After The Close - The stock market opened higher this morning and put in a constructive, but uneven session throughout. At the end of the day, the Dow Jones Industrial Average was up 89 points (0.6%); the broader S&P 500 Index advanced nine points (0.5%); but, the tech-heavy NASDAQ, which retreated at about noon, finished up five points (0.2%). Most stocks made some progress, as advancers outnumbered decliners by almost 2 to 1 on the NYSE. The showing was somewhat less impressive on the NASDAQ. Most of the market sectors advanced, with leadership in the utility stocks, consumer names, and financial issues. The recovery in the utilities was good to see as this sector had been battered recently on interest-rate concerns. Some strength in this group may further suggest that these concerns are not as pronounced as they had been. Basic materials did a bit better today, too, as gold prices, which have fallen sharply since the start of the year, firmed up. In contrast, the technology sector declined.

Technically, the S&P 500 Index managed to close above its 50-day moving average, located at 1,627, on Friday. Given that much of Wall Street was celebrating a four-day holiday weekend, lower volumes were to be expected. Today, the market managed to extend Friday’s gains, which is a positive indication, and positions the market further above this key technical support and just about 3% from its 52-week high of 1,687. From here, the bulls will still have to show some force to push the index into new high ground, and there will likely be some resistance in the process. The second-quarter earnings season is just starting up, and some favorable headline reports may provide the needed catalyst.  Investors seem to have turned bullish again, as the VIX, now at just below 15, was slightly lower today.

The economic news was quite light today. However, traders may still be celebrating the strong employment news put out on Friday. There is little economic news expected out tomorrow, either. But, things pick up on Wednesday, as we receive a wholesale inventories report for May, and the FOMC releases the minutes from its June 19th meeting. More likely, investors will be concentrating on earnings releases. We are expected to receive word from Dow component Alcoa (AA - Free Alcoa Stock Report) after the close today, and that kicks off the unofficial start of the earnings season.   - Adam Rosner

At the time of this article's writing, the author had a position in Alcoa (AA).


12:00 PM EST - Many traders who took four-day vacations around the July 4th holiday returned to the equity market this morning and, in the process, are extending Friday’s gains that were achieved on light volume. Once again pushing the market higher was last week’s better-than expected report on the labor market. Some encouraging news from the Continent (more below) also is giving a boost to stocks over there and on our shores. Thus, as we pass the midday hour on the East Coast, the major U.S. equity, with the exception of the tech-heavy NASDAQ (see below), are notably higher, with the Dow Jones Industrials at one point up in triple digits. Advancing issues are leading decliners by a considerable margin on both the Big Board and the NASDAQ.

As noted, the report from the Labor Department showing that the nation added 195,000 positions in June was greeted favorably by market participants who are willing to look past the sentiment that it could push the Federal Reserve to step on the accommodative monetary policy brakes by as soon as this fall. Investors were also encouraged to see the nation add more than 200,000 new jobs on a monthly basis through the first half of this year. Not surprisingly, nearly all of the sectors, including those closely tied to the economy, are nicely higher thus far today. There is some relative weakness in the technology issues, which are being pressured by Intel (INTC - Free Intel Stock Report) stock. Shares of the Dow 30 component are weaker after an investment bank lowered its outlook for the chipmaker, citing the struggling personal computer market. The Intel news is weighing on technology and is the main reason why the NASDAQ Composite is underperforming relative to the other major equity indexes.

Elsewhere, the major European bourses are looking to put the finishing touches on a very productive session on the Continent. In addition to the favorable reaction to the aforementioned U.S. labor data, the European bourses greeted positively a joint European Union-International Monetary Fund panel statement saying Greece has made important progress, but remains behind in some areas of policy implementation. Investors took heart that progress was being made as a sign that the struggling nation will continue to receive the proceeds from its bailout loan and work toward implementing some harsh austerity measures. The news on Greece more than offset a worse-than-expected decline in the euro zone’s Sentix Investor Confidence Index and a 1.0% decline in Germany’s industrial production.

