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After the Close - It was a record-setting day on Wall Street, especially for the Dow Jones Industrial Average, which surged to an all-time high. However, while the index of 30 bellwether companies was the headline story, it was also a very productive day for the NASDAQ, the broader S&P 500 Index, and the small-cap Russell 2000, with each recording similar percentage gains, or even better in some cases, as the Dow 30. Pushing equities sharply higher these days is growing optimism about the U.S. economy. Too, with interest rates still historically low, investors continue to view equities as an attractive option for funds even with the market overbought at the moment. The S&P 500 Volatility Index (VIX) finished at just over 13, a level that would suggest such. Overall, advancing issues far outpaced decliners on both the Big Board and the NASDAQ.

The buying was all encompassing, with each of the 10 major sectors finishing in positive territory. Even those groups that struggled yesterday (i.e., energy, industrials, and basic materials) rebounded nicely in the latest session. The consumer cyclical issues also performed well, perhaps helped by a good report on nonmanufacturing activity. Earlier today, the Institute for Supply Management, a Tempe, Arizona-based trade group, reported that nonmanufacturing activity had come in with a reading of 56.0 for February. That comfortably exceeded the 50.0 dividing line between an expanding services sector and one that is contracting. It also topped January's reading of 55.2 and the consensus expectation of 55.0. This was a notable report, as the services sector accounts for roughly two-thirds of the nation’s economic output. It also comes just days after the ISM reported positive data on manufacturing activity. We will receive the most telling report on the economy for the month on Friday, when the Labor Department reports data on non-farm payrolls and unemployment.

The good times were not confined to these shores. In fact, the major European bourses booked bigger percentage gains than our own indexes, with advances of more than 2% for Germany’s DAX and France’s CAC-40. Stocks on the Continent were propelled by renewed hopes that the global central banks will continue their aggressive monetary policies. Such maneuvers are often viewed positively by market participants, and that seemed to be the case once again today. The aforementioned rally by the Dow Jones Industrial Average also helped the European bourses accelerate gains in late afternoon trading. The European Central Bank, the Bank of England and the Bank of Japan—which are holding their latest monetary policy meetings this week—are expected to keep their accommodative monetary policies in place. This comes a week after Federal Reserve Chairman Ben Bernanke assured investors that the U.S. Central Bank would continue its aggressive bond-buying program in an effort to stimulate the economy and make a sizable dent in the nation’s stubbornly high unemployment rate.

All in all, it was another terrific day for those who were long equities. However, we do caution that the recent equity market surge, which has included a year-to-date advance of more-than-9% for the Dow 30, has left the market valuations extended. Thus, it will be essential for the decent economic news of late to continue. Any setback on that front could trigger, at the very least, a mild selloff in equities. Such sentiment is expected to have investors closely monitoring Friday’s report on job creation.  - William G. Ferguson 

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

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12:30 PM EST - The U.S. stock market got off to a strong start today. Moreover, so far, the major averages have been able to hold their gains, which is a good indicator. At just past noon in New York, the Dow Jones Industrial Average is up 146 points (1.0%); the S&P 500 Index is ahead 16 points (1.1%); and the tech-heavy NASDAQ is up 39 points (1.2%). Market breadth confirms the widespread accumulation of equities today, as advancing issues are ahead of decliners by well over 3 to 1 on the NYSE. There is notable leadership in the basic materials and technology names.  While there are no weak sectors, the defensive utilities are lagging the broader market, as traders look for more exciting issues.

Technically, the averages are all showing considerable strength. The S&P 500 Index, now up to 1,540, is making a multi-year high, and the Dow has managed to enter all-time high ground. Further, the NASDAQ is also making strides. Although it may take some time for this technology index to break through the 5,000 area, as that level was hit several years ago in a massive technology boom, its showing is still impressive. The VIX is down over 5% to 13 today, suggesting bullishness on the part of investors.

Stocks here in the United States may be getting some help from the financial markets overseas, as a series of positive economic reports in Europe helped lift the bourses earlier today.

Today’s economic news was also constructive. The Institute for Supply Management’s Non-Manufacturing Index came in at 56.0 for the month of February, which was better than many expected. Tomorrow, we get a look at the ADP Employment report for February, which will provide some insight into the job situation in the private sector. We also get a look at factory orders for January.

There is some corporate news of note today. Technology giant Qualcomm (QCOM) shares are getting a lift, as that company is increasing its dividend and embarking on a large buyback program. Notably, many companies have been raising dividends lately, and that too is a good indication that the business environment is stable.   - 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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11:00 AM EST - The Dow Jones Industrial Average, the most storied of the major equity averages, with a history of more than 115 years, has finally hit a record high this morning, surpassing the prior all-time peak set back in October of 2007. In doing so, the 30-stock composite has overcome the long and severe recession that struck this nation in late 2007, a major and unprecedented depression in the U.S. housing market, and the near collapse of the automobile industry.

