After the Close - The U.S. stock market put in a mixed session today. At the end of the day, the Dow Jones Industrial Average was off about 21 points. The S&P 500 Index ended off slightly, as well. However, the NASDAQ managed to gain about 10 points. Market breadth was mixed, too, with advancing stocks about even with decliners. The market sectors put in a largely divided performance. There was leadership in the consumer non-cyclical names. The telecommunications stocks are also performed well. However, there was weakness in the basic materials issues, and the utilities declined a bit.

Technically, the S&P 500 Index continues to consolidate, moving in a sideways trading range. There seems to be some support at the 1,680 level, at least for now. Hopefully, the market will maintain its upward bias, even as the earnings season dies down.

Meanwhile, the economic reports put out this morning probably helped support the market, at least at the opening. Specifically, the ADP Employment Change report for July showed some progress being made on the jobs front. This may have had some traders speculating that the government Employment report for July, due out Friday, will be favorable. Also, the initial estimate for GDP for the second quarter showed a 1.7% increase. Finally, we heard from the FOMC, and there were indications that the Fed will continue to take measures to maintain a favorable interest- rate environment.

The earnings reports continued to come in, as well.  In the technology sector, area, we heard from Symantec (SYMC). That stock traded higher on an encouraging report. There was also some more M&A activity. Cubist Pharmaceuticals (CBST) has entered into a merger agreement with Optimer (OPTR). - Adam Rosner

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


12:00 PM EST - The major U.S. equity indexes are up nicely as we reach the midday hour on the East Coast, highlighted by the Dow Jones Industrial Average hitting a new high. But the market is still off of earlier highs likely owing to some caution ahead of the Federal Reserve’s commentary later this afternoon. Still, the major averages, benefitting from strong performances for both large- and small-cap stocks, got a boost from a better-than-expected initial reading on second-quarter GDP, which was issued before the commencement of trading this morning. The 1.7% gain was considerably higher than the lowered consensus expectation. A strong batch of earnings reports (more below) issued earlier this morning also is pushing the U.S. equity market higher. Overall, advancing issues hold a lead over decliners on both the New York Stock Exchange and the NASDAQ, but the spread on the Big Board is pretty narrow. Again, this is likely due to some apprehension ahead of the Fed’s announcement.

Our sense is that the latest GDP report was music to the ears of investors for a few reasons. First, it was better than expected and an indication that the economy is slowly pressing forward. However, the growth (at 1.7%) also was not formidable enough to raise concerns that the Federal Reserve will quickly put the brakes on its bond-buying activity. That said, we will get more color on this matter in less than two hours from now.

Not surprisingly, those sectors most closely tied to the economy (i.e., energy, financials, industrial, and consumer discretionary) are in positive territory. Conversely, the basic materials, telecommunications, and utilities issues are tolling in the red, with the former still under pressure from the fertilizer producers. There is rotation out of the high-yielding telecom and utilities stocks is likely prompted  by today’s spike in bond yields. Such vehicles are an attractive alternative to such equities. In fact, the yield on the benchmark 10-year Treasury note is up nearly 10 basis points so far today, and is sitting at its highest level since July 5th. 

As noted above, the earnings picture is bright today. The beverage companies, led by shares of Anheuser Busch InBev (BUD), Diageo (DEO), and Sodastream (SODA) are nicely higher on good quarterly results. The group is giving a nice boost to the consumer cyclical stocks. Other notable advancers include Symantec (SYMC), Garmin (GRMN), Buffalo Wild Wings (BWLD), and Comcast (CMCSA). Investors also should note that shares of Facebook (FB) topped their initial public offering price of $38 a share earlier today. Conversely the stocks of Delphi (DLPH), Aflac (AFL), and Philips 66 (PSX) are among a group trading lower on disappointing earnings.

Looking ahead to the second half of the trading day, the investment community’s attention will be focused on what the Federal Reserve has to offer following the conclusion of its two-day monetary policy meeting. What Chairman Ben Bernanke has to say will probably dictate which direction trading heads over the final two hours of today’s session. Stay tuned.   - 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 SurveyThe earnings parade continues, and today looks to be a good one for beverage companies. Indeed, shares of brewer Anheuser Busch Inbev (BUD), wine and spirits manufacturer and distributor Diageo (DEO), and soft drink company Sodastream (SODA) are all trading higher in the premarket on earnings news. Other notable stocks advancing ahead of the bell include restaurant operator Buffalo Wild Wings (BWLD), cable company Comcast (CMCSA), health insurer Humana (HUM), video game publisher Take-Two Interactive Software (TTWO), and credit card processor Mastercard (MA). On the other hand, shares of automotive parts manufacturer Delphi (DLPH), financial services company Genworth (GNW), insurer Aflac (AFL), and integrated petroleum company Philips 66 (PSX) are all indicating lower openings this morning on earnings disappointments. – 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 - It was another mixed session on Wall Street yesterday, with the Dow Jones Industrial Average and the Standard and Poor's 500 Index unable to hold on to some initial gains, but conversely adept at overcoming some early afternoon losses. All the while, the tech-heavy NASDAQ, abetted by solid gains in the tech area, managed to retain some healthy increases. By the close, the Dow and S&P were near the breakeven line, while the NASDAQ had posted a 17-point gain. The mid- and small-cap indexes, meantime, did a little better, in a testament to the recent broadening of the aging market advance.

In addition to the better tech showing, and a mixed performance by the two drug making behemoths on the Dow, specifically Pfizer (PFEFree Pfizer Stock Report), which rose, and Merck (MRKFree Merck Stock Report), which fell on earnings news, there was another notable selloff in the basic materials (in particular the fertilizer stocks) and to a lesser degree some of the steels, following a somewhat disappointing quarterly report from metals giant, U.S. Steel (X).

The early equity market gains, meantime, were largely sparked, we sense, by solid increase in Asia and some follow-up recovery buying in Europe. However, an unprepossessing report on consumer confidence on our shores, logical nervousness ahead of the two-day Federal Reserve FOMC meeting, which concludes this afternoon, some selective disappointments on the earnings front, and worries ahead of the issuance of a series of key economic reports beginning with the just-released estimate of the second-quarter gross domestic product (see below) subsequently combined to take the measure of the bulls.

However, yesterday's generally mixed market tone was a clear reaffirmation that it will apparently take more than a modest dose of disquieting earnings news to dampen the spirit of the confident bulls; it likely would take some overt indications that the Fed is about to pull the plug on its aggressively accommodative monetary policies--specifically an abrupt end to its bond buying--to really trip up the bulls and embolden the now hibernating bears. Unfortunately for the latter, such an occurrence is highly unlikely at this time. In all, we sense that the Fed will be suitably vague following the meeting's conclusion, leaving the day of reckoning for its bond buying further down the road--perhaps at its September meeting.    

Meanwhile, another day will soon start, and thus far it is a ho-hum backdrop that greets U.S. investors, To wit, stocks in Asia were mixed overnight following the prior session's stealth gains. The story is much the same in Europe. And over here, some early losses in the futures have been pared, as the Commerce Department has just reported that second-quarter GDP rose by 1.7%, far exceeding the much-more tepid estimates of some bearish forecasters. The first quarter's initially estimated growth rate of 1.8%, however, was reduced to 1.1%. Thus, it was a mixed bag. Looking ahead, most economists expect the third quarter to see a mild step up in growth, to perhaps around 2%. – Harvey S. Katz   

At the time of this article's writing, the author had positions in PFE.