Looking ahead, the attention of the investment community will most likely shift to the upcoming earnings season, which officially kicks off after the close of trading today when aluminum giant and Dow-30 component Alcoa (AA - Free Alcoa Stock Report) releases its latest quarterly results. The current Wall Street consensus expectation is that earnings for companies in the Standard & Poor's 500 Index rose by 3% year over year in the second quarter. Investors may be paying closer attention over the next few weeks to companies that provide raw materials and the technology firms. Those two areas were expected to have been a drag on growth in the latest quarter. Results at mining and other companies that provide gold, aluminum and similar products likely slowed because of lower commodity prices in recent months. Overall, the outlook for the earnings season has been far from great, as a good deal of the more-than-100 S&P 500 companies that offered guidance for the latest quarter has been negative. Stay tuned here for updates on the forthcoming notable earnings releases.   - 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 SurveySecond-quarter earnings season is set to kick off after the market closes today, when aluminum giant Alcoa (AAFree Alcoa Stock Report) is scheduled to release June-period results. Meantime, shares of Boeing (BAFree Boeing Stock Report) will likely be in the spotlight today, after one of the aerospace company’s 777 planes, which was operated by Asiana Airlines, crashed while landing at San Francisco International Airport over the weekend. BA stock is flat ahead of the bell. – 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 - A new week is about to begin on Wall Street, and there are plenty of green arrows around to warm the heart of any bull. True, the equity market did push lower overnight across much of Asia, but things have righted themselves in Europe so far this morning, with gains across the board and, in fact, solidly so in London and especially in Paris and Frankfurt. And on our shores, the Standard and Poor's 500 Index futures are better by nine points and the NASDAQ futures are up by a resounding 18 points, presaging a notably higher opening on Wall Street when traders get down to business within minutes from now.  

As to the markets, they appear to be celebrating the good jobs report on our shores issued last Friday by the Labor Department in which that agency affirmed that the nation had added 195,000 net new payrolls last month, easily eclipsing the consensus forecast of some 160,000 jobs. Also, encouraging, the government reported that non-farm payrolls were revised higher for both April and May, and sharply so, with an average of close to 200,000 jobs being added per month during the second quarter. Moreover, average job growth exceeded 200,000 a month in the first six months of this year. Such a decent level should be enough, if sustained, to slowly lower the still-lofty 7.6% unemployment rate over the next few quarters.

Stocks initially soared on this good news, with the Dow quickly gaining about 125 points. Then, however, the sellers came in on fears that such economic strength would persuade the Federal Reserve to start cutting back on stimulus before yearend and perhaps bring its bond-buying efforts to a conclusion prior to its targeted mid-2014 date. However, such concerns were overwhelmed by the good news on this slow volume semi-holiday session, and the buyers quickly returned to the fray and bid stocks up even more sharply than earlier in the session. By the close, in fact, the market was at its high for the session, with the Dow Jones Industrial Average gaining 147 points, to close at 15,135. The NASDAQ, meantime, jumped 36 points, as advancing issues easily beat out decliners on both the Big Board and the aforementioned NASDAQ.

On the other hand, there is no bull market afoot in bonds, with the good economic news causing fixed-income instruments to fall off sharply. In all, the yield on the 10-year Treasury note, upon which home mortgages are fed off, rose to the year's high of 2.74%, while the companion 30-year Treasury bond was priced to yield some 3.70%. Such instruments remain near these lofty levels thus far this morning.

In other news, earnings season will begin later this afternoon, with struggling Dow component and aluminum maker Alcoa (AAFree Alcoa Stock Report) due to report its second-quarter results. That data are scheduled for release after the close of trading. Then, later in the week, the big banks will start to issue their second-quarter metrics, including Dow component JPMorgan Chase (JPMFree JPMorgan Stock Report). A much more formidable array of reporting companies is due to issue results next week, when earnings season really kicks into gear.

Finally, it is a light news week on the economic front, after the fireworks of the past holiday shortened week, which had featured issuances--besides the employment report--on manufacturing, non-manufacturing, and auto sales.  This week, by comparison, there are only reports on initial jobless claims (on Thursday) and producer prices and consumer sentiment (on Friday). – Harvey S. Katz

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