After the Close - A volatile week on Wall Street that was dominated by the bears for the first four days of trading closed with a big statement by the bulls. Emboldened by some economic news from China that was not as bad as expected and better-than-expected earnings from banking giant JPMorgan Chase (JPM Free JPMorgan Stock Report), investors came back into the market in a big way today. The Dow Jones Industrial Average, the NASDAQ, and the broader S&P 500 Index each inked gains of 1.5% or more.  A late-day push higher also made it a winning week for the Dow 30 and the S&P 500 Index, something that did not look likely heading into today. All told, advancing issues significantly outpaced decliners on both the Big Board and the NASDAQ.

From a sector perspective, each of the 10 major groups was comfortably in positive territory, with leadership coming from the basic materials, industrial, and energy areas. The sectors most closely tied to the global economy received a boost from China, where a second-quarter GDP reading of 7.6%, though down from the prior-year rate of 8.1%, came in roughly where economists had expected. Traders who feared the figure could be worse appeared relieved and jumped back into the equity markets in a big way here. Markets in Asia were up modestly. Another sector that performed well today was the financials, helped by the stocks of JPMorgan Chase and Wells Fargo (WFC). Both of the banking giants reported better-than-expected results. J.P. Morgan’s investors also were encouraged to hear the much publicized trading losses (approximately $5.8 billion year-to-date) were not as bad as expected.  Wells Fargo, meantime, reported slightly better-than-forecast results, aided by business from the slowly recovering housing market.

In addition to the aforementioned JPMorgan and Wells Fargo quarterly reports, we received a dour report from Lexmark International (LXK)—and shares of the office equipment and supplies company dropped precipitously. Management said both second-quarter revenues and earnings were significantly weaker, blaming poor demand from Europe and unfavorable currency exchange translation rates. Next week, earnings season kicks into high gear with 10 Dow-30 companies on the docket, including technology giants Intel (INTC Free Intel Stock Report), International Business Machines (IBM Free IBM Stock Report), and Microsoft (MSFT - Free Microsoft Stock Report). 

Meanwhile, the major European bourses finished sharply higher today, as investors on the Continent easily shook off news of a major credit rating agency’s downgrade of Italy’s debt. The European investment community, instead, was in the buying mood, much like here in the States, on hopes that the economic news from China will force that country’s central bank to enact another round of monetary stimulus to reenergize the Asian powerhouse in the coming months. The news also pushed crude oil prices higher on the New York Mercantile Exchange. Oil, along with gold futures, led a rather mixed performance for the commodities markets. 

Looking ahead to next week, along with the aforementioned plethora of earnings news, we will receive several key reports on the U.S. economy. The new week kicks off with data on retail sales (Monday), followed by reports on consumer prices and industrial production (Tuesday), housing starts and the latest Beige Book summation (Wednesday), the leading indicators, existing home sales and weekly initial unemployment claims (Thursday). The week will also bring the latest Empire State and Philadelphia Fed Manufacturing Surveys. In short, it will be a very busy five-day stretch for market participants.  -- William G. Ferguson

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


12:20 PM ET - The global markets appear to be on track to have a strong up day across the board. Starting in the Far East, news from China helped set the tone. Specifically, the National Bureau of Statistics reported that the country’s economy grew by 7.6% in the second quarter.  Although this marked a sixth-consecutive interim of deceleration in China’s GDP, the number came in a bit better than some market observers had feared, leading to a modest “relief rally” in Asian markets.

Moving further west, the major European bourses are doing considerably better as they near their sessions’ closing bells. As of 12:00 (EDT), Frankfurt’s DAX was up a little more than 2%, France’s CAC 40, was close behind with a gain of about 1.5%, and London’s FTSE 100 was hovering right around the 1% mark to the upside.

Here on these shores, the major indexes are also showing solid advances as we cross the noon hour, with the Dow Jones Industrial Average and S&P 500 both up around 1.4% , and the NASDAQ close behind with a gain of about 1.3%. It appears that traders’ spirits were lifted (at least in part) by a pair of better-than-expected earnings reports from JPMorgan Chase (JPM - Free JPMorgan Chase Stock Report) and Wells Fargo (WFC). The former was particularly notable, in that despite $4.4 billion in trading losses ($5.8 billion for the year to date), the largest U.S. bank (and Dow component)  still managed to generate $5 billion in net income for the latest quarter. Shares of JPM were up 5.5% at the noon hour. The move spearheaded a charge by other financials on high volume trading, including Morgan Stanley (MS, up 3.3%), Citigroup (C, +3.9%), Wells Fargo (+3.0%), and Bank of America (BAC, - Free Bank of America Stock Report, +2.7%). - Mario Ferro

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


10:45 AM ET -   If the bulls were wary about today's prospective stock market showing, being that it is Friday the 13th, they probably need not have worried so much--at least to this point. That is because following six straight losing sessions, those perennial optimists are taking charge this morning--and doing so in convincing fashion.

