After the Close - The stock market got off to a weak start this morning, with losses intensifying for much of the afternoon. However, by the close of the day, the market had finished off its lows, showing some minimal support for equities. The Dow Jones Industrial Average was off 82 points (-0.6%); the S&P 500 Index was lower by 10 points (-0.7%); and the NASDAQ, which was easily the weakest of the major averages, had given up 38 points (-1.2%). Market breadth was negative, but not overly so, with declining stocks outnumbering advancers by less than 2 to 1 on the NYSE. Notably, these figures can be much more negative in full-scale selloffs, and suggest that there was little in the way of panic selling.
The major market sectors also showed a mixed market. There were gains in the energy issues, which may coincide with higher oil prices today. The utilities, which tend to be defensive, were also moving higher. Further the consumer non-cyclical sector showed some strength. In contrast, weakness was apparent in the technology shares, as computer hardware issues were sharply lower. Apple (AAPL), too, fell once more, closing well below $400 a share. The financials also performed poorly.
Technically, the S&P 500 broke through its 50-day moving average during the day, but in the end, found some support at this level. Today’s move lower puts the index about 3.5% off its recent high. If we move lower, the 200-day moving average, located at about 1,450 on the S&P, may be the next area of support, suggesting a possible deeper correction. The VIX was up about 6%, to over 17, indicating that traders, once decidedly bullish, are now becoming a bit more concerned.
Meanwhile, the economic news released this morning did little to advance the bullish cause. Initial jobless claims for the week ended April 3rd came in at 352,000, up from the prior week’s level of 348,000. Weekly continuing jobless claims looked a bit more encouraging. Recently, the employment figures, such as last month’s non-farm payroll release, have indicated that the recovery may still be progressing slowly. Further, the Philadelphia Fed’s report on that region’s economy showed some difficulty in the month of April. Elsewhere, the Conference Board’s leading indicators report for March showed some weakness, too.
In corporate news, shares of Freeport-McMoran (FCX) fell, but then recovered, after the metals giant put out weak results. Also, Nokia (NOK) stock was sharply lower on top-line weakness. - Adam Rosner
At the time of this article’s writing the author did not have positions in any of the companies mentioned.
12:40 PM EDT- Stocks are lower once again today following some disappointing economic reports and the release of a mixed batch of corporate earnings. Wall Street came to work today looking for a rebound from yesterday’s heavy selling pressure, and at first it appeared as though that would be the case. But after a positive opening, stocks began to back off on inspiring news. Just after noontime on the East Coast, the Dow Jones Industrial Average is in the red by 64 points and the NASDAQ is down 28 points.
Unfortunately, the day’s economic data weren’t all that supportive. Weekly initial unemployment claims were about as expected, and suggestive of moderate job growth, but a survey from the Philadelphia Federal Reserve regarding the surrounding region’s business conditions pointed to slowing growth.
Then, too, the release of the Conference Board’s Index of Leading Indicators for March showed the first decline in four months, albeit a modest one. While the longer-term trend in the leading indicators index is more bullish, the near term easing isn’t the stuff that stock rallies are built on.
However, the tone of the broader market isn’t nearly as bearish as was the case in Wednesday’s session. The number of stocks declining is currently outpacing those advancing by about a 17-13 margin on the New York Stock Exchange. But investors are clearly on the defensive, with utilities one of the few groups doing well.
Areas of particular weakness include the financial sector and some notable tech names. Shares of Bank of America (BAC - Free Bank of America Stock Report) and Morgan Stanley (MS) are lower in what is seen as a weak revenue environment for financial companies. Among tech stocks, eBay (EBAY) is down on heavy volume after its results suggested slower growth ahead and the company offered up a weaker-than-expected outlook. Sentiment toward Apple (AAPL) continues to erode, as well, with the stock falling under $400 a share for the second day in a row.
The day’s winners include Verizon (VZ - Free Verizon Stock Report), PepsiCo (PEP), and Core Laboratories (CLB), which are stocks of companies reporting earnings that topped analyst’s expectations. Shares of railroader CSX (CSX) are higher for the same reason, plus help from a dividend hike and possibly the view that lower fuel prices may boost results.
