After The Close - The U.S. equity indexes started the session in positive territory, helped by some initially encouraging tidings from the euro zone, but trading quickly turned sour on these shores and on the Continent, where a portion of the early gains were retraced. On the homeland, the selling intensified as the day progressed, with sentiment from Europe taking a turn for the worse (more below) and investors showing some concern about the automatic spending cuts that are set to kick in on Friday if the policymakers in Washington fail to reach an agreement. At the closing bell, the Dow Jones Industrial Average, the NASDAQ, and the S&P 500 Index were off 216, 46, and 28 points, respectively. In the case of the Dow, the turnaround was nearly 300 points. As has been the norm over the last three weeks, the index of 30 bellwether companies was unable to hold the 14,000 level for any significant amount of time. Overall, declining issues outpaced advancers on both the New York Stock Exchange and the NASDAQ.

None of the top 10 major sectors was spared today, with the biggest laggards being energy, industrial, and financial stocks. Within the energy space, the stocks of the major oil companies, including Exxon Mobil (XOM Free Exxon Stock Report) and Chevron (CVX Free Chevron Stock Report), were in negative territory. In the industrials category, shares of the heavy electrical equipment manufacturers were down significantly.

There was some “flight-to-safety” shown by investors unnerved by the tidings from the euro zone and the approaching sequestration deadlines on Capitol Hill. Demand for both gold and bonds picked up today. The price of gold jumped more than $20 an ounce, while the yield on the benchmark 10-year Treasury note, which moves in the opposite direction to the price, fell seven basis points in the latest session. While investors were initially encouraged that Italy’s elections would be won by center-left bloc of Pier Luigi Bersani, who would likely continue the austerity agenda now in place, sentiment turned negative after media reports said that an early vote count showed that the center-right group of former Prime Minister Silvio Berlusconi was leading in the Senate race. A divided Parliament could disrupt the country's fiscal reforms and the euro zone's stability.

Meantime, there was not a lot for investors to chew on over here. There was no notable data on the economy. On the earnings front, we got quarterly results from home improvement retailer Lowe’s Cos. (LOW) and Hertz Global Holdings (HTZ). Investors should note that shares of Affymax (AFFY) plunged after severe allergic reactions and the deaths of some kidney dialysis patients prompted the recall of its anemia drug.

With the economic news scarce today and the earnings reports slowing considerably, investors turned their attention to Europe and the budget talks on Capitol Hill. With regards to the latter, the two political parties face an end of the week deadline. Speaking at the National Governors Association meeting in Washington, President Barack Obama urged compromise today, while noting that Congress can avert the sweeping across-the-board cuts that would affect the Pentagon and other governmental agencies. If an accord can’t be struck this week, $85 billion in cuts will take place, with spending on military and education taking a hit. President Obama noted that cuts would ''slow our economy, eliminate good jobs, and leave a lot of folks who are already pretty thinly stretched scrambling to figure out what to do." The ongoing budget talks or lack thereof in Congress will probably create a headwind for stocks over the remainder of this week’s trading sessions.  - 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 higher this morning, but has since pulled back notably. The market’s strong start may well have been in response to trading overseas. On the Continent, the bourses were all moving higher, largely on the suggestion that Italy’s elections would have a favorable outcome. However, that situation has become less certain, causing some market volatility. Further East, Japan’s Nikkei also put in a strong session last night, as that country will likely be implementing further stimulus measures.

As we pass the noon hour in New York, the Dow Jones Industrial Average is off 53 points (-0.4%); the S&P 500 Index is lower by six points (-0.4%); and the tech-heavy NASDAQ is shedding four points (-0.1%). Market breadth indicates a somewhat negative bias to the session, as declining stocks are outnumbering advancers by a narrow margin on the NYSE. The market sectors are mixed, with weakness in the consumer names. There are also losses in the conglomerates and capital goods issues. In contrast, there is some relative strength in the utility stocks.

