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After The Close - The U.S. equity market traded in a tight band around the neutral line for much of today’s session, though the Dow Jones Industrial Average was notably weaker than the other major indexes. By the closing bell, the Dow Jones Industrial Average, helped by some last-minute buying, was off 33 points, while the NASDAQ and the broader S&P 500 Index were modestly higher. Our sense is that there was some sector rotation in play today, and that the DJIA was ripe for a bit of profit taking after the index of 30 bellwether companies moved higher yesterday. Moreover, with economic news on the light side, a bit of bearish sentiment may have crept up after a few dour earnings reports were issued this morning and investors were able to give more attention to the lingering sovereign-debt problems in the euro zone.

From a sector perspective, some of the defensive areas were in favor today. Healthcare stocks were among the top performers, along with the consumer noncyclical and utilities sectors. It is also worth noting that the airline stocks moved higher, prompted by semi-encouraging comments from Delta Air Lines (DAL). Although the airline reported a softer-than-expected 0.5% year-over-year increase in September unit revenues, investors were pleased with the company’s raised third-quarter margin guidance, citing hedges against rising fuel costs. The Delta report lifted the fortunes of the other airline stocks. Conversely, the basic materials sector was the biggest laggard among the 10 major sectors, with weakness of note in steel and aluminum stocks. In the materials space, shares of Mosaic (MOS) and Wausau Paper (WPP) were weaker after each issued dour quarterly results earlier today.

The auto sector was also very much in the news today, with data on vehicle sales for the month of September released. The stocks of Ford (F) and Toyota (TM) fell after both automobile makers reported a drop in September sales, while General Motors (GM) stock moved higher after it reported a slight (1.5%) increase in sales. Shares of General Motors also got a boost after well-known hedge fund manager David Einhorn said he believes the company's valuation is cheap. Speaking of Mr. Einhorn, the stock of Chipotle Mexican Grill (CMG) fell after he said at the same conference that the company is facing increasing competition from Taco Bell as well as higher costs. Meanwhile, shares of MetroPCS (PCS) jumped on rumors that the company is in talks to be acquired by Deutsche Telekom AG’s T-Mobile USA unit.

Elsewhere, the major European bourses finished the latest session in the red. The primary culprit behind the retreat was increasing concerns that the weakening global economy will hurt profits at many of the major European companies. However, Spain’s IBEX jumped on hopes that nation will seek a full bailout, a move that could ease investors' concerns over the euro-zone debt crisis.

Looking ahead to tomorrow, the investment community’s attention should be back on the U.S. economy. Specifically, before the market opens, we will receive data on private-sector payroll creation from Automatic Data Processing (ADP). Then a half-hour into the trading day, the Institute for Supply Management will release its latest survey of nonmanufacturing activity for the month of September; the Institute’s companion report on manufacturing activity issued yesterday was better than expected. Also tomorrow, we will receive the minutes from the last Federal Open Market Committee meeting. - William G. Ferguson

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

12:30 PM ET - The U.S. stock market put in a weak performance this morning. At just past noon in New York, the Dow Jones Industrial Average is off 72 points (-0.5%); the broader S&P 500 Index is lower by about three points (-0.2%); and the technology-heavy NASDAQ, which was holding up a bit better, is up slightly. The market’s breadth also indicates some uncertainty on the part of traders, as declining stocks are now only mildly ahead of advancers on the NYSE. However, there is still strength in some market sectors. The conglomerates, consumer non-cyclicals, and health care names are having a good session. In contrast, there is weakness in the basic materials and transportation issues.

Technically, the S&P 500 Index is still consolidating, after a series of big moves up in early September. This is not unusual, and may continue for a while. Notably, we have not seen large-scale profit taking or sharp selloffs, and this suggests some commitment on the part of buyers. However, if the upcoming earnings season becomes disappointing, the mood could change rapidly.

In Europe, the markets were up earlier, but have since pulled back. For the most part, the losses have been minimal. However, France’s CAC-40 was off more significantly. Many traders now think Spain will soon seek a bailout package, and that may actually help shore up its situation. However, uncertainty in the region still lingers. Despite plans for the ECB to play a more active role on the Continent, there are ongoing disagreements about how measures will be implemented.

