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After The Close - The stock market put in another good session today, building on the rally that started a few days ago. Notably, the markets stayed strong this time with buyers actually stepping in during the afternoon, which is likely a constructive sign. At the close of the day, the Dow Jones Industrial Average ended up 114 points (0.8%); the broader S&P 500 Index was ahead 10 points (0.6%); and the NASDAQ added on 26 points (0.8%). The smaller names were on board with the rally too, as the Russell 2000 Index was up over 1.5%, indicating that speculative sentiment is still alive. Market breadth also suggested widespread buying of equities, as advancing stocks were ahead of decliners by almost 5 to 1 on the NYSE.  

All of the market sectors participated in today’s move, with leadership in the telecommunications and consumer cyclical names. In contrast, the healthcare stocks lagged the other sectors. The utilities also underperformed relative to the broader market.

Elsewhere, in the commodity markets, oil firmed up, and may soon be testing the $100-a-barrel mark, which should help the energy-related stocks. But, gold, the once popular hedge against a weak dollar and inflation, was off again today and is now just near the $1,200-an-ounce area.

Technically, the S&P 500 Index seems to have found some support after last week’s Fed-inspired selloff.  Today’s advance puts the broad index back at its 50-day moving average, located at 1,620. Now, it remains to be seen if this area presents any resistance, or if the market can move higher with a degree of ease. After running up to the low 20’s last week, the VIX has come down, and is now at about 16.82, suggesting traders are less apprehensive.

Meanwhile, there was some constructive economic news released today. First, initial jobless claims for the week ended June 22nd, came in at 346,000, meeting the consensus view. Personal income and spending also strengthened during the month of May. Elsewhere, the housing market recovery continues to gain steam, with pending home sales rising 6.7% in May. Homebuilders got a big lift from that news, as the group climbed over 2% today. Tomorrow is a light day for news, with the release of a regional economic report, and the University of Michigan’s Consumer Sentiment Survey final numbers for June being the lone reports of note. -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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12:20 PM EDT - Stocks are trading sharply higher again today, helped by some positive economic data. At the noon hour on the East Coast, the Dow Jones Industrial Average is up 129 points and the NASDAQ is 31 points higher. The gains are widespread, with advancing issues outpacing decliners by a wide margin on the Big Board. If the bullishness holds up, it would mark the third day in a row of triple-digit advances on the Dow.

Investors have apparently gotten past last week’s fears that the Federal Reserve was set to wind down its most aggressive stimulus measures. Yesterday’s weaker-than-expected GDP reading contributed to the feeling that business conditions were still in need of support from the central bank. Moreover, some of Fed Chairman Ben Bernanke’s lieutenants have stressed that there is still a long way to go before short-term interest rates rise.

Today’s economic data provided support to the stock market, in that it showed increases in personal income and spending on the part of consumers  and a decrease in initial unemployment claims. Pending home sales jumped to a six-year high, as well.

On the bearish side, however, federal agency Freddie Mac reported that mortgage rates have risen to their highest levels in nearly two years. To be sure, the recent average 4.46% rate for a 30-year mortgage is still a bargain for homebuyers. But that financing charge is notably higher than last week’s 3.93% average and the 3.66% rate in effect a year earlier. There is some concern that higher interest rates will act as a brake on sales for houses, cars, and other big-ticket items.

As for the market’s various sectors, the defensive groups that offer good yields, such as Utilities and Consumer Staples, are making a comeback from last week’s selloff.

One consumer name in the news is ConAgra Foods (CAG). Shares of the packaged foods company rose after it reported a rise in sales. 

Another sector faring well is healthcare, helped by an advance in Dow component Pfizer (PFE - Free Pfizer Stock Report) shares. Pfizer is the day’s most active issue on the New York Stock Exchange.

On the down side, Paychex (PAYX) stock is down after the payroll processor reported earnings late yesterday that missed Wall Street’s forecast.

Heading into afternoon trading, stocks are off of their best levels of the session, but are still nicely higher, overall. - Robert Mitkowski

At the time this article was written, the author did not have a position in any of the companies mentioned.
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10:55 AM EDT - The suddenly revived bulls have taken a big step forward today in their attempt to make it three up sessions in a row on Wall Street, as they are capitalizing on some decent economic data--most notably reported gains in personal income and consumer spending, and a drop in weekly jobless claims--to send equities sharply higher thus far today.

