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After the Close - A modest mid-afternoon rally lifted Wall Street out of the doldrums today, although for much of the session performance was uninspired, held back by concerns over how the impending flood of earnings releases would shape up, a further slide in Apple (AAPL) shares, and the upcoming battle in Congress about raising the debt ceiling.

At the close, Dow Jones Industrial Average had gained 28 points but the NASDAQ had lost seven points. Winners topped losers by about 17 to 13 on the New York Stock Exchange. Notably, there was strength in the small and mid-cap names, and in the transportation sector.

Still, Apple’s fall from grace cast a long shadow, dragging down sentiment toward shares of the nation’s leading phone companies. Dow components AT&T (T Free AT&T Stock Report) and Verizon (VZ Free Verizon Stock Report) each have deals with Apple, and those stocks were among the Dow-30’s weakest performers.  The perception is that the competition is catching up to the gadget maker, causing its shares to fall below the $500-a-share level, at $486. Having traded above $700 a share at its peak, the 30%-plus retracement it has experienced is significant.

Meantime, Fitch, a leading bond-ratings agency, warned that a failure by lawmakers to raise the debt ceiling in a timely fashion would undermine confidence in the United States as a reliable borrower and incur a review of its top-notch credit rating.  Investors do not want to see a repeat performance of the 2011 fight over the debt ceiling that hurt the economy and led to a downgrade of the nation’s AAA credit rating by another organization.

As far as the economy goes, it was two steps forward and one step back today, with positive December data on retail sales and the Producer Price index trumping a disappointing New York Fed manufacturing survey for January.

Tomorrow brings a fresh batch of economic data in the form of the Consumer Price Index at 8:30 A.M. (EST), and a look at Industrial Production at 10:00. Both readings, for December, are expected to be tame. Then, at 2:00 P.M., the Fed’s Beige Book, a briefing on current economic conditions, is due to be released.

Separately, earnings reports from JPMorgan Chase (JPM Free JPMorgan Stock Report), U.S. Bancorp (USB), Goldman Sachs (GS), eBay (EBAY), and Charles Schwab (SCHW) are also on tap. All of those companies are expected to report higher share net, with investors looking for especially strong profits from JPMorgan Chase and Goldman Sachs.  - Robert Mitkowski

At the time of this writing, the author did not have positions in any of the stocks mentioned.     

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12:30 PM EST - The U.S. stock market opened lower this morning, but is now firming up. Our sense is that the averages may well find their way into positive territory in the afternoon, as we have seen late-day buying on many occasions lately. As we pass the noon hour in New York, the Dow Jones Industrial Average is still off 11 points (-0.1%); the S&P 500 Index is lower by two points; and the tech-heavy NASDAQ which was struggling earlier in the session, is now off 14 points (-0.4%). Market breadth is close to even, as declining stocks are just ahead of advancers on the NYSE. The market sectors are mixed, but there is some strength in the transportation, financial, healthcare, and consumer stocks. The technology group is the laggard again today, with shares of Apple Inc. (AAPL) again off sharply.

Technically, the S&P 500 Index has been trading in a choppy range for the past several sessions. Notably, the market staged a dramatic two-day bounce about two weeks ago, so some consolidation is not out of order, especially as the averages start to test new high territory. For now, a sideways trading range may even be helpful, as it allows traders to take profits in an orderly manner, without triggering a sharp selloff.  Also, the trading range allows investors a chance to get comfortable with the averages at their current level. The direction of the market will likely hinge on the quality of earnings reports that come out over the next few weeks. A series of strong reports, including optimistic guidance, could easily provide a catalyst for a move higher. Certainly, better numbers from the banks and the housing-related issues would be welcome. On balance, the nation’s financial situation still needs work, even though a move off the “fiscal cliff” has been averted, for now. Developments on this front could create further volatility for traders. 

