After The Close - It was a rollercoaster ride on Wall Street today—though none of the major U.S. indexes strayed far from the neutral line in the process. The equity indexes started the session in negative territory then fought back by mid-session, before putting in an uninspiring performance over the final few hours of trading. At the closing bell, the Dow Jones Industrial Average, the NASDAQ, and the S&P 500 Index were little changed. The lack of direction to trading in the afternoon was evident in the narrow spread between advancing and declining issues on both the Big Board and the NASDAQ.

From a sector perspective, there was some relative strength in the consumer cyclical and basic materials sectors. Within the consumer cyclical area, the discretionary stocks fared well, helped by strong showing from Polo Ralph Lauren (RL) and, to a lesser extent, Walt Disney (DIS - Free Disney Stock Report). Both companies reported good quarterly results within the last 24 hours. Meantime, the materials space was helped by a good performance from the steel stocks. The steel issues moved higher after reports surfaced that Reliance Steel & Aluminum (RS) had agreed to acquire Metals USA (MUSA). Other stocks that rose on good quarterly results were CVS Caremark (CVS) and Cerner (CERN). Conversely, the laggards today were the energy, consumer noncyclical, and technology stocks. Meantime, Allstate (ALL) and Visa (V) were scheduled to announce their latest quarterly results after today’s close.

Weighing initially on equities here and more so on the Continent were concerns about one of Italy’s most renowned banks, Mote dei Paschi. Rumors are swirling that Italy's third largest bank may have lost up to one billion euros on opaque derivatives trades, far higher than initial estimates. The European bourses, including Germany’s DAX and France’s CAC-40, were markedly lower on the aforementioned banking worries and concerns that Italy’s former Prime Minister Silvio Berlusconi has closed a gap in the recent polls and is now trailing by a small margin in his attempt to become the financial struggling country’s prime minister again. Italy’s bond yields rose and the euro weakened against the dollar today.

Some of the aforementioned uneasy feelings in the euro zone found their way to these shores and investors acted the way one would expect, that was by buying fixed-income securities and the precious metals. The price of gold moved higher on New York Mercantile Exchange, while the yield on the benchmark 10-year Treasury note, which moves in the opposite direction to the price, fell back to a closing yield of 1.97%.  - 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 EST -  The U.S. stock market opened lower this morning, but is attempting to reverse course. At just past noon in New York, the major averages have nudged slightly into the black. Market breadth still suggests some weakness, as declining stocks are outnumbering advancers by a thin margin on the NYSE. Most of the market sectors are still showing losses, with notable weakness apparent in the energy stocks. The consumer non-cyclical issues are also laggards. Nonetheless, the basic materials sector is making positive strides, along with the consumer cyclical names.

Technically, the S&P 500 Index is still above the 1,500 mark, which is likely a key support level. The market has gotten a bit more volatile lately, as traders may be more actively looking for direction. It is important to note that the current rally has been going on for a while now, with little real profit taking. Notably, we saw some big moves on the VIX lately. There may be an increase in flight-to-safety behavior, emerging, too. Today, investors are buying 10-year Treasuries, as well as gold.

Traders in the U.S. are largely shrugging off a strong session in Asia. Last night, the Nikkei logged an almost 4% gain, driven by news of a political shakeup. New leadership is expected to be much more accommodating monetarily. The enthusiasm did not carry over to Europe, as those markets put in mixed session. Specifically, there were steep losses on France’s CAC 40.

Back on our shores, there was little economic news released, which does little to assure traders, and possibly sends them looking for information abroad. Tomorrow, we get a look at the employment situation, when the weekly initial and continuing claims figures are released. We also get a preliminary fourth-quarter productivity report.

Meanwhile, the fourth-quarter earnings season is still in progress. However, many of the large-cap names have already reported, and some of the steam that normally accompanies the quarterly releases may be starting to die down. Today, we heard from Time Warner (TWX). That issue is higher after the company put out a positive report. CVS Caremark (CVS) also put out a decent release, but that issue is trading lower. - Adam Rosner

At the time of this article’s writing, the author had a position in Time Warner (TWX).


Stocks to Watch from The Survey- Entertainment company and Dow-30 component Walt Disney (DIS Free Disney Stock Report) is on the incline in premarket trading today. After the closing bell on Tuesday, it reported that fiscal-first-quarter net income fell 5.6% but still beat consensus expectations. Some buzz over the fact the company provided some color on its plans to film a stand-alone Star Wars movie has shareholders excited.

As far as companies that are announcing results today go, much of the spotlight is on Time Warner (TWX), Visa (V), and News Corp. (NWS). These three equities have widespread appeal and are strong indicators for the health of the overall economy. Time Warner has already put out its release, and its shares are up handsomely after earnings topped expectations and it increased its quarterly payout by 11%.

In the tech realm, Zynga Inc. (ZNGA) shares were on the rise after the San Francisco social-games specialist reported a narrower-than-anticipated loss and higher-than-expected bookings for the fourth quarter. This company has strong ties to Facebook (FB), and with that social networker’s recent share-price improvement, prospects for ZNGA are brightening in tandem. - Erik M. Manning

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


Before The Bell - The bulls, who seemingly could not take the rarified air above 14,000 on the Dow Jones Industrial Average--which Wall Street had successfully crossed on Friday, but which it could not stay above on Monday--were back at it again yesterday. True, the latest move above that psychologically important level could not be held, as there was a small amount of backtracking at the close. Nevertheless, in at least getting there again, and in sustaining most of the gain needed to cross above that crest, suggests that the optimists are still in charge.

All told, even with some late profit taking, the Dow closed the day with a gain of 99 points, lifting that composite of mostly blue chip companies, which surged to an intraday high of 14,014, to a close of 13,979. The other averages also climbed, regaining most of the ground surrendered on Monday. Helping stocks were strong gains in the technology sector, with Computer Sciences (CSC) and Apple (AAPL) leading the way higher in that space.

Also helping the market was a strong economic issuance. To wit, the Institute for Supply Management, the Tempe, Arizona-based trade group, which late last week had issued supportive data on manufacturing activity across the country, chimed in yesterday morning with a somewhat better-than-expected report on non-manufacturing. Specifically, the index there came in at 55.2 for January, which suggests that the services area was continuing to expand nicely. (A reading above 50.0 implies that this sector is gaining strength.) Expectations had been for a score of 55.0. This was the 37th consecutive report showing an increase in activity in this critical arena, and further underscores our expectation that the nation's gross domestic product, which contracted by 0.1% in the fourth quarter, will resume its growth in the current stanza.

Also helping matters was a report out of the euro zone showing that private-sector activity in that region had contracted at the slowest pace in 10 months. Should this trend be sustained, it would naturally serve as an indication that the recession now endemic to the region would be a shorter-lived affair than we have been assuming. That presumptive stability would lessen the chances for serious fallout on our shores.

As to other influences, earnings season is winding down rapidly, but we did see a pair of notable issuances yesterday, with troubled coal company, Arch Coal (ACI) reporting a larger-than-forecast loss in the latest quarter. That stock plummeted in trading yesterday, in response, losing $0.89, or 13%, to $6.04. It was another story for entertainment giant Walt Disney (DISFree Disney Stock Report), which reported after the close of trading and outperformed expectations. That Dow-30 component is indicating a smartly higher opening this morning. As to the market at large, the Standard & Poor's 500 Index futures are off nearly seven points and the NASDAQ futures are in the red by 14 points. Thus, there could be a difficult opening ahead when trading resumes in less than a half hour from now.

At the time of this article's writing, the author has positions in DIS.