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After The Close - The abbreviated volatile trading week on Wall Street—a historic one that witnessed an unprecedented two-day closing due to the devastating effects of Hurricane Sandy—concluded on a dour note for investors. Our sense is that most of today’s decline was the result of profit taking after Thursday’s gains—where the S&P Mid-Cap 400 Index led the way with an advance of 2.4%--and ahead of next week’s Presidential Election. The major equity indexes moved higher yesterday on some encouraging economic data, and thus when today’s good, but not great, report on employment and unemployment (more below) was released, profit taking occurred after an initial uptick. It probably was the old case of buy the rumor, sell the news. At the closing bell, the Dow Jones Industrial Average, the NASDAQ, and the S&P 500 were down sharply. In the case of the Dow 30 and the S&P 500, they gave back just about all of yesterday’s gains. Overall, declining issues outpaced advancers by more than a two-to-one margin on both the Big Board and the NASDAQ. 

As noted, the day’s big news came ahead of the commencement of trading on these shores. At 8:30 AM (EDT), the Department of Labor reported that the nation added 171,000 jobs in October, notably exceeding expectations. It marked the 25th consecutive month of job gains, but the rate of growth, while better, remained sluggish. The prevailing consensus is that several months of jobs creation in excess of 200,000 positions is needed to make a significant dent in the unemployment rate. Not surprisingly, the jobless rate inched up last month to 7.9%. The U.S. labor picture will surely be on the minds of many voters when they make their way to the polls next Tuesday. In recent weeks, the U.S. economic reports have been much improved, which is a welcome sight ahead of the fast-approaching holiday shopping season. Next week, the economic calendar is pretty sparse, with the exception of respective reports on non-manufacturing activity and the trade gap on Monday and Thursday.

The final day of the trading week brought some more earnings news. Of note, Dow-30 component Chevron (CVX) reported revenues and earnings declines of 9.9% and 31%, respectively. Not surprisingly, shares of the oil giant, along with those of industry peer Exxon Mobil (XOM) were among the biggest decliners in the index of 30 bellwether companies. The energy and basic materials groups were laggards in the latest session. Conversely, the consumer cyclical group performed relatively better than most of the other 10 major sectors, helped by strong quarterly results from several companies in the group. Next week earnings season begins to slow down, with only one Dow-30 component scheduled to report.

It was not a good day to be long commodities, either. It was a sea of red ink across the energy, precious metals, and agricultural categories. The two most closely watched offerings, gold and oil, were down sharply. Our sense is that today’s upside breakout action in the US dollar, which makes commodities less attractively priced in overseas markets, is weighing on the groups. The sharp drop in energy futures was also probably due to the ongoing tragic fallout from Hurricane Sandy, which will likely penalize GDP growth in the final quarter of this year.

Looking ahead to next week, trading may be a bit ho-hum during the first two days as investors are unlikely to take sizable positions ahead of the results of Tuesday’s Presidential Election. That said, investors should keep an eye on retailing stocks as they may be active on the latest data on non-manufacturing (services) data. The consumer accounts for some two-thirds of the nation’s economic output, so the results of this sector will be closely monitored with the holiday shopping season kicking off just three weeks from today with Black Friday. - William G. Ferguson

12:15 PM EDT - The U.S. stock market opened higher this morning, attempting to extend yesterday’s gains on good payroll news. Nonetheless, the move was short-lived as the major averages quickly gave up their gains, and slipped into negative territory. The pop at the open likely came in response to the aforementioned favorable economic news released earlier today. Specifically, theDepartment of Labor reported that non-farm payrolls increased by 171,000 jobs in October. This showing reflected notable strength in the private sector. Moreover, this figure was considerably better than many analysts had anticipated, and was also ahead of last month’s reading. However, the headline unemployment rate actually ticked up slightly to 7.9%, which met expectations. Traders may have anticipated that such good news was coming yesterday, when they saw the solid reports for weekly jobless claims, and the ADP issuance on private sector job growth. So that would explain the lackluster reception to today’s news. Elsewhere, the Department of Commerce noted that factory orders rose 4.8% in September, which stands in contrast to the decline in orders posted in August. 