There has been some economic news to report this morning. Retail sales increased 0.5% in the month of December, which was better many analysts had expected. However, the figure, excluding auto sales, was somewhat less impressive. There also are no inflation problems to worry about just yet, as the Producer Price Index dipped 0.2% in December. The economy in the New York region is recovering in a choppy fashion, however. The Empire Manufacturing Survey came in with a figure of -7.8; economists had been looking for a higher number. 

The fourth-quarter earnings season is just kicking off. Retailer Express (EXPR) shares are up sharply, after the company raised its quarterly guidance. Elsewhere, widely-watched Lululemon (LULU) is seeing its stock slip. That company issued a decent quarterly outlook, but some analysts have concerns over the top line. -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 There is some earnings news out today. Shares of Forest Laboratories (FRX) are trading notably lower in the premarket, after the drugmaker released weaker-than-anticipated December-period results. Meanwhile, homebuilder Lennar Corp. (LEN) has reported November-quarter earnings that were better than expected, though the stock is indicating a slightly lower opening. Bigger movers include shares of lululemon (LULU), which are down sharply in pre-market trading, after the retailer of high-end athletic apparel’s updated January-period guidance failed to live up to investors’ lofty expectations. Conversely, the stock of Express, Inc. (EXPR) is surging ahead of the bell, after the retailer of apparel and accessories for young men and women increased its January-period outlook.

In the technology realm, shares of Facebook (FB) could see active trading today, as the social network operator has a major press event scheduled for later in the day, the topic of which is unknown, but subject to much speculation. Finally, Dell (DELL) stock looks poised to continue climbing higher when the market opens. Shares of the computer manufacturer jumped yesterday, after reports surfaced that it may be in talks with several private-equity firms about being acquired and taken private. – 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 - Stocks largely marched in place yesterday for the second trading day in succession, following a series of more meaningful back-and-forth moves during the previous four trading days. Once again, it was a combination of sparse economic news and the basic absence of significant earnings reports that contributed heavily, apparently, to the latest indecision on Wall Street.

Now, that will all be changing. First, a fairly busy week for economic releases is now getting under way with a pair of inflation reports, a critical release on retail spending, a key industrial survey, a closely watched data issuance on housing starts, and the weekly report on initial and continuing jobless claims on the calendar. Already this morning, the December survey on retail spending has been issued, as has last month's figures on producer prices, both of which were better than forecast, and are summarized below.

Meanwhile, the earnings parade is picking up and we will be seeing a torrent of quarterly statements issued over the next fortnight, as Corporate America's results for the just-ended fourth quarter are chronicled. On the whole, we expect the reports to be largely in line with, or nominally better than, the lowered guidance issued in recent weeks. The profit bar has been set low enough, we believe, that many companies may beat the consensus, if only modestly. A big part of how Wall Street reacts will be how these companies perform on the sales line and what their future guidance holds.

As to the markets this morning, the equity futures on our side of the Atlantic are off moderately, with the Standard and Poor's 500 Index and the NASDAQ futures off by five and seven points, respectively. This descent comes on the heels of cautious trading in Europe, where the principal bourses are all modestly lower thus far. In Asia overnight, the indexes were generally up modestly, with China's Shanghai Composite ahead by 0.6% and Japan's Nikkei better by 0.7%. However, the Hong Kong market was flat-to-slightly lower.

As to the economic side of things, data just out showed that the Producer Price Index dipped by 0.2% in December; consensus was for an easing of just 0.1% for the month. Meanwhile, with the core PPI up just 0.1% (that metric excludes food and energy prices) and with the prior month's initially estimated 0.8% decline not revised, inflation continues to be very benign. At the same time, retail sales for December came in somewhat stronger than forecast, rising by 0.5% for the month; expectations had been for a gain of just 0.2%.
       
All in all, then, this busy week for the economy is starting off well, and that is helping, if ever so slightly, to offset some of the evolving angst over what is developing, or not developing, in Washington regarding the upcoming negotiations on spending cuts and the hoped-for increase in the nation's debt ceiling. Add in some initial concerns over the flood of pending earnings reports, and we likely have the makings of a lower start on Wall Street this morning. – Harvey S. Katz

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