a morning low that saw this index fall by more than 50 points. The other averages also ended the day sharply in the red.

Sending stocks lower yesterday, for the most part, were troubling signs out of the euro zone, where the Netherland's government could not agree on a budget reduction accord, France's presidential election is headed for a runoff and a likely government shakeup, manufacturing in Germany slid noticeably in the latest month, and bond yields rose anew in France, Italy, Spain, and Portugal, where the latter three nations are struggling with their own set of financial crises. Europe appears on the edge of recession, overall, with a number of countries already down that unenviable path.

As for our own situation, there was a paucity of economic news out yesterday, but earnings season continued to heat up, with a number of key and mostly encouraging releases. Companies, for the most part, are routinely beating their targets for the first quarter, which had been set relatively low in the wake of a number of reductions in consensus profit estimates earlier in 2012. Specifically, as of last Friday, some 25% of the S&P 500 companies had reported their quarterly results, and 81% of those reporting corporations had beaten expectations. That is the high point ever, topping by two percentage points, the previous peak recorded in the third quarter of 2009, when the nation was just coming out of the long recession and profit targets were admittedly much easier to beat.

In truth, the earnings results have just modestly beaten expectations, and as noted, the bar was set rather low. Still, the solid performance by Corporate America is helping Wall Street to hold up reasonably well so far this spring, with most of the averages within just a few percentage points of their late-winter, early spring highs. For example, yesterday's close of 12,927 on the Dow is within just 360 points, or 2.8% from its high reached in late March.

Going forward this week, the news wires will be busy as a slew of companies in the Dow will be reporting their quarterly results, along with many other high-profile names not in that 30-stock composite of mostly blue chip companies. Also, we'll get a pair of key economic reports this morning. For example, the government will issue data on sales of new homes for March. That data point will be out a half hour into the trading session. At the same time, the Conference Board will report on April consumer confidence. All told, a slight gain in home sales, following declines in housing starts and existing home sales for March, is expected. Meanwhile, most economists are calling for a flat reading in consumer confidence. As the week unfolds, we will see reports issued on orders for durable goods, weekly jobless claims, and opening-quarter GDP. An expansion reading of 2.5% is the consensus forecast for this last metric.

As for the stock market, following yesterday's selloff, the European bourses are seeing some modest bargain hunting so far today, while our futures are showing incremental gains, suggesting a flat-to-nominally higher start when trading resumes in about a half hour from now. – Harvey S. Katz

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