After The Close - U.S. stocks opened today’s session on the plus side and, after a mid-morning dip, continued to plow upward throughout the day. Undoubtedly a big factor behind the market’s upbeat session was the news from Washington that the imminent debt-ceiling debacle would at least be forestalled for another few months. The House passed a bill allowing the government to borrow enough funds to avoid default. The measure allows for the current $16.4 trillion debt cap to be exceeded and then reset on May 19th to reflect the additional debt taken on over the span.

Adding more fuel to the bulls’ charge today were solid reports from tech giants International Business Machines (IBM - Free IBM Stock Report) and Google (GOOG), both of which exceeded Wall Street expectations. Elsewhere, positive earnings news from McDonald’s (MCD -Free McDonald's Stock Report) helped lift the hamburger superpower’s shares up, and even weaker earnings comparisons from fellow Dow component United Technologies (UTX - Free United Technologies Stock Report) were not enough to derail the general goodwill of the market, as its shares also rose modestly on the day.

Altogether the three major indexes gained ground for the day. The Dow Jones Industrials rose 67 points (or half a percent); the NASDAQ Composite tacked on 10 points; and the broader S&P 500 eked out a two-point gain, edging it slightly closer to the psychologically significant 1,500 mark.

The House vote on the debt limit extension bill came too late to have any real impact on the overseas bourses. Trading there ended the day mixed, with gains in London’s FTSE 100 and Germany’s DAX counterbalanced by a decline in France’s CAC 40. A downward revision in the International Monetary Fund estimate for global growth in 2013 didn’t do much to help matters. The IMF now calls for world output to grow 3.5% this year, down from its previous outlook for 3.6% growth. Specific to Europe, however, it lowered its target from a 0.2% expansion to a 0.2% contraction.

Looking ahead, the market will next turn its attention on tech giant Apple (AAPL), which was scheduled to release earnings after the close of today’s trading session.  Shares of the market heavyweight have shed some 30% in value over the last few months, as questions have been raised regarding the strength of its iPhone business. Any disappointments there could have repercussions on tomorrow’s trading session.   - Mario Ferro

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


12:35 PM EST - The U.S. stock market is putting in a somewhat mixed performance this morning. As we pass the noon hour in New York, the Dow Jones Industrial Average is up 60 points (0.4%); the S&P 500 Index was off slightly, but has since made its way into positive territory; and the tech-heavy NASDAQ is adding on 10 points (0.3%). Market breadth still suggests a mixed tone, as declining stocks are outnumbering advancers by a thin margin on the NYSE. Strength can be found in the technology and services sectors. However, there is considerable weakness in consumer cyclical group and in the utilities.

Technically, the S&P 500 Index continues to remains near a 52-week high. Trading volumes have improved lately, as traders have committed funds to the rally. Sentiment is quite bullish, as the VIX is reading 12.4, which is extremely low. While the market seems “overbought”, it is also important to note that sentiment can stay at extremes for quite some time in bull markets. 

There was little economic news released this morning. The FHFA Housing Price Index showed a 0.6% increase in November, which is encouraging, and comes after a similar improvement in October. We will get more information on the housing market on Friday, when new home sales for December are released. Meanwhile, tomorrow, the employment situation takes center stage, with the release of the weekly initial and continuing jobless claims data.

For now, the attention is on the fourth-quarter earnings releases coming out with greater regularity. Once again, a few large Dow components put out reports. IBM (IBMFree IBM Stock Report) stock is up sharply, after the technology leader issued better-than-expected results and healthy year-ahead guidance. Also, in the Dow, McDonald’s (MCD Free McDonald’s Stock Report) is slightly higher, after the restaurant operator posted strong bottom-line results. In the technology sector, Google (GOOG) stock is trading higher, after that company posted mixed results. In retail apparel, Coach (COH) stock is off sharply on a disappointing release. Meanwhile, traders will be waiting for Apple (AAPL) to put out its figures after the close today. This report will no doubt be widely watched, as Apple held shares have been pulling back lately. The stock is now at $509 a share, down from the 52-week high of $705. - 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 The earnings floodgates are open wide again today. Investors are digesting quarterly reports from several Dow-30 components, and appear to be pleased with what they see. Shares of technology giant International Business Machines (IBMFree IBM Stock Report) are up nicely ahead of the bell, while shares of restaurant operator McDonald’s (MCDFree McDonald’s Stock Report) and diversified manufacturer United Technologies (UTXFree United Technologies Stock Report) are indicating slightly higher openings. Other stocks advancing sharply in the premarket on earnings news include Internet search behemoth Google (GOOG), light emitting diode (LED) manufacturer Cree, Inc. (CREE), and medical supplies company Intuitive Surgical (ISRG).

