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After The Close - The bears made a big statement today, emboldened by some weaker-than-expected U.S. economic data and some renewed concerns about Italy. The selling intensified during the afternoon, with all of the major indexes finishing well into negative territory. The Dow Jones Industrial Average shed 112 points; the NASDAQ fell 36 points; and the broader S&P 500 Index was off 17 points. It is also worth noting that the small-cap Russell 2000 and the S&P Mid-Cap 400 Indexes, which were lower yesterday, extended their losses today. The selloff in the mid- and small-cap spaces, where equities tend to be more risky, may also be a sign that investor sentiment is turning more bearish. Overall, declining issues far outnumbered advancers on both the Big Board and the NASDAQ.

From a sector perspective, it was a sea of red ink among the 10 major groups. Renewed concerns about the economy, both here and abroad, weighed heavily on the basic materials, financial, energy, and industrial sectors. Within the basic materials space, the metals and mining stocks were pummeled once again. Even the more defensive-oriented groups, including healthcare, telecoms, and the utilities, succumbed to a decent amount of selling today. There were few places for investors to hide.

Meanwhile, the increased skittishness on Wall Street pushed investors toward fixed-income securities, with bonds the beneficiaries of this “flight-to-safety” strategy. In fact, the yield on the benchmark 10-year Treasury note, which moves in the opposite direction to the price, fell five basis points to 1.81%. It was the lowest level since the final day of 2012, when concern about the “fiscal cliff” was at the forefront of the investment community’s focus.  

As noted, the U.S. economic data were a bit disquieting today—and were a big reason behind the market’s selloff. Before the U.S. market opened, investors were spooked by data from payroll processing giant Automatic Data Processing (ADP) that showed hiring in the private sector slowed in March, with that metric showing a gain of 158,000 jobs. That was well off of the forecast total of 197,000 and was even further below February's upwardly revised figure of 237,000 new positions. Then a half hour into the trading day, we learned that the Institute for Supply Management’s survey on U.S. nonmanufacturing activity had eased from 56.0 in February to 54.4 in March; it was also below the consensus expectation of 55.8. The latest reading was disappointing, as the consumer accounts for roughly two-thirds of the nation’s economic output. It also comes on the heels of last week’s very disconcerting report on consumer confidence.

Meantime, the news from the other side of the Atlantic was not very uplifting either. Of note, Italy’s Treasury said it expects the country's 2013 GDP contraction to be worse than last month's government forecast by about 1.5%. This news, along with renewed concerns in recent weeks about the euro zone’s sovereign-debt problems and the aforementioned discouraging U.S. economic data, pushed the major bourses markedly lower. Germany’s DAX, France’s CAC-40, and Britain’s FTSE-100 were down 0.9%, 1.3%, and 1.1%, respectively.  

Turning back to the U.S., it was also a very difficult day for those long commodities. Most notably, oil futures fell sharply after data showed that U.S. oil stockpiles climbed to a 22-year high last week. There is also concern that some of the global economic weakness, particularly in the euro zone, will weigh on demand for oil. Crude oil, though, was not the only commodity to fall in the latest session. Most of the metals, agricultural, and soft commodities were weaker on the global economic worries. -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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12:15 PM EDT - The stock market is retreating today after yesterday’s generally strong performance. As we pass the noon hour in New York, the Dow Jones Industrial Average is off 59 points (-0.4%); the S&P 500 Index is lower by 10 points (-0.6%); and the tech-heavy NASDAQ and is shedding 16 points (-0.5%). Market breadth is unfavorable, as declining stocks are outnumbering decliners by more than 2 to 1 on the NYSE.
Importantly, all of the market sectors are in negative territory. There are steep losses again in the basic materials group, with the steel and iron stocks leading the way lower. Precious metal shares are also off sharply, as gold and silver are declining in price today. The financial issues are trading lower, as well, with weakness in the banks and the real-estate related issues. In contrast, the losses are more contained in the technology sector, thanks to strength in the hardware stocks. The high-yielding utility names are also holding up better than many others.

Technically, the S&P 500 Index has been somewhat range bound, advancing one day, and then declining the next, for about 10 days now. This pattern likely suggests that traders are looking for direction. Given the performance of the major averages in the first quarter, it is not surprising that we are taking a pause. The first-quarter earnings announcements, due out over the next several weeks, may provide traders with the needed catalyst. For, now it seems that investors are looking at the domestic economic reports and the developments overseas.