Indeed, after the equity futures had been suggesting just a slightly higher opening today, and the University of Michigan's Consumer Sentiment Survey, which was released some 15 minutes into the trading day, was not compelling to say the least, the market is soaring.

All told, after the first hour and change of the trading day, the Dow Jones Industrial Average is up 150 points; the Standard and Poor's 500 Index is ahead 16 points; and the tech-heavy NASDAQ is better by 28 points. Winning stocks, moreover, are swamping losers on both the Big Board and the NASDAQ.

As for the economic news, the Producer Price Index showed just a 0.1% rise for June, a clearly benign reading, while the University of Michigan's Preliminary Survey for July, came in at 72.0, which was less than the 73.5 reading that had been generally expected. It was also the Survey's lowest reading since last December.

Still, the market, which has been pressing lower for the past week and then some, is gaining strongly from bargain hunting, a better showing from the European bourses, and some apparent relief that China's economy, while slowing with a quarterly rate of growth of 7.6%, is not easing more aggressively. It is a good start. Now, let's see if the recently chastened bulls can persist in the upward struggle.  - Harvey S. Katz   

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 Investors are going over a number of earnings reports this morning, including two from a pair of the nation’s largest banks, Wells Fargo (WFC) and JPMorgan Chase (JPMFree JPMorgan Stock Report). Wells Fargo’s earnings were a bit better than expected, thanks in part to mortgage banking. The stock is flat in the premarket. Investors appear to be fairly pleased with what they’re hearing from JPMorgan which, in an unusual move, is holding a live conference with analysts this morning to go over results and provide more details about trading losses related to the “London Whale”, which it now pegs at about $4.4 billion. That stock is up slightly in the premarket. In another piece of earnings-related news, shares of Lexmark International (LXK) are down sharply in pre-market trading, after the manufacturer and servicer of laser, inkjet, and multifunction printers said that June-quarter results would likely be weaker than previously expected, with little prospects for improvement in the second half of the year. The company cited soft demand for its products, especially in Europe, and unfavorable foreign exchange rate movements for the disappointing guidance. – 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  - The stock market continues to head lower, with yesterday's setback making it a half dozen lower sessions in a row for the leading equity averages. In truth, stocks aren't collapsing, and for the past several days, rather sizable midday and early afternoon declines have been pared back notably by the close. Yesterday was just such a day, in fact.

For the most part, the concerns center on Europe, and the Continent's myriad of economic and financial woes, on our economic sluggishness, and on what is shaping up, albeit with limited evidence so far, to be an unenterprising second-quarter earnings season, for the most part.

With these concerns in hand, the equity market is doing the logical thing--it is selling off, but a little at a time, rather than all at once. Witness yesterday. After stocks made a very half-hearted attempt to rally in the morning, the market had begun to head sharply lower by mid-session, falling back by some 110 Dow points at its nadir, and in the process, pushing that 30-stock composite back below 12,500 momentarily. Just a week or so ago, the Dow had been knocking on the door of 13,000. By the close, the Dow's loss had been pared back to 31 points. At the same time, the Standard and Poor's 500 Index pushed down to a session low of 1,325, before closing at 1,334.76. The ultimate seven-point loss in that index of 500 large corporations was not much in the absolute--being just half a percentage point. However, it was significant, as the S&P is now back down to its 50-day moving average at 1,335. The NASDAQ, somewhat weaker throughout the session, eventually closed off by 22 points, or 0.75%.

This latest setback for our market, meanwhile, came as the nation received some rare good news on the employment front, with weekly data showing that the level of initial unemployment claims had dropped sharply in the latest seven-day period, coming in at just 350,000. That is a level, if sustained, that should be sufficient for the nation to start creating new payrolls at a decent clip. Over the past three months, the monthly average of new jobs added has been just 75,000--about a third of the level generally believed to be needed to materially bring down the current 8.2% jobless rate.

Meanwhile, a new day is dawning, and with it has come some rather unappetizing news out of China, where a report showed that this fast-emerging economic powerhouse's rate of gross domestic product growth in the latest quarter had eased to 7.6%--the slowest growth pace since 2009, when much of the rest of the world was in a recession. However, this level of activity was more or less expected, and the European bourses, led by the Frankfurt DAX, are all climbing.

Over here, in the meantime, JPMorgan Chase (JPM - Free JPMorgan Chase Stock Report) has reported its second-quarter results, and the bank has affirmed that its trading loss grew to $4.4 billion in the most recent period--more than twice the initial estimate of that charge. Even so, this latest loss was largely as expected, and the bank, the nation's largest financial institution, still reported net income of $5 billion, or $1.21 a share in the three months. This was a better showing than generally forecast, and the stock is edging up a bit in pre-market trading. As to our market, the equity futures are up modestly with less than an hour to go before the start of the new trading session, with investors seemingly not swayed one way or the other by either the JPMorgan Chase results or with the latest issuance from the Labor Department showing that the nation's rate of producer, or wholesale, price growth was benign in June, with a gain of just 0.1% for the month. - Harvey S. Katz, CFA 

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