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After The Close - The stock market put in a mixed showing today. Even though a mid-day rebound attempt failed to gain much momentum, some late day buying managed to produce selective gains. At the end of the session, the Dow Jones Industrial Average, which was quite weak for much of the day, lost 26 points; the broader S&P 500 Index was largely unchanged; and the tech-heavy NASDAQ, which bucked the downtrend, added on two points. Nonetheless, market breadth was largely negative, as declining stocks outnumbered advancers by about 2 to 1 on the NYSE. Most of the market sectors lost some ground, with steep declines in the basic materials names. Further, the energy issues put in a weak session, getting little help from lower crude oil prices. In contrast, the healthcare issues managed to put together a small advance, along with a decent showing by the consumer names.

Technically, the S&P 500 Index has spent the past several sessions in a narrow sideways range, which suggest that traders may be taking a breather at this point. It should be noted that the index has managed to hold above the 1,600 level that was surpassed in early May, and this is likely a good indication. The VIX was slightly lower today at 12.50, but still indicates a largely bullish sentiment. Further, there were about 450 stocks at new highs versus only 45 at new lows on the NYSE, also indicating a decidedly bullish attitude on the part of traders.

Traders received a few economic reports today. The news was mixed and probably did little to move the market too much. Before the market opened, the Department of Commerce reported that retail sales increased 0.1% in April. This was far better than the decline that analysts had been expecting, and stands in contrast to the 0.5% dip in sales logged in the month of March. Retail sales, excluding the automotive component, did dip slightly, but were still a bit ahead of the consensus view. Later in the morning, business inventories were largely unchanged for the month of March, where some increase had been anticipated. Tomorrow, we get a look at export and import prices for April.

There was some earnings related news of importance released today. In retail apparel, Jos. A. Bank (JOS) stock headed sharply lower after that company warned that its quarterly earnings would come in below the widely expected range. The shortfall was blamed on competitive pricing and higher inventory costs. In technology, Stratasys (SSYS) reported stronger-than-expected quarterly results and affirmed its outlook, sending that issue higher. -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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12:15 PM EDT - Stocks are trading slightly lower on this first day of the work week on concerns that the Federal Reserve may be charting a course to back off of its extraordinarily aggressive monetary policy. The stock market’s rally since November has largely taken place against the backdrop of the Fed’s expanded bond-purchase program, in which the central bank has been buying a combination of $85 billion a month in Treasury securities and mortgage obligations. Some money managers fear that a widespread belief the Fed will pull back on its stimulus will provide the catalyst for what is seen as an overdue market correction.

The absence of any significant earnings or merger news is also making it hard for stocks to gain traction. However, this morning’s surprisingly upbeat report on April’s retail sales is providing support for the market. Retail sales were expected to ease a bit, as they did in March, but instead rose marginally, catching economists flat-footed. That good news on the economy is providing an offset to the otherwise somewhat bearish tone to trading.
At the noon hour on the East Coast, the Dow Jones Industrial Average is off by 25 points, but the NASDAQ is up a handful of points. Market breadth, usually a truer indicator of sentiment, is negative, though, with about three stocks lower for every two higher on the New York Stock Exchange.

With the exception of Japan’s Nikkei 225 index, stocks aren’t getting any help from abroad, either. The bullishness in Japan arises from the beginning of a more determined monetary policy aimed at lifting the nation out of deflation and its long economic slumber. A lower yen that is supporting an increase in exports is thus far validating that strategy.

In corporate news, Yum! Brands (YUM) reported that sales in China fell significantly following a bird-flu scare that hurt its KFC unit. Its shares are lower as a result.

Winners include shares of Tesla Motors (TSLA) and First Solar (FSLR). Both companies reported results last week that turned heads on Wall Street.