Technically, the S&P 500 Index has found support at the critical 1,500 level, after selling off earlier. The market is likely still consolidating the large gains that were logged over the past few months, as traders look for direction now that earnings season is over, and the country’s budget is back in the spotlight. The VIX is slightly higher today, at about 15.30, suggesting traders may be getting cautious. Gold, a defensive asset, is also higher.

Some stocks are making news today. Lowe’s (LOW) shares are mixed, after the home improvement retailer issued strong profits, but a sluggish top line. Donaldson (DCI) stock is off, after the industrial company posted a weak profit report. Elsewhere, Hertz Global (HTZ) stock is notably higher. The car rental company issued a better-than-expected outlook.

Meanwhile, there was no material economic news released today. However, tomorrow the housing markets will be back on center stage. Notably, we will receive updated figures for the FHFA Housing Price Index, as well as for the Case-Schiller 20-City Index. These two reports should provide some information as to the direction of real estate prices. We also will get a look at new home sales for January, as well as the consumer confidence reading from the Conference Board. So stay tuned. - 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 There were some M&A developments over the weekend. Notably, Leonard Riggio, who is the founder, Chairman, and largest stockholder of bookseller Barnes & Noble (BKS), plans to submit a proposal to purchase all the assets of the company’s retail business. Such a move would separate the profitable but declining retail business from the college bookstore chain and the Nook e-reader business, which loses money but is viewed by many to have greater growth potential. Shares of Barnes & Noble are up sharply in pre-market trading on the news.

On the earnings front, shares of Lowe’s (LOW) are trading slightly higher ahead of the bell, after the retail building supply company reported better-than-expected January-period results. The stock of rental car operator Hertz Global Holdings (HTZ) is also indicating a stronger opening on earnings news. – 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 - The bulls made their move on Friday, following back-to-back losses the two previous sessions. In fact, emboldened by some solid buying throughout the day, equities rallied even more forcibly into the close, with the Dow Jones Industrial Average managing to end the day and the week at the elusive 14,000 level.

To be sure, this was not the first close above 14,000 by the Dow in the current bull market. That index had, in fact, managed to close above that level several times over the past three weeks, only to fall back during the following trading day. This time, though, given the strong markets overseas, where Germany's DAX is up by some 2%--and is headlining a generally stronger market in Europe--and Japan's Nikkei was up by more than two percent, the path of least resistance would seem to be higher. That is especially so since our futures are also posting solid gains in the pre-market. Specifically, with less than an hour to go before the start of the new trading week, the Standard and Poor's 500 Index futures are up by more than six points and the NASDAQ futures are soaring by more than 17 points.

Meantime, in the news background, the Chairman of ailing Barnes & Noble (BKS) has notified the board of directors that he plans to propose to buy all of the assets of the book chain's retail business. The shares are up by more than 20% in the pre-market in response. Also, do-it-yourself retailer Lowe's Cos.(LOW) posted better-than-expected quarterly sales and earnings this morning, and the shares of the giant retailer are up modestly in the pre-market.

As to other news, this will be a generally quiet day on the economic front. However, the business beat picks up tomorrow, with data to be issued on home prices, where a solid gain is expected. Additionally tomorrow, the Conference Board will release its monthly survey on consumer confidence. A nice snapback from January's 58.6 reading is the forecast. Moreover, the government will also issue data on new home sales tomorrow. Here, too, a rebound is the forecast. Wednesday will then bring the monthly report on orders for durable goods. That volatile metric is seen declining after a strong gain in December.

Then, on Thursday, the Commerce Department will issue data on revised fourth-quarter GDP. Last month, that issuance showed a surprising 0.1% decline. Now, expectations are that the rate will be revised to show modest growth of 0.5%, or more. The week finally concludes on Friday with reports on personal income and spending for January and with February's look at manufacturing activity across the country. Expectations are that spending increased nominally in the first month of this year, but that incomes plunged due to the end of the payroll tax holiday. As to manufacturing, it is likely to have been fairly flat, but still show growth.

Overall, the picture seems to be brightening, which is likely why the market continues to hold in the current rarified air, and that it could well gain further in the days and weeks to come. – Harvey S. Katz

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