After The Close - The U.S. stock market got off to a slow start this morning, on somewhat disappointing economic metrics at home, but moved sharply higher as the day progressed. At the close of the session, the Dow Jones Industrial Average was higher by 72 points (0.5%); the broader S&P 500 Index was ahead 14 points (1.0%); and the NASDAQ, which again led the averages higher, tacked on 42 points (1.4%). Market breadth suggested widespread buying of equities, as advancing stocks outnumbered decliners by more than 3 to 1 on the NYSE. All of the market sectors participated in the advance, with considerable gains in the technology, conglomerates, and basic material names. Notably, the financial issues also had a big move up, which was encouraging. Elsewhere, the utility stocks were lagging today, as traders chased the more dynamic names.

Technically, the S&P 500 Index had pulled back over the past several sessions, with quite a few consecutive days of weakness. The consolidation and even profit taking were to be expected, given the market’s run over the past couple of months. Now, we will have to see if today’s solid move higher can be extended over the next few days.

The international news was in the spotlight again today. Notably, in Asia, the markets put in a strong session overnight. Specifically, the Shanghai Composite was up 2.6%, and the Hang Seng advanced over 1%. The strength reflected news that China’s government will likely be implementing further stimulus measures. In Europe, the major bourses put in a rough session early, but managed to end with gains. Traders may be a bit more optimistic about Spain’s financial situation. While problems still persist, aggressive measures to cut that nation’s budget likely suggest that progress is possible. The euro was up slightly to $1.29, just short of the “psychologically” important $1.30 mark.

The economic reports issued in the U.S. were largely disappointing. True, the employment situation seems to be on the mend, as weekly initial jobless claims slipped to 359,000. While better than many had expected, readings below 350,000 are still needed to suggest job creation. However, traders were not too happy with the latest durable goods report, which showed orders tumbling 13.2 % in August. Adding to the negative tone, the third estimate for second-quarter GDP came in materially weaker than originally expected.

As always, traders took notice of a few corporate reports today. Thor Industries (THO) stock moved higher, after the recreational vehicles maker released favorable results. In finance, Discover (DFS) shares were up after that company’s results exceeded expectations.   - Adam Rosner

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


12:30 PM ET - Stocks are strengthening today after shaking off some disappointing economic news on our shores. Specifically, the nation’s second-quarter GDP was unexpectedly revised quite a bit lower, owing to the drought in the Midwest, and a report on August durable-goods orders showed considerable weakness. Another piece of data, from the National Association of Realtors, showed that pending home sales fell last month after hitting a two-year high in July.

Nevertheless, investors appear to be taking heart from a government announcement that the jobs situation is somewhat better than initially thought. The Labor Department said that it would probably boost the total employment figure by 386,000, or 0.3%, in its annual benchmark revision. In addition, this week’s initial unemployment claims dropped by a substantial 26,000, to 359,000, with the less volatile four-week moving average also falling.

Elsewhere, the news from overseas offered some encouragement. Stocks in China rose sharply as bargain hunters stepped in to pick up equities trading at more attractive valuations. As for Europe, optimism that Spain would submit its annual budget, seen as a precursor to that nation requesting bailout funds, lifted banking shares.

Just past the noon hour on the East Coast, the Dow Jones Industrial Average was 65 points higher, and the NASDAQ was up 33 points, or greater than the Dow on a percentage basis. The broader market is higher, too, with the number of advancing issues outpacing decliners by a better than 2:1 margin on the Big Board.

At the sector level, winners so far today include the stocks of energy, financial, and technology companies. A bounce of over $1 a barrel in oil prices is helping to lift the shares of petroleum giant Chevron (CVX - Free Chevron Stock Report) and oilfield services provide Schlumberger (SLB). Meantime, the optimism regarding Europe is a plus for bank stocks, such as Bank of America (BAC - Free Bank of America Stock Report) and Citigroup (C). And the tech sector is being led by a rise in the shares of Apple (AAPL). The recent release of an updated version of its popular iPhone seems to be going very well.

Gold stocks are continuing their resurgence, as well. The thinking there is that the Federal Reserve’s initiation of another round of bond-buying will push the price of gold higher, as investors seek to protect themselves against a rising threat of inflation. High bullion prices are pushing up stocks of gold producers, including Barrick Gold (ABX).

As afternoon trading gets into swing, the market is also being helped as Spain’s budget proposals initially appear to have satisfied expectations. - Robert Mitkowski

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

Stocks to Watch from The Survey There is some M&A news out this morning. In addition to reporting August-period results, mattress maker Sealy (ZZ) has agreed to be acquired by industry peer Tempur-Pedic (TPX) for $2.20 a share. Including the assumption of debt, the deal is valued at roughly $1.3 billion. Tempur-Pedic stock is trading sharply higher in the premarket, while Sealy shares are indicating a modestly higher opening.

On the earnings front, shares of Thor Industries (THO) are trading sharply higher in the premarket, after the manufacturer of mobile homes and travel trailers announced solid July-period results. The stock of Discover Financial Services (DFS) is also up in pre-market trading, after the direct banking and payment services company released August-interim financials. Finally, Cepheid (CPHD), a medical supplies company, said that its third-quarter sales will likely come in below expectations. The stock is indicating a moderately lower opening this morning. – 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 faltered anew yesterday, marking the fifth day running that the Standard and Poor's 500 had trended lower and the third day in succession that the tech-heavy NASDAQ had done the same. Worries about the pace of economic activity in Europe and China, and an unprepossessing report on new home sales in our country issued early in the latest session were all instrumental in driving stocks moderately lower in the United States. All told for the day, the Dow Jones Industrial Average fell 44 points; the aforementioned S&P 500 Index shed eight points; and the NASDAQ, dragged down by some rare weakness in the shares of iconic tech-stalwart Apple Inc. (AAPL) tumbled by 24 points. The small- and mid-cap stocks also were weak as the mini-selloff in an overbought stock market continued on a light trading day.

Moreover, in what some are calling a so-called flight to safety, the price of U.S. Treasury notes and bonds rose for an eighth straight day, with yields on these fixed instruments falling back once again. This morning, the 10-year Treasury is now yielding just 1.63%, while the companion 30-year bond is returning a scant 2.81%. Getting back to the housing news, sales of new homes ticked down ever so slightly in August, easing to an annual rate of 372,000 homes from an upwardly revised 374,000 units in July. Initially, the July sales estimate had been given at 372,000. Expectations had been that sales would have risen to 380,000 homes in August. Still, as has been the pattern recently, the year-to-year matchup was highly favorable, with sales climbing by 27.7% from the prior August's rate of 292,000 homes. 

In response, shares of the major homebuilders, which have been on an upward track in recent months, fell back notably yesterday, while energy and technology stocks weakened as well. Markets overseas also fell, as worries about Spain and Greece proliferated once again.

However, things are looking up a bit this morning, as the world's bourses are generally posting gains, as are the U.S. equity futures, which show increases of six and nine points, respectively, in the S&P 500 Index and the NASDAQ. As to our economy, meantime, data just issued moments ago were underwhelming, to say the least. Specifically, one report showed that second-quarter GDP was revised markedly downward from 1.7% to 1.3%. This is the final revision, and this metric compares unfavorably with the first quarter's 2.0% rate of GDP gain, as well as with expectations of 1.7%. Also, weekly jobless claims rose in the latest seven-day stretch, while durable goods orders, already expected to fall during August, tumbled by much more than forecast. Notwithstanding these poor metrics, the U.S. equity futures have thus far held their gains suggesting a higher opening for the market when trading commences 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.