The stock of J.C. Penney (JCP) is also higher on heavy volume on indications the beleaguered retailer’s finances are in better shape than thought.
Heading into this afternoon’s session, there is a muted tone to trading with the concern about the Fed pulling back support. But the positive report on retail sales should provide an underpinning.  - Robert Mitkowski

At the time this article was written, 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 rather light this morning, and investors’ attention is largely focused on the better-than-expected April retail sales report. Still, there are a few company-specific events to be aware of. To wit, cereal and packaged foods manufacturer and distributor Post Holdings (POST) has reported March-period results that were a bit weaker than anticipated due, in part, to a decrease in average selling prices and lower gross margins. Elsewhere, the euphoria regarding Tesla Motor’s (TSLA) March-quarter financials and other good press has not yet worn off, and the stock is indicating a nicely higher opening this morning, even after gaining more than 40% in value last week. – 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 U.S. equity market starts the new trading week in familiar fashion. That is coming off another strong showing in the prior five-day stretch. Although there was not much in the way of major earnings news or economic data last week for market participants to base their investment decisions off of, the bulls still pushed forward, emboldened by the better-than-expected data on job creation at the beginning of the month. However, that will change this week, as the economic data begin to pour in, starting with this morning’s report on retail sales for the month of April (see below).

Those investors long equities in 2013 have been handsomely rewarded thus far in 2013, helped, in part, by mostly encouraging earnings news from Corporate America during the first-quarter reporting season. Thus far, approximately two-thirds of the S&P 500 companies that have reported results have surpassed expectations at the bottom line. This week, we will get quarterly reports from Dow-30 components Cisco Systems (CSCOFree Cisco Stock Report) and Wal-Mart (WMTFree Wal-Mart Stock Report), along with a slew of department store retailers led by Macy’s (M). The encouraging earnings news, along with the lack of many attractive alternative investments—interest rates are near historic lows and investors still have reservations about the improving real estate market—has kept investors in equities. Year to date, the Dow Jones Industrial Average, the NASDAQ, the broader S&P 500 Index, and the small-cap Russell 2000 are sporting gains of 15.4%, 13.8%, 14.5%, and 14.8%, respectively.

Investors are showing a continued appetite for risk, but our sense is that the forthcoming economic news will need to be decent if investors are going keep pouring funds into the stock market. To this end, the Commerce Department, at 8:30 A.M. (EDT), reported retail sales for the month of April. At first blush, the report can be termed positive, as U.S. retail and food services sales increased 0.1% last month—the consensus was looking for a decline of 0.4%.

Elsewhere, trading thus far today in the overseas markets has been mixed. Overnight, results for Asia’s major indexes varied. Japan’s Nikkei 225 jumped 1.2%, as the yen continued to weaken against the dollar. The Bank of Japan is bent on lowering the value of the yen in an attempt to end the more than a decade long deflationary environment for the world’s third-largest economy. Conversely, China’s indexes fell, as data for Asia’s largest economy was mixed. Specifically, Chinese industrial production increased 9.3%, versus the consensus expectation of 9.5%; fixed asset investment rose 20.6%, slightly below the consensus expectation; and retail sales increased 12.8%, in line with what economists were estimating. Meantime, there is some profit taking going on in Europe, as the Continent’s major bourses are all modestly weaker as trading enters the second half. It has been a quiet day in the euro zone with regards to economic data.

Meanwhile, a stronger U.S. dollar once again is weighing on the two most closely watched commodities. (A stronger greenback makes commodities more expensive in overseas markets, which reduces demand for the products.) Both gold and oil are weaker this morning. The dollar is currently stronger versus both the yen and euro.  

With less than an hour to go before the commencement of trading on these shores, the equity futures are presaging a slightly lower opening for the U.S. equity market. Much like last week there may well be some profit taking at the start, but we would not be surprised if the bulls stepped back into the market, especially given the surprisingly positive report this morning on the retail sector. As noted above, we think the week’s economic data will play a major role in the equity market’s performance over the next five trading days. Stay tuned. – William G. Ferguson

At the time of this article’s writing, the author did not own any of the stocks mentioned.