After the Close - Stocks appeared to be looking for direction for most of today’s session, and ended mixed. At the closing bell, the Dow Jones Industrial Average was down 10 points but the NASDAQ had gained a handful of points. Market breadth was slightly positive, with winners besting losers by more than an eight-to-seven margin on the New York Stock Exchange. Energy stocks did well, with oil prices back over $93 a barrel and a fire Monday at one of Chevron’s (CVX - Free Chevron Stock Report) California refineries boosting gasoline prices on the west coast. Shares of Exxon Mobil (XOM - Free Exxon Mobil Stock Report) and Valero Energy (VLO) flirted with fresh 52-week highs as a result. 

Broadly speaking, on the plus side these days is that investors are factoring in the early stages of a recovery in the housing sector. Further evidence of housing’s renewed vigor came to light today with information that showed the median U.S. home price rose in the second quarter at a rate not seen since early 2006. Low interest rates are a contributing factor, to be sure. Government agency Freddie Mac reported this morning that 30-year mortgage rates averaged 3.59% this past week. While that is higher than last week’s 3.55%, it is still an extremely attractive rate, and well below the 4.32% average of a year ago. Less inventory and higher rents are contributing to the revival in housing, as well.

The auto industry’s comeback is another bright spot. Light vehicle sales fell to under 11 million in 2009, but are expected to be around 14 million this year. Further gains are expected in the coming years, too, since the average age of a passenger car in the U.S. is now estimated to be a rather old 11 years. The projected uptick in manufacturing could translate into some meaningful job growth.

The promising trends in housing and autos aside, traders still have to deal with the uncertainty caused by Europe’s financial crisis. That economic calamity in progress is dampening activity around the globe. For instance, McDonald’s (MCD - Free McDonald's Stock Report) disclosed yesterday that its same-store sales were flat in July, which might be as good an indicator as any that consumers are not having a freewheeling time of it nowadays. Data from China released today also showed that a slowing economy there was affecting growth in industrial production and consumption.

For its part, Wall Street seems to be counting on another round of intervention by central banks in the U.S., Europe, and Asia to boost prospects for economic growth. We figure Wall Street will get its wish, although it may be the case that the Fed’s efforts are producing diminishing returns. In any event, there are rising expectations that central bankers will provide further monetary stimulus in the near future, and investors might well be displeased if no new measures are announced soon. - Robert Mitkowski      

At the time this article was written, the author did not have a position in any of the companies mentioned.

12:30 PM ET - The U.S. stock market was moving higher for much of the morning, but has lost some ground near mid-session. The initial enthusiasm may have reflected a batch of strong economic reports. The nation’s employment situation seems to be on the mend, as initial jobless claims for the week ended August 4th dipped to 361,000, coming in better than analysts had expected, and also better than the 367,000 figure logged in the prior week. The news comes just after an upbeat employment report was issued last Friday, starting the current stock market rally.  Elsewhere, the trade balance for June was also encouraging. The nation’s trade gap narrowed to $42.9 billion in June, from $48.0 billion in May, coming in better than many had anticipated. Tomorrow is set to be a light day for releases, but we should get a look at export and import prices for July.

Meanwhile, the corporate reports here in the U.S. are still coming in.  Shares of Allscripts (MDRX) are headed higher after that company issued a decent outlook. Universal Display (PANL) is also seeing it stock rise sharply after reporting good results. There are also big gains in Elizabeth Arden (RDEN) on a good report. However, Monster Beverage (MNST) shares are down, after that company posted weak results. In acquisition news, Robbins & Myers (RBN) is seeing its stock surge, as that company is likely being acquired by National Oilwell Varco (NOV).

At just past noon in New York, the markets had slipped into negative territory. The Dow Jones Industrial Average is off 30 points (-0.2%); the S&P 500 Index is lower by two points (-0.1%); and the NASDAQ is up one point. Market breadth is now mixed, as declining issues are just ahead of advancers on the NYSE. The market sectors are putting in an uneven performance. There are gains in the basic materials, energy, and technology issues. The fact that in the recent rally there has been leadership in areas that offer promise in an improving economy is likely a good sign. Meanwhile, weakness can be found in the conglomerates and consumer non-cyclical names.