It’s not all good news, however, and Coach (COH) stock is plunging in pre-market trading, after the high-end handbag and leather goods retailer reported disappointing December-period results. Shares of aerospace/defense company General Dynamics (GD) are also down ahead of the bell. – 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 - Wall Street started the holiday-shortened week in much the same way that it has begun most other weeks so far in the new year--that is by advancing. This time, the inducement for the better performance was corporate earnings, which are thus far coming in somewhat better than expected for the recently ended fourth quarter. What's more, sales are stronger than many had forecast, and that may well be as important--if not more so. That is because better revenues are often a prelude to improving earnings down the road.

All told, the Dow Jones Industrial Average, which gained another 63 points yesterday, reached a 12-month high in the process, while the Standard and Poor's 500 Index, a seven-point gainer, set another five-year peak. Even the NASDAQ, weighed down by a modest amount of weakness in the shares of Internet search engine Google (GOOG), managed an eight-point gain, boosted by a late buying rush. The small- and mid-cap indexes did proportionately better, and those mutual funds heavy in those stocks fared especially well in the latest session.

Now, today, we are getting a batch of additional key profit reports, led off by United Technologies (UTX - Free United Technologies Stock Report), which took a large charge in the latest quarter, but did not disappoint Wall Street otherwise. That stock, in response, is indicating a slightly higher opening this morning. The reception for the earnings report from International Business Machines (IBM - Free IBM Stock Report), which issued its latest quarterly figures after the stock market closed yesterday, is much more eye catching. To wit, that issue is soaring in the pre-market this morning. Specifically, after closing the regular session at $196.08, IBM stock is indicating an opening at $204.00. The reason for the optimism is that the tech giant's net rose by 6.3% in the quarter, as its software business and sales to emerging markets, both under pressure earlier, have apparently returned to a growth mode. Later on this afternoon, an even bigger tech factor, Apple Inc. (AAPL), will issue its quarterly results. That release, which is scheduled for after the close of trading, could be a major influence on Wall Street activity tomorrow. The impact of Apple cannot be overstated, as the issue is the largest equity, by market capitalization.

Meanwhile, the economy, which was mildly supportive yesterday, with the release of data showing a decent level of activity and improving prices in the home resales market, will be less of a factor today, as the calendar is largely clear of major releases. That will change a little over the next two days, as tomorrow will bring the release of data on weekly and continuing jobless claims and Friday will see the issuance of the monthly report on new home sales.

As to Washington, the daily and weekly soap opera drones on today, as the House of Representatives is scheduled to vote on a motion to increase the nation's $16.4 trillion borrowing limit. Without that increase, the Treasury would run out of money to pay all of its obligations. An up vote, which seems likely, but is not assured, in our view, would calm the markets somewhat. But a permanent deal on both the debt ceiling and mandatory spending reductions is nowhere in sight. And the inability to fashion these more difficult agreements could weaken sentiment again, as was the case in December, when the fight to extend the so-called Bush Era tax rates was all the rage in the Capitol. There, an eleventh hour accord was structured on December 31st, helping to avert a possible equity market meltdown to start the new year.

Finally, looking overseas, stocks were lower in Asia overnight, with Japan's Nikkei 225 tumbling by 2.1%. The situation is better in Europe, where the principal bourses are generally flat to up slightly. And on our shores, a modestly better opening is ahead, according to the latest action in the futures, led notably by the presumed much higher start to the trading day in the shares of Dow-30 component IBM.

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