After The Close - The U.S. stock market fell back at the opening, but managed to pare its losses as the session wore on. Once again, the bargain hunters stepped into the market to support equities. Consequently, a more significant decline was averted. Ultimately, this late-day buying suggests that even at the current levels, there is capital on the sidelines, and investors, late to the party, are still looking for an entry point. At the close of session, the Dow Jones Industrial Average was off 24 points (-0.2%); the S&P 500 Index was flat; and the tech-heavy NASDAQ which was the leader today, closed up seven points (0.2%). Market breadth suggested a mixed session, as declining stocks just slightly outnumbered advancers on the NYSE. Most of the market sectors lost some ground, however. The consumer cyclical group was weak, thanks to sluggishness in the automotive and gaming issues. Capital goods stocks were also off. However, there was some strength in the technology stocks, led by Apple (AAPL). Also, the transportation issues were strong.

Technically, the S&P 500 Index continues to move in a sideways range. Notably, the index is testing new high territory at the 1,475 area. For now, sentiment remains bullish as indicated by the low reading on the VIX. Further, there are now 252 stocks at news highs, versus only 29 at new lows on the NYSE. This highlights just how far the market has come in reversing itself over the past few months. These figures also add to bullish sentiment, as more investors are sitting on profits, and feeling optimistic.

The market got a little help from the economic news this morning. The Consumer Price Index was unchanged in the month of December, with just a modest uptick in the core rate. So, there seems to be little inflation on the horizon, and this supports the Fed’s low-interest rate policy. Industrial production figures showed a mild improvement in December, which is encouraging. Tomorrow, we get a look at the weekly initial and continuing jobless claims data. Also, the housing market will be back in center stage, with the release of housing starts and building permits for December.

The fourth-quarter earnings season has only just begun. Today, we received a few reports from bellwether financials. Goldman Sachs (GS) stock traded higher, after the investment banker reported healthy quarterly results. Also, JPMorgan Chase (JPM - Free JPMorgan Chase Stock Report) saw its stock slip at first, and then move slightly higher, after the bank posted its results. Earnings beat expectations, but investors may have had some concerns about revenues.   – Adam Rosner

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


12:20 PM EST - The major U.S. equity indexes opened the session in mixed fashion and remain on that path, but there is an underlying negative tone to trading, as declining issues hold a sizable advantage over advancers on both the Big Board and the NASDAQ—though the spread has narrowed some in the last hour. Today has brought a plethora of earnings reports, most of which were favorable. However, there appears to be a case of “buy on the rumors, sell on the news” on Wall Street, as expectations of decent earnings results seem to already be baked into equity valuations.

As we pass the midday hour on the East Coast, the Dow Jones Industrial Average is modestly weaker and the broader S&P 500 Index is basically unchanged, despite the aforementioned decent earnings news. Meantime, the NASDAQ is holding its solid gain. The NASDAQ is getting a boost Apple (AAPL), which has a heavy weighting on the tech-heavy exchange. Shares of the tech behemoth are up more than 3% thus far today. The technology and, to a lesser extent, the energy stocks are the best performer among the 10 major sectors, most of which are toiling in the red as trading approaches the second half of the session. Basic materials and industrial stocks are the biggest laggards.

On the earnings front, the big banks and financial services companies are drawing much of the investment community’s attention. Shares of Dow-30 component JPMorgan Chase (JPM - Free JPMorgan Stock Report) are flat after the banking giant reported fourth-quarter profits that exceeded expectations, but also lower revenues. Conversely, the stock of Goldman Sachs (GS) moved higher after the financial services giant handily beat expectations at both the top and bottom lines. Overall, the financial sector is weaker thus far today. Other notable reporters today include eBay (EBAY), Chipotle Mexican Grill (CMG), U.S. Bancorp (USB), and Bank of New York Mellon (BK). In non-earnings news, shares of Boeing (BA) are weaker once again after two Japanese carriers suspended all 787 Dreamliner flights scheduled for today.

It was also a busy morning for economic news. An hour before the market opened, the Labor Department reported that consumer prices for the month of December were unchanged, another indication that inflation remains well in check. Then at 9:15 A.M. (EST), the U.S. Commerce Department released a survey showing modest improvement during December in both industrial production and factory utilization. These two positive reports, though, were somewhat offset by a reading of 47 for the NAHB/Wells Fargo Housing Market index—the expectation was that the metric would come in around 48. Still, the latest homebuilding confidence reading was the highest since April 2006 and another indication that the housing sector is on its way back. Shares of the major public homebuilders are mixed following the news. Investors should also note that the economic news is not finished today, as this afternoon we will receive the Federal Reserve’s latest Beige Book summation of economic conditions shortly after 2:00 P.M. (EST).

