After The Close - The stock market put in a generally weaker showing today. At the close of the session, the Dow Jones Industrial Average, which was an outlier, was up 12 points (0.1%); the broader S&P 500 Index was off three points; and the NASDAQ, which struggled during the day and managed to pare most of its losses, still finished off 11 points (-0.3%). Market breadth was mixed, with decliners slightly ahead of advancers on the NYSE.

The market sectors were evenly divided today. There was considerable weakness in the basic materials stocks, due in part to losses in the metals area. In addition, the consumer stocks did not hold up well. However, the transportation issues and the technology stocks showed some strength today, helped by the computer hardware names. For instance Hewlett-Packard (HPQ - Free HP Stock Report) logged a decent advance, crossing the $20 – a –share mark.

Technically, the S&P 500 Index has shown some resilience over the past several sessions. However, the Index may well hit some resistance, as it attempts to break into new high ground. Still, volumes have picked up lately, suggesting some commitment to the rally. The VIX, which had been higher earlier, declined in the afternoon, ending at just about 13.62.

Traders were not all that encouraged by the economic news released this morning. Specifically, the preliminary estimate for GDP showed a gain of 2.5% in the first quarter. Analysts had been expecting a somewhat higher reading. Some of the shortfall may be due to more restrained government spending. This news may have been tempered by a decent reading on consumer sentiment. The University of Michigan’s Consumer Sentiment Index provided a final reading of 76.4 for the month of April, which was a bit better than many had anticipated. Next week brings numerous reports, including the FOMC rate decision and the Government’s employment report for April. Notably, traders are always cautious around this important release.

Meanwhile, investors got another batch of corporate earnings reports to digest. Today, we heard from a few big names. Notably, Amazon.com (AMZN) put out a mixed release, featuring decent profits but a weaker-than-expected top line. That issue traded roughly 7% lower. Elsewhere, Starbucks (SBUX) saw its stock head lower, too, after the coffee seller put out figures that disappointed investors. -Adam Rosner

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


12:15 PM EDT - The U.S. equity indexes started the final day of the trading week in somewhat mixed fashion, but have now weakened modestly as we pass the midday hour on the East Coast. Indeed, while none of the major equity indexes is straying too far from the neutral line, there definitely is a negative basis to trading, as declining issues are outnumbering advancers by a decent margin on both the Big Board and the NASDAQ. The Dow Jones Industrial Average, on the strength of a few of its components, including Chevron (CVX Free Chevron Stock Report), Boeing (BA Free Boeing Stock Report), and Hewlett-Packard (HPQ Free HP Stock Report), is just nominally lower. The tech-heavy NASDAQ and the broader S&P 500 Index, not surprisingly given the negative spread between winning and losing issues, are further in the red. It appears that the bears, who have been quiet the last few days, are emboldened by a weaker-than-expected initial reading on first quarter GDP growth and some disappointing earnings releases (more below).

As noted, some of the caution being exhibited today is probably due to a disappointing report on first-quarter GDP. Specifically, the nation’s gross domestic product rose by 2.5% in the opening quarter of 2013. While this showing was a big improvement from the nominal 0.4% gain recorded during the final quarter of 2012, it was materially below the consensus expectation of 3.2%. More significant, the report raises concerns that the economy will have a tougher time over the next few months. Other recent economic reports, including those on manufacturing, industrial production, nonmanufacturing, retail sales, and job growth, have suggested as much. The renewed economic worries here are being further compounded by difficulties in the euro zone and moderating growth in China. However, one encouraging aspect of the latest GDP reading was that consumer spending, which accounts for nearly two-thirds of the economy, climbed by the most since the fourth quarter of 2010.

Not surprisingly, those sectors closely tied to the economy are suffering the biggest losses today. The key laggards are the basic materials, consumer discretionary stocks, and energy issues. Within the basic materials sector, the aluminum and steel stocks are notably weaker. In the energy group, the coal issues are under significant pressure today, a scenario that has been the norm for much of 2013. Among the 10 major sectors, the utilities are the only group that is not bleeding red ink today.