Heading into afternoon trading, losses may be contained by optimism that bellwether companies reporting earnings after the close, such as Google (GOOG) and IBM (IBM - Free IBM Stock Report), will surprise on the upside. -Robert Mitkowski
At the time this article was written, the author did not have positions in any of the companies mentioned.
Stocks to Watch from The Survey – The earnings parade continues, and investors are digesting several reports from Dow-30 components. Financial services company American Express (AXP – Free American Express Stock Report) delivered mediocre first-quarter results that fell short of our estimates, as revenues missed the mark and the tax rate was higher than anticipated. However, investors found enough positive news in the report to bid the stock up just slightly in the premarket. Wall Street also had a positive reaction to March-term results from telecommunications heavyweight Verizon (VZ – Free Verizon Stock Report), and that stock is indicating a modestly higher opening this morning. Health insurer UnitedHealth Group (UNH – Free UnitedHealth Stock Report) did not garner such a warm reception, however, and its shares are down ahead of the bell.
Other notable stocks making downward moves in the premarket on earnings news include online auctioneer eBay (EBAY), investment bank Morgan Stanley (MS), tobacco company Philip Morris International (PM), metals and mining concern Freeport-McMoRan (FCX), and mobile phone manufacturer Nokia (NOK). On the other hand, shares of semiconductor companies Cypress (CY) and Fairchild (FCS), beverage and snack giant PepsiCo (PEP), financial services companies The Blackstone Group (BX) and Fifth Third Bancorp (FITB), and flash memory and data storage manufacturer SanDisk (SNDK) are up in pre-market trading due to earnings-related 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 - Stocks fell broadly and sharply yesterday for the second time in the past three sessions, with the bears suddenly emboldened by weak economic data in Europe, falling prices for precious metals and a range of commodities globally, and some disappointing quarterly earnings statements at home.
All told, after the Dow Jones Industrial Average had fallen by 266 points on Monday, for the biggest one-day decline in some five months, and gained back 158 points on Tuesday, that 30-stock composite returned to its losing ways in the latest session falling by another 138 points. And the Dow was certainly not alone, as the NASDAQ plunged by 60 points, or a notable 1.84%, while the broadly configured Standard and Poor's 500 index dropped 23 points. Losing stocks led winners, moreover, by ratios of four-to-one on the Big Board and by an even less-welcoming five-to-one on the NASDAQ. Once again, there was no place for the suddenly encumbered bulls to hide.
As to earnings, they are generally beating lowered consensus, but the attention grabbers are seemingly not on the good profit news, but rather on the few outliers that are reporting disappointing metrics and issuing rather pedestrian guidance. In this camp is Bank of America (BAC – Free BofA Stock Report), which did not overwhelm investors with its quarterly figures, especially on the revenue line. That stock fell nearly 5% in trading yesterday, in apparent response. Also pressing lower on a disappointing profit showing was Textron (TXT), with that maker of aircraft and defense products missing consensus expectations and falling by better than 13% on the day. But the headline grabber was the iconic tech giant and erstwhile Wall Street darling, Apple Inc. (AAPL), which tumbled below $400 a share, before a late move off of the day's low, allowed a close at $402.80. But the issue was still off more than $23 a share on the day. Just months ago, Apple had topped $700 a share.
Now a new day dawns, and we will be getting additional economic metrics and a whole host of earnings reports. To wit, we have just seen data showing a small uptick in weekly unemployment claims, which was expected, and does not now shape up as much of a market moving event. Then, later this morning, we are due to get data on the leading indicators for March. An increase of 0.2% is the general expectation. Thereafter, it will be quiet on that front for the balance of this week, before we get a number of releases next week, including data on first-quarter GDP.
As to the markets this morning, we are seeing a bounce of some note in Europe, and corresponding gains in the price of gold, a major casualty in recent days, and in oil, which has pushed back up to $88 a barrel in New York. As to our futures, they, too, are suggesting an early move higher following the recent bearish fireworks. We shall see if that presumptive move upward can be sustained when the market opens for trading in less than an hour from now. 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.