Meantime, the major European bourses are also mixed as trading draws to a conclusion on the Continent. Most of the market action is being driven by economic news. London’s FTSE 100 is weaker after a major credit ratings agency warned earlier today that the United Kingdom risks losing its triple-A credit rating if the nation’s debt load is not reduced. Other economic news from the Continent includes data showing that the euro zone’s Consumer Price Index came in at 2.2%, which matched expectations. After a weak start, Germany’s DAX and France’s CAC-40 indexes have rallied and are now in positive territory. - William G. Ferguson

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 season is beginning to ramp up with several companies reporting this morning, including banking conglomerate and Dow-30 component JPMorgan Chase (JPM Free JPMorgan Chase Report), which turned in a strong December-period earnings performance, and the stock is up marginally in the premarket. Meanwhile, securities brokerage giant Goldman Sachs (GS) posted fourth-quarter earnings that beat expectations, sending its stock slightly higher in early morning trading. Restaurant chain The Wendy’s Company (WEN) also reported impressive fourth-quarter results, and its shares moved higher before the bell.

In other news, computer-maker Dell Inc. (DELL) appears to be deep into buyout talks with private equity firm Silver Lake Partners, who have reportedly reached out to several banks, as it looks to secure funding to take the $19 billion company private. Shares of Dell eased in early morning trading, though.  – Kathryn M. Drew

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


Before The Bell - The Dow Jones Industrial Average eked out another gain yesterday, its fifth in a row, in the wake of some better-than-expected news on both the inflation front and at the retail counter.

Specifically, one hour before the stock market opened, the Labor Department chimed in with a report showing that producer prices had dipped by 0.2% in December. Now, that was less of a decline than had been suffered in November, when prices had skidded by 0.8%. Yet, it was enough of a pleasing result to help light an early fire under the bulls. That upbeat sentiment was underpinned a bit further when at the same time, the U.S. Commerce Department intoned with data showing that retail sales had stepped up to the plate last month, posting an increase of 0.5%. That was notably better than the 0.2% gain that had been forecast by economists. That one-two punch helped the market get off to a modestly positive start, eventually lifting the Dow to a closing gain of 28 points. Most of the other averages, especially the smaller and mid-cap indexes, also did well. The one outlier was the tech-heavy NASDAQ, which fell almost seven points on further weakness in the shares of tech icon Apple Inc. (AAPL).

In other news, there were earnings reports from several of the nation's specialty retailers, including lululemon athletica (LULU) and Coldwater Creek (CWTR). Both of those companies, for differing reasons, appeared to disappoint investors, and their stocks fell. On the other hand, Express (EXPR) raised its quarterly outlook sending the shares of that apparel retailer sharply higher on the day. Elsewhere, earnings are starting to trickle in from a number of key names, and the profit beat will heat up some more in the coming days, most notably tomorrow when a quartet of Dow-30 companies issue their quarterly statements. For the most part, we expect  results to match, or modestly exceed, recently lowered consensus estimates.

In other news, the government has just issued its companion inflation report for the month, with the release of the Consumer Price Index for December. Like the Producer Price Index issued yesterday morning, this metric also affirmed the absence of inflationary pressures, as prices were unchanged last month. Moreover, even after we back out the volatile food and energy components, to get the so-called core rate of the CPI, we find that such prices were up by just 0.1% for the month. Later this morning, the Commerce Department will release figures for industrial production and factory usage for the latest month. Small gains in each series are expected. Finally, this afternoon, the Federal Reserve is scheduled to put out its Beige Book summation of economic activity across the country. Those findings are used to help the central bank formulate monetary policy at its next FOMC meeting, which is set for late this month.

Now, as we look out to a new day, we find that the market closed lower overnight in Asia, with the largest loss suffered by Japan's Nikkei. Stocks are also somewhat weaker in Europe. Over here, the futures are mixed, presaging a listless opening when trading gets under way in less than an hour from now. Besides the flood of pending profit reports, meantime, Wall Street will also need to keep an eye on the doings in Washington, where the clock is ticking down to the deadline for raising the debt ceiling. That promises to be a highly contentious debate in the weeks to come, and could well influence market trading. – Harvey S. Katz

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