Technically, the market may be hitting some resistance, after a large rally. Notably, the trading volumes have been a bit light over the past few sessions and that is of some concern.  It is not clear what news has changed traders’ perceptions lately.  Corporate profits have not been too bad, and that is encouraging.   - 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 Earnings reports continue to flow in, and a number of them appeared to surprise investors. On the bright side, shares of Allscripts Healthcare Solutions (MDRX) are up sharply in the premarket, after the provider of electronic health record systems reported second-quarter results and issued a better-than-expected outlook. Wall Street also appeared pleased with quarterly data from department store Dillard’s (DDS), restaurants Brinker International (EAT) and Wendy’s (WEN), and NVIDIA Corp. (NVDA), a developer of 3D graphics and multimedia processing technology.

On the other hand, shares of Monster Beverage (MNST) are indicating a sharply lower opening this morning, after the energy drink manufacturer reported second-quarter earnings that were a bit lower than expected, due in part to margin pressure. Results from retailer Kohl’s (KSS) and telecommunications company Windstream (WIN) also failed to impress, and those stocks are trading moderately lower in the premarket.

In other news, Robbins & Myers (RBN), a machinery company that serves an array of industries, including oil and gas exploration, has agreed to be acquired by oilfield services provider National Oilwell Varco (NOV) for $2.5 billion in cash, or $60 a share. That represents a 28% premium to the issue’s preannouncement closing price. RBN stock is soaring in the premarket, while shares of National Oilwell are down slightly. – 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 bulls tried hard to make it four in a row yesterday, rallying several times into plus territory during the session, before largely giving up the fight. All together, by the close, while the Dow Jones Industrial Average did manage to post a fourth winning day in succession, rising by seven points on the day, and the Standard and Poor's 500 Index added less than a point, the NASDAQ shed a handful of points and the small-cap Russell 2000 Composite lost a bit more than a point. Meanwhile, winning stocks edged out losing issues on the Big Board by a 15-to-14 margin, while losers bested winners on the NASDAQ by a more comfortable margin of 14 to 11. In all, the two sides just could not make up their minds just which way to go.

Even so, the Dow has now risen by some 300 points in the past four sessions, with 217 of those points coming last Friday when the bulls celebrated a much better-than-expected gain in July non-farm payrolls. The blue chip index is now just about seven percent off of its all-time high set before the 2007-2009 bear market. Among the blue chips in this scarce news day, we saw a solid gain in the shares of depressed computer maker Hewlett-Packard (HPQFree Hewlett-Packard Stock Report), with that tech behemoth gaining as it raised its fiscal third-quarter earnings forecast. Also rising yesterday were the shares of Walt Disney (DISFree Disney Stock Report) on solid quarterly earnings. The entertainment giant, in fact, saw its stock hit a 52-week high of $50.65 during the session. On the other hand, fast food icon McDonald's (MCD - Free McDonald's Stock Report) posted the biggest drop among the Dow issues, falling back on declining monthly sales across all three of its global regions. Conversely, retailer Macy's (M) saw its stock jump by more than a point after posting solid earnings and raising its fiscal 2012 forecast.

Once more these happenings took place on a light economic news day on our shores, save for a slightly better-than-forecast gain in non-farm productivity during the second quarter, and with earnings season running down to an inconclusive finish. Overall, earnings season has not been a compelling affair. True, almost 65% of the companies in the S&P 500 Index have beaten estimates, but many of those expectations had been lowered during the weeks leading up to the collective releases. Moreover, guidance has not been especially compelling, as many companies continue to struggle against an economic engine that just cannot seem to move into a higher gear.

Now, a new day dawns, and Europe's bourses are generally off a bit, as the Continent continues to battle a sinking economy and an array of financial ills. Meanwhile, data released earlier today showed that China, now the world's second largest economy, noted an accelerating business slowdown. However, sensing that this bad news could mean more monetary stimulus, the Shanghai Composite gained earlier today.

As to our markets, they were showing some muted strength earlier in the morning, but have now moved into a mixed mode, with the S&P 500 futures slightly lower, but with the NASDAQ futures now climbing modestly. This improvement may have been generated, in part, by a much better-than-expected report on June's international trade deficit, which was pared notably. As such, a mixed-to-narrowly higher opening would seem ahead when the bulls and the bears get down to work in less than an hour from now. – Harvey S. Katz

At the time of this article's writing, the author had positions in DIS.