And the Dow has not merely tiptoed through the previous peak of 14,164, but it has shattered the record, rising by some 155 points in mid-morning, to above 14,280. Indeed, that index is still climbing as we put this report out. And it isn't just about the Dow, as the Standard and Poor's 500 Index, which is getting closer to record territory, is up 16 points; the NASDAQ is better by 40 points; and the small-cap Russell 2000 Index is higher by 11 points.

According to one pundit, “this is the classic bull market, climbing the wall of worry”. Meanwhile, as stocks have climbed higher still more and more cash is being put to work, coming both out of bonds and in from the sidelines.

Behind this migration to stocks is a sense that the U.S. economy is seriously on the mend, with data issued in recent days showing that both the manufacturing and non-manufacturing, or services, sector are on the mend and rising strongly. Further, even with gridlock in Washington and a dour employment situation, consumer confidence is on the rise, which portends well for spending by Americans in the months to come. It is thus all coming together.

How long will the good times last? That is anybody's guess, and at some point the good feelings will subside and profit taking, or worse, will ensue. But for now, it is all in the court of the bulls and for those who are long equities.  - Harvey S. Katz

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 Corporate news is somewhat light today, though shares of Qualcomm (QCOM) are trading moderately higher in the premarket, after the telecommunications equipment company raised its quarterly cash dividend 40%, to $0.35 a share. It also announced a new $5 billion stock-repurchase program. Elsewhere, shares of Gardner Denver (GDI) are indicating a slightly higher opening this morning, on reports that private-equity firm KKR may be close to acquiring the maker of industrial pumps, compressors, blowers, etc. Finally, things seem to keep getting worse for department store operator J.C. Penney (JCP). After reporting dismal January-period results last week, the stock is under pressure again, as one of the retailer’s largest shareholders, real estate company Vornado Realty Trust (VNO), is reportedly looking to sell roughly 10 million shares of JCP stock. – 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 - After closing with a late rush yesterday, the 30-stock Dow Jones Industrial Average is just 37 points off of its all-time high of 14,164. That journey back has taken some five-and-a-half years since the October, 2007 peak was reached. And a lot has happened in between.

For example, the Dow, which gained 38 points yesterday, fell almost 8,000 points in the interim, plunging to just under 6,500 in a frenzied selling panic in 2008 and early 2009. That period also saw the worst recession since the 1930s; an unprecedented debacle in the domestic housing market; the near-collapse of the auto industry; and the implementation of historic fiscal and monetary programs to stave off an all-out depression.

Now, following some four years of a spotty and rather unprepossessing business recovery and a major stock market boom, this blue chip index is on the cusp of a complete comeback. At the same time, the Standard and Poor's 500 Index, which sits at 1,525 after yesterday's modest runup, is also nearing a record high. On the other hand, the NASDAQ, which likewise gained ground yesterday, rising 12 points, to 3,182, is still some two thousand points away from its record high. That peak was set before the tech bubble burst, with many once-proud names still gasping for air after all this time, having suffered losses, which in some cases exceed 90%.

Meanwhile, yesterday's gains were not achieved easily, as Wall Street had to overcome some fairly sizable selling early in the day, as further evidence was provided that the rest of the world, especially the euro zone and China are still hurting to various degrees. The big current hurdle, though, seems to be Europe, where one metric after another is issued showing that the euro zone is still mired in recession, with neither quick nor an easy exit seemingly on the horizon. In fact, the latest data show that France, Spain, and Italy, the second, third, and fourth largest economy's in that encumbered region, dragged the Continent more deeply into a downturn in February. In fact, a number of business surveys now affirm that there is a marked line between these ailing countries and Germany, the largest and strongest nation in the euro zone.

As to our situation, no economic numbers of note were issued yesterday. However, that will change this morning, when the Institute for Supply Management, the Arizona-based trade group, will release its survey on non-manufacturing activity across the country for February. A moderate rate of expansion is the likely outcome here, following data issued late last week detailing somewhat stronger-than-expected results in the companion release on manufacturing activity. All of this, though, is just a prelude to the week's most important issuance, which comes out on Friday morning, when the U.S. Labor Department releases its monthly metrics on non-farm payrolls and the unemployment rate. Decent, but not exceptional, numbers are the likely outcome in that report.

As to our markets, they continue to press higher, in spite of the unsettled situation in Washington, where the much-talked about sequestrations, or mandatory federal government spending reductions, are now in effect, after the two political parties failed to reach a budget accord before the March 1st deadline. There seems to be a relative calm about the situation, which most pundits believe will prove less fearsome that the fiscal cliff, which the nation threatened to go over late last year before a last-minute deal was reached.

So, with the sequestrations apparently not frightening investors, and with the lure of a record Dow reading perhaps too much to resist, the equity futures are posting healthy gains with less than an hour to go before the start of the new trading day, suggesting that we could go over the top on the Dow in the day ahead. Stay tuned. – Harvey S. Katz

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