On the earnings front, the headline reports came from Dow-30 component Chevron and retailing online giant Amazon.com (AMZN). The oil giant’s net income fell 4.5% in the first quarter, as oil prices fell and refinery output declined, while Amazon.com missed on the bottom line in the second quarter. Shares of the two companies are heading in opposite directions today. Meantime, the stocks of Starbucks Corp. (SBUX) and Expedia (EXPE) are lower after reporting underwhelming quarterly results. In nonrelated news, shares of J.C. Penney (JCP) jumped on reports that billionaire investor George Soros has disclosed a passive stake in the struggling retailer. - William G. Ferguson 

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 The drumbeat of earnings news continues, and some of the most high-profile reports appeared to leave investors wanting more. Indeed, shares of coffee shop operator Starbucks (SBUX) and online retailer Amazon.com (AMZN) are both indicating lower openings this morning. Other stocks trending lower in the premarket on earnings news include online travel services provider Expedia (EXPE), China-based Internet search company Baidu (BIDU), footwear manufacturer and retailer Deckers Outdoor (DECK), oilfield services provider National Oilwell Varco (NOV), and apparel company V.F. Corp. (VFC).

On the bright side, shares of energy giant and Dow-30 component Chevron (CVXFree Chevron Stock Report), automated retail services provider Coinstar (CSTR), homebuilder DR Horton (DRI), tire manufacturer Goodyear (GT), casino game developer and manufacturer International Game Technology (IGT), forest products company Weyerhaeuser (WY), and golf equipment manufacturer Callaway Golf (ELY) are all up ahead of the bell thanks to encouraging earnings reports. – 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 - Positive data on earnings and the employment situation were a potent one-two punch for the bulls yesterday, as the leading equity indexes added to their recent winning streak. In all, several of the leading averages moved closer to either yearly or all-time highs, during a session that saw the Dow Jones Industrial Average add 25 points and the tech-heavy NASDAQ jump by another 20 points. The Dow is now less than 200 points from its record high of 14,865.

As to earnings, recently downtrodden iron ore and coal producer Cliffs Natural Resources (CLF) posted a sharp earnings decline for the opening period of this year, but the shortfall was less than many believed would be the case. That was all this stock needed, as it rose nicely in price. In the past year, though, this issue has been one of the Big Board's worst performers. Also doing well yesterday was chemicals giant Dow Chemicals (DOW). That heretofore middling performer of late posted better results than generally forecast, and the stock rose almost 6%. The gain at Cliffs natural Resources was some 15%. On the other hand, 3M Company (MMMFree 3M Stock Report), the manufacturer of an array of industrial products and a Dow-30 component disappointed investors, and that stock fell back notably in price in the latest session.

On the economic front, traders were emboldened by data showing a sharp drop in initial jobless claims. That metric fell to 339,000 in the latest seven-day stretch. Continuing jobless claims also declined in new evidence that the labor market may be gaining more steam after languishing for the first several years of this underwhelming business expansion.

The day ahead, meanwhile, will feature a succession of additional earnings results, as Corporate America continues to report its opening-period top- and bottom-line results en masse. Of note, here, was the just-issued quarterly profit statement from energy giant Chevron (CVXFree Chevron Stock Report). Initial indications are that this Dow-30 component netted $3.18 a share, which was a dime a share better than consensus, but a bit below our view. Chevron shares are little changed in the pre-market session.

And on the economy, the government has just issued its flash, or initial estimate of first-quarter GDP. Expectations had been for growth of 3.2%; the growth rate was materially less than that at just 2.5%. However, that showing was markedly ahead of the fourth quarter of 2012, when the nation pressed forward at a dismal 0.4%. A notable slowdown in growth during March was a big factor in the less-than-overwhelming result.

Finally, after the recent bullish fireworks, the equity futures are pointing to a lower start this morning, with the Standard and Poor's 500 Index futures now off by almost five points and the NASDAQ futures down by almost nine points. So some modest profit taking would seem ahead when the bulls and bears get down to business in about a half 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.