As we pass the noon hour in New York, the markets are coming off their lows. However, the Dow Jones Industrial Average is still off 37 points (-0.3%); the broader S&P 500 Index is down two points (-0.2%); and the NASDAQ is lower by nine points (-0.3%). Market breadth shows a negative tone to the session, as declining issues are outnumbering advancers by about 2 to 1 on the NYSE. Weakness can be found in most of the market sectors. There are losses in the basic materials and financial issues. In contrast, there is some strength in the conglomerates.
Technically, the S&P 500 Index tested its 50-day moving average, located at the 1,435 area, this morning, and then pulled back. This will be a key level to watch, at least for technicians.

Meanwhile, the third-quarter earnings reports are still coming out, but with less force. Most of the larger companies have already reported. Nonetheless, today we heard from coffee giant Starbucks (SBUX). That issue is trading higher on a good report.  Also, in the high-priced names, Priceline.com (PCLN) is up about $64, to almost $650 a share today, after the Internet company posted solid results. 

In Europe, the markets are closing out a choppy session. However, there were solid gains on Germany’s DAX and on France’s CAC-40.   - Adam Rosner

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

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Stocks to Watch from The Survey – In the tragic wake of Hurricane Sandy, trading has resumed on Wall Street, and third-quarter earnings season remains in full swing. Among companies in the limelight today is oil giant and Dow-30 component Chevron Corp (CVX - Free Chevron Stock Report), which appears poised to open slightly lower this morning after reporting earnings that were below consensus. In that same vein, Alcatel-Lucent (ALU), a leading telecom-equipment supplier, is trading sharply lower in the premarket, after posting a steep third-quarter loss.

Meanwhile, online travel agent Priceline.com (PCLN), insurance company AIG (AIG), and coffee chain Starbucks (SBUX) are all indicating higher openings this morning after beating expectations in their most recent periods. – Kathryn M. Drew

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 - The stock market, which was very hesitant to take either a bullish or a bearish stand on Wednesday, the first active session since the onset of the devastating and tragic Hurricane Sandy, showed no such indecision yesterday, as the market ran with some better-than-expected economic news to power ahead strongly.

Specifically, investors moved to buy aggressively as data were issued yesterday morning showing that initial jobless claims fell more than expected in the latest week, consumer confidence--a key metric in any case, but so much more so as the all-important holiday shopping season draws near--rose more than forecast, and manufacturing activity firmed up anew.

So, armed with these encouraging survey results, and with a report showing a greater number of private-sector payrolls created last month than generally expected, stocks rose from the start and the bulls never looked back, with the Dow Jones Industrial Average pushing ahead by 136 points, to close above 13,200. The Standard and Poor's 500 Index gained a tad more than the Dow on a percentage basis, 1.09% to 1.04%. However, the real winners were the NASDAQ, which climbed 43 points, or 1.44%, and the S&P Mid-Cap 400, which surged by 23 points, or 2.36%.

All of this took place on a day that saw the death toll from Hurricane Sandy tragically climb to 94--and that figure will, unfortunately, likely increase further, while the cost of the storm, which had earlier been estimated at some $25 billion, has now been doubled. We suspect that figure will rise further, as well. The nation's economy, which was not all that vigorous to begin with, has also been dealt a body blow, with our expectations for the fourth quarter being cut from an estimated GDP growth rate of roughly 2%, to a range of 1.2% to 1.5%. As we have noted, moreover, the risks are largely to the downside in this new expectation.

Finally, in data just issued moments ago, the Federal Government, and more specifically, the U.S. Labor Department, has reported that the nation added 171,000 jobs in October. That was better than the 120,000 expected. Meanwhile, the payroll gain for September was revised up from an increase of 114,000 jobs to a rise of 148,000 jobs, a notable increase. At the same time, the jobless rate inched up from 7.8% to 7.9% last month, which was expected by many economists. All told, this most pivotal report of the month was a positive one, and further underscores that the economy--pre-Sandy--looked to be firming up nicely. Now, however, the picture has markedly and tragically changed--especially for those who have sustained heart-breaking personal losses.

The markets, meantime, liked what they saw from Washington, and an earlier mixed performance by the futures has turned decidedly bullish, with the S&P 500 Index futures now ahead by almost six points; the NASDAQ futures are showing similar strength, presaging a nicely higher opening for Wall Street in less than an 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.