In the East, Japan’s Nikkei rose almost 3% over night, as traders are hopeful that the Bank of Japan will implement further stimulus measures.  In Europe, the bourses are closing sharply lower on weak economic data out of Italy.

Back on our shores, the economic reports released this morning were a bit disappointing. Specifically, the ADP Employment Change report for March showed 158,000 private sector jobs added to the economy.  This was less than the upwardly revised 237,000 figure logged in February, and also short of the consensus forecast. Making matters worse, the ISM non-manufacturing figures for March came in at 54.4, which was modestly under analyst expectations. Tomorrow, we get a look at the weekly initial and continuing jobless claims. Notably, all this is leading up to the March employment report due out on Friday. Given today’s ADP numbers, traders may not be too anxious to step into the market in front of that release.

In corporate news, Monsanto (MON) stock is trading higher on a better-than-expected earnings release. However, Atmel (ATML) stock is lower. The semiconductor company issued higher top-line guidance, but a senior management change may have investors concerned.

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 – There are a few earnings reports out today that investors will want to be aware of. Monsanto (MON) stock is up slightly in the premarket, after the agricultural products and genomics company reported better-than-expected February-period results. On the other hand, Wall Street was not impressed with quarterly financials from leading packaged foods company ConAgra (CAG) or credit card transaction processor Global Payments (GPN), and those stocks are indicating lower openings this morning.

Elsewhere, shares of Zynga (ZNGA) are up sharply ahead of the bell, after the online game developer launched its first real-money gambling websites in the United Kingdom. Likewise, Newfield Exploration (NFX) stock is indicating a nicely higher opening this morning, on news that the energy company is exploring the sale of its international business. It also announced a new natural gas discovery near Malaysia. – 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 - Following up on a modestly bearish Monday, Wall Street's bulls looked to wrest the reins back yesterday. And for a time, it looked as though they would succeed in that quest, as the leading equity averages and most individual groups joined the early party. In fact, by mid-session, the Dow Jones Industrial Average had climbed to yet another all-time record high. The Standard and Poor's 500 Index also rose to a new peak. And those indexes largely held their early gains into the close.

However, save for the Dow, which added 89 points, to close at 14,662, after having been up by more than 110 points, the S&P 500 Index, which jumped by eight points, and the NASDAQ, which gained 16 points, much of the rest of the market just marked time, or worse.

Indeed, by the close, there were more losers than winners on both the Big Board and the tech-heavy NASDAQ. The weakness in the overall market was occasioned by some concerns about the industrial sector in this country, after a dour report on manufacturing had been issued on Monday morning. To wit, the basic materials stocks, most notably the steels, and in particular the shares of U.S. Steel (X), Cliffs Natural Resources (CLF), and Nucor (NUE) all hit the skids, as did the stock of aluminum maker Alcoa (AA - Free Alcoa Stock Report), and the shares of several coal companies. Also fading during the session were the shares of first-quarter winner Hewlett-Packard (HPQ - Free HP Stock Report), which tumbled more than 5% following a brokerage house downgrade.

On the other hand, the healthcare stocks rallied yesterday, as the insurers benefited from increased government reimbursement rates on Medicare and Medicaid. Not only did the health insurers gain, but the big drug makers saw their shares rise as well.

As to economic news, there was a favorable report on factory orders issued during the morning, but unlike the manufacturing data released on Monday, which covered the month of March, this report chronicled February, so it had a lesser impact due to its older nature. More important, sales by the leading car makers were the best in any March in five years, causing some pundits to raise their vehicle sights for the full year.

Meanwhile, the business beat heats up more definitively this morning, with the report, due out at 10:00 (EDT), on nonmanufacturing activity. That survey, the companion to the report on manufacturing noted above, is expected to show a somewhat better rate of growth than the manufacturing survey. Also, just moments ago, Automatic Data Processing (ADP) noted that the pace of hiring by the private sector had slowed in March, with that metric showing a gain of 158,000 jobs. That was well off of the forecast total of 197,000 and was even further below February's upwardly revised figure of 237,000 new jobs. This report is the forerunner, of course, of the key government release set for Friday morning on non-farm payrolls and the unemployment rate. Current estimates call for the creation of some 200,000 jobs in March and a stable jobless rate of 7.7%.

As to the market, the equity futures eased a bit following the ADP issuance and now suggest just a slightly higher opening when the bulls and the bears get down to business in less than an hour from now. -Harvey S. Katz

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