There were no major economic reports released in the U.S. today. But tomorrow, things will pick up with the release of the ADP Employment Change report for September. The ISM Non-Manufacturing Index is also due out. Further, traders will get a chance to digest the minutes from the September FOMC meeting, and with the ongoing emphasis on the various rounds of quantitative easing, this issuance should be widely watched.

There were a few notable corporate reports released this morning. Mosaic (MOS) is seeing its shares move lower, after the agricultural chemicals company posted weaker-than-expected figures. However, Zumiez (ZUMZ) stock is moving higher, as the retailer reported some positive sales data. Ford Motor (F) stock is weak, after the automaker put out soft monthly sales figures. Actively traded issues moving up include: Metro PCS (PCS) General Motors (GM), and Sirius XM Radio (SIRI). Active stocks moving lower include: Sprint Nextel (S), Nokia (NOK), and Fifth Third Bancorp (FITB). - 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 There is a lot of news out of the apparel sector today, not all of it positive. Indeed, shares of Fifth & Pacific Companies (FNP) are trading sharply lower in the premarket after the company, which owns brands such as Kate Spade, Lucky Brand, and Juicy Couture, cut its 2012 earnings guidance, largely due to weakness at the company’s Juicy Couture business. Shares of Express (EXPR) are indicating an even lower opening this morning, after the specialty apparel retailer said that traffic trends in September were weaker than expected and cut its October-quarter guidance. On the bright side, the stock of Zumiez (ZUMZ) is up in pre-market trading. The mall-based retailer of action sports-related clothing and equipment reported September same-store sales that pleased investors.

In other earnings-related news, Mosaic Company (MOS), a producer and distributor of crop nutrient and animal feed products, has released August quarter results that did not appear to inspire investors, who have bid the stock modestly lower in pre-market trading. – Matthew E. Spencer

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 - Following a strong third quarter, the U.S. stock market started the final period on a fairly positive note yesterday, although much of the moderate strength was confined to the blue chips, as the Dow Jones Industrial Average gained 78 points, after being higher by more some 160 points in the early going.

The news was not as good in the other areas of the market, as the Standard and Poor's 500 index was just nominally in the black, while the NASDAQ and the S&P Mid-Cap 400 were both lower on the day. However, advancing issues did top losing stocks, but the margins were not all that impressive, especially on the NASDAQ, where the plurality of winning stocks over losing equities was just 13 to 10.

Helping the market yesterday was a good report from the Institute for Supply Management (ISM), the Tempe, Arizona-based trade group. Specifically, some 30 minutes into the trading day, the ISM issued data showing that manufacturing activity, which was expected to have contracted nominally in September, for a fourth consecutive month, actually gained nicely, rising to a survey result of 51.5. (Results in excess of 50.0 indicate that the manufacturing sector is expanding.) That result really lit a fire under a market that had been trending just gradually and unimpressively higher at the start. Within minutes of the report, in fact, the Dow, as noted, had jumped by about 160 points. It then stayed near there for much of the middle part of the session, before the doubters emerged again to bring about the much less-imposing close.

Elsewhere, in addition to the good U.S. manufacturing news, there was a report out showing that spending on construction projects fell for a second month in a row in August. The setback was worse than many were forecasting. At the same time, the European bourses rallied on word out late last week that Spain's banks ``stress tests'' had shown a smaller-than-expected capital shortfall.

Now, as we look out to the rest of the week, earnings news is about seven days away from commencing in a big way, as we will then start the parade of third-quarter corporate reports. Specifically, reports will commence next Tuesday with the scheduled profit issuance from aluminum company and Dow-30 component Alcoa (AAFree Alcoa Stock Report). As for economic news, we will be getting data on September auto sales throughout the session today. Then, tomorrow, the ISM will issue its monthly survey on non-manufacturing. Here, a gain is the general forecast. Finally, the week will end with the most critical metric of the month when the Labor Department will issue September figures for non-farm payroll growth and the unemployment rate.

As for the market this morning, the European bourses are slightly higher, in spite of concerns about the economic outlook in Spain and Greece. Over here, the S&P 500 futures are ahead by almost seven points and the NASDAQ futures are better by more than 13 points, presaging a nicely higher opening for stocks when trading gets under way 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.