All told, as we approach the 90-minute mark of the trading day, the Dow Jones Industrial Average and the NASDAQ are up by 150 and 31 points, respectively, and advancers are way out ahead of declining issues on both the Big Board and the NASDAQ.

It also seems that recent fears that the Federal Reserve would be shortly reducing the rate of bond buying have eased somewhat. Furthermore, the global markets are getting some support from indications that the central banks in China and Europe will remain reasonably supportive in their monetary policies going forward.

All in all, it shapes up a solid day for the bulls following the downward fireworks of last week. Upcoming reports scheduled for next week on manufacturing, non-manufacturing, and employment, though, could have some say on whether or not this recent comeback will be sustained. -Harvey S. Katz, CFA

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 SurveyThere are some more earnings reports out today, though second-quarter earnings season will not begin in earnest for a few weeks. Meantime, investors have given the thumbs up to homebuilder KB Home (KBH) and packaged foods company ConAgra (CAG), as both of those stocks are indicating modestly higher openings this morning. Conversely, shares of homegoods retailer Bed Bath & Beyond (BBBY) and payroll, accounting, and human resources services provider Paychex (PAYX) are down ahead of the bell on earnings news. Elsewhere, the stock of DirecTV (DTV) is also lower in the premarket, after the satellite television operator said that its Latin America segment had overstated subscriber figures in 2012 and the beginning of 2013, which will likely result in a $25 million pre-tax charge in the second quarter. – 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 bulls, so forlorn and bent out of shape last week, have now come roaring back to life with back-to-back triple-digit advances in the Dow Jones Industrial Average and proportionately like-sized gains in the other principal indexes. Given such action over the past 48 hours, it would seem as though the worst fears of those perennial optimists are not going to be realized.

In a nutshell, what the bulls have been fretting about is the Federal Reserve. With the lead bank recently on record as suggesting that it was poised to start slowing down the pace of its bond-buying efforts in a move designed to let the maturing and still modestly advancing business expansion stand on its own two feet, the sellers had come into the market sensing that this was the moment that at least a moderate correction might take hold.

However, in the past two days, a sense has evolved that perhaps the Fed might not be ready to take such action by yearend as it had implied. What has given the bulls fresh life, apparently, is the feeling that the expansion is perhaps too weak to remove that added stimulus. Supporting the bullish case was the issuance yesterday morning of the government's final revision of first-quarter gross domestic product. Expectations had been that this key metric would have stabilized at 2.4%, where the first revised reading had come in. But when that figure came out at just 1.8%, many pundits immediately seized on this report as confirmation that the Fed would opt to hold off on any move toward less monetary accommodation.

Now, this morning, this disappointing economic tally seems to be giving equity players around the globe a further lift, with the major international markets all pressing higher, while our futures are suggesting a possible third day in a row of steadily improving equity prices. Also helping markets around the globe are further signs that lending rates in China will continue to ease, after the pledge issued earlier in the week in that country that authorities would move to shore up banks facing liquidity shortfalls. Remarks by the European central banks that they, too, would be responsive to liquidity needs have also emboldened the bulls around the world.

As to our equity markets, as noted, they rallied again yesterday, with the Dow Jones Industrial Average leaping by 150 points and the NASDAQ tacking on another 28 points. One asset class that did not rally yesterday, though, was gold, which fell anew, plunging by some $50 an ounce to $1,223 an ounce. Importantly, bond yields, which have soared in recent weeks, pulled back, with the return on the benchmark 10-year Treasury note easing to just under 2.55%, after having pushed up above 2.60% earlier this week. As such yields are key in setting up mortgage rate levels, such earlier upward pressure may, if it persisted, pose a threat to the recovering housing market. In fact, in just the past week, mortgage rates on 30-year loans have leaped a half a percentage point.

Thus, the bulls are massing, and with less than an hour to go before the start of the new trading day, the market seems set to try and make it three winning sessions in a row for those long equities. – Harvey S. Katz

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