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After The Close - Stocks fought the good fight today, overcoming weak sentiment in Asia and some renewed concerns about Europe this morning to put up modest gains by the afternoon. It was touch and go for much of the session, with the bulls drawing support from today’s strong report on retail sales from the Census Bureau. The bears, on the other hand, took rising bond yields in Italy as a potentially bad sign. There was a feeling that some fatigue may have set in on the bullish side, too, with stocks rising unabated of late.

At the close, the Dow Jones Industrial Average was up five points and the NASDAQ was three points to the good. Market breadth was slightly positive, as well. Also of note, though, was a low reading on the volatility index, which contrarian investors sometimes view as a sign of complacency.

At the sector level, transports were the star of the day, with stocks, such as those of trucker JB Hunt (JBHT) and Delta Air Lines (DAL) enjoying good relative strength.

On the down side, shares of basic materials companies were hurt as prices for copper, oil, and gold edged lower, partly as a result of a stronger dollar. Shares of Freeport McMoRan (FCX), Newmont Mining (NEM) fell notably on a percentage basis as a result. Energy stocks were also held back by an analyst downgrade of shares of certain refiners, including Valero Energy (VLO) and Tesoro (TSO) on the thinking they may have trouble complying with tighter federal regulations on renewable fuels.

Among individual stocks, National Financial Partners (NFP) jumped when the company indicated it could be sold. Shares of drugstore operator Walgreen (WAG) also hit a 52-week high on an analyst upgrade.

Tomorrow brings fresh economic data in the form of the Labor Department’s weekly initial jobless claims report, where a generally favorable outcome is expected. One reason stocks have continued to rally the past few days was last Friday’s uplifting monthly employment report. Further indications that the jobs picture is steadily improving would, of course, be welcome.

Also on tap for Thursday is February’s Producer Price index, which is expected to show rising inflation in the headline number, but a tame reading at the "core" level, which excludes highly volatile items, such as energy prices.

Subdued inflation has allowed the Federal Reserve to maintain its aggressive monetary policy to stimulate the economy. Market watchers will be checking to see if that remains the case.   - Robert Mitkowski

        
At the time of this article's writing, the author had positions in WAG.   

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12:25 PM EDT - The stock market opened lower today, but has since made an attempt to push into positive territory. At just past noon in New York, the Dow Jones Industrial Average is down one point; the S&P 500 Index is up just slightly; and the tech-heavy NASDAQ is also off nominally. Market breadth indicates a mixed tone to today’s session, as advancing stocks are just about even with decliners on the NYSE. The various market sectors are also uneven. There are losses in the basic materials, healthcare, and energy names. However, the technology and capital goods issues are making positive strides.

Technically, the market has staged quite a run lately, and may well be in need of some consolidation. Small pullbacks and sideways moves allow traders to get comfortable with the market at its current level.  Traders may also be looking to rotate into different areas of the market, possible taking profits in overvalued names, while redeploying capital into some of the stocks that have not participated in the broader market move. 

There was some constructive economic news released today. Specifically, retail sales climbed 1.1% in the month of February. Also, import and export prices held relatively steady, suggesting little in the way of inflationary problems. Watching for signs of inflation is important for traders, since a low-interest rate policy has been helping lift the equity markets. Tomorrow, the employment situation is back in the spotlight, as we get the weekly initial and continuing jobless claims figures. We will also get a better look at inflation, as the Producer Price Index is set to be released, as well.

It is important to note that strong economic data has supported the equity market, and that the current stock rally does, in part, reflect an improving economic and corporate environment. However, the still weak situation in Europe is of concern, as worries about debt levels and the euro, have played a role in recent stock market corrections both abroad and at home.

There were a few notable corporate reports released today. Specifically, Express (EXPR) stock is lower, after the retail apparel company issued a weak outlook. In the healthcare area, Spectrum Pharmaceuticals (SPPI) stock is falling on weaker-than-expected sales guidance for one of its drugs. Also, Dole Food Company (DOLE) shares are lower, after the company issued weak quarterly results.   - 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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Stocks to Watch from The Survey Earnings reports, especially from retailers, which often have fiscal years that end in January, continue to trickle in. Apparel and accessories retailer Express (EXPR) delivered solid January-quarter results, but its outlook for the current fiscal year fell short of investors’ expectations, and the stock is down sharply in the premarket as a result. (After the market closes today, Hot Topic (HOTT), Coldwater Creek (CWTR), and Men’s Wearhouse (MW) are all scheduled to release quarterly financial data.) Likewise, shares of Dole Food Company (DOLE) are trading notably lower ahead of the bell, after the world’s largest producer and distributor of fresh fruit and vegetables disappointed investors with its fourth-quarter results. – 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 - The new trading day begins with traders in an unfamiliar position; that is staring at a sea of red ink, as most of the major U.S. equity indexes finished lower yesterday for the first time in several trading session. The white-hot Dow Jones Industrial Average, which is setting record highs on a daily basis, though, was able to eke another nominal gain. However, yesterday’s overall setback for stocks was rather minor, with the S&P 500 Index, the NASDAQ, and the small-cap Russell 2000 all down 0.3% or less. Declining issues led advancers on both the New York Stock Exchange and the NASDAQ.

In our opinion, Tuesday’s mild selloff was strictly a case of some profit taking in an equity market that is clearly overbought right now. The S&P 500 Volatility Index (or VIX) begins the day at 12.27, a level that would clearly suggest that stocks are overheated.  There was little economic or earnings news of note to push equities in either direction yesterday. However, that will change today, as we have already received one very important report on the U.S. economy this morning (more below).

Meantime, the news from overseas has not been good thus far. Overnight, Asia’s major indexes finished in the red, with a notable 1.5% setback for China’s Hang Seng index. While the economic reports from Asia were rather light, we did get some news about Japan. Reports surfaced that two Japanese opposition parties have voiced their support for Kikuo Iwata as the deputy governor of the Bank of Japan. This comes after the main opposition party said it plans to vote against Mr. Iwata's appointment. This pending selection is important, as the Asian nation is in the midst of a mild recession and deflationary pressures continue to loom. On the Continent, the major European bourses are also notably weaker as trading enters the second half. Yesterday’s weakness here and some disappointing economic news from the euro zone are weighing on European equities. Of note, the euro zone’s  industrial production declined 0.4% month-over-month, worse than the expected decline of 0.1%; France’s nonfarm payrolls declined 0.3% quarter-over-quarter, slightly worse than the consensus expectation; and consumer prices were up 0.2% month-over-month, in February, which was slightly above what economists were expecting.

As noted, at 8:30 A.M. (EDT), the Department of Commerce reported that U.S. retail and food services sales for February, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $421.4 billion, an increase of 1.1% from the previous month and 4.6% above the February 2012 tally. The retail sales data were yet another positive snapshot of a strengthening U.S. economy. It comes on the heels of this month’s positive reports on employment and manufacturing and nonmanufacturing activity. Given today’s good report on the retailing sector, we would keep an eye on the consumer discretionary companies, whose stocks may get a nice boost from the aforementioned data.

With less than a half-hour to go before trading commences on these shores, the equity futures, which started out initially lower, have reversed course and are indicating a higher opening for the U.S. market. The better-than-expected report on retail sales was well received by investors and should serve as a nice catalyst for bulls to take a grip of trading once again, at least at the start of the new session. – Harvey S. Katz 

At the time of this article’s writing, the author did have positions in any of the companies mentioned.