After The Close - Stocks held their own today, posting modest gains ahead of the end of the Federal Reserve’s two-day policy meeting tomorrow. At the close of the session, the Dow Jones Industrial Average was up 35 points, flirting with an all-time high, and the NASDAQ was 28 points to the good, or stronger than the Dow on a percentage basis. Small-capitalization stocks, as measured by the Russell 2000 index, also outperformed. Market breadth was decidedly positive, with gainers roughly double losing issues on both the Big Board and the NASDAQ.

Setting the tone for the session was the announcement by Dow-30 component Microsoft (MSFT - Free Microsoft Stock Report) that the software giant was boosting its dividend by 22% and had authorized the repurchase of $40 billion worth of stock. Microsoft had been under pressure to initiate more such shareholder-friendly actions. Its stock rose moderately in active trading. Elsewhere, Facebook (FB) shares continued their recent surge.

In other markets, government bond prices rose with this morning’s report showing inflation was not a serious threat at the consumer level. The yield on the 10-year Treasury note, which moves inversely to prices, fell slightly, to 2.85%. Meantime, oil prices pulled back, as the push by global leaders to reach a diplomatic, rather than a military, solution regarding Syria’s alleged use of chemical weapons reduced the perceived threat to oil supplies. The price of a barrel of oil dropped over $1 a barrel, to around $105, in New York trading.  

Tomorrow appears set to bring a new set of guidelines for investors, in terms of the level of bonds bought on a monthly basis by the Federal Reserve. Expectations are for the Fed to perhaps reduce its purchases by $10 billion, to $75 billion a month. At the same time, the central bank is expected to reiterate its commitment to keeping interest rates extremely low for an extended period of time.

Also on tap for Wednesday is fresh data on the state of the economy with the release of figures on housing starts and building permits for August at 8:30 A.M. EDT. The thinking is that the numbers will show the housing market’s recovery remains on track.

Moreover, earnings reports are due out from FedEx (FDX) and General Mills (GIS) before the market opens, and Oracle (ORCL) after the closing bell. Year-over-year gains are projected in each case.

All of the goings on should make for an interesting session. -Robert Mitkowski

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


12:10 PM EDT -  The U.S. stock market continues to make progress. At just about noon in New York, the Dow Jones Industrial Average is up about 41 points; the broader S&P 500 Index is five points ahead; and the NASDAQ, which is once again displaying leadership, is higher by 18 points. The general tone of today’s session is positive, as advancing stocks are ahead of decliners by about two to one on the NYSE.

Almost all of the market sectors are advancing, which is encouraging. There is strength in the technology group, thanks to the computer hardware names. The industrials, which have firmed up over the past few weeks, also continue to advance. Further, the high-yielding utilities, which have been out of favor some time, are recovering a bit today, thanks to gains in the water operators. In contrast, there is some weakness in the telecom area. The healthcare stocks are also lagging.

Technically, the stock market continues to show some strength, and has come a long way off its August lows. Whether or not the market can sustain the upward move further, without a brief period of consolidation, remains to be seen. The S&P 500 Index may encounter some resistance, as it looks to move to high ground at about 1,710.

The economic news has been light today. However, we did get a look at consumer prices for the month of August. The CPI rose just 0.1% for the month, suggesting that inflation poses no immediate problem. No doubt, traders are looking ahead to tomorrow, as the FOMC is set to issue an interest-rate decision, and offer some remarks on the health of the economy. Further, the housing market, which is vital to the overall economy, will be back in the spotlight, as housing starts and building permits for the month of August are due out.

In the corporate news, there are a few items worth noting. Shares of Aeropostale (ARO) are up sharply on reports that a private equity firm has made an investment in the business. Further, in the biotech area, Dendreon (DNDN) stock, which had been badly battered, is up on some drug-related news. - Adam Rosner

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 - Corporate news is fairly light ahead of the bell, but there are some stocks to keep an eye on. Notably, shares of Outerwall (OUTR) are plunging in pre-market trading, after the company, which operates Redbox DVD rental kiosks, slashed its sales and earnings guidance. Management cited discounts and promotions for the shortfall and said that it was looking to scale back its growth plans in order to focus on profitability. Elsewhere, the stock of Pandora Media (P) is indicating a modestly lower opening this morning, after the Internet radio operator announced plans to sell 10 million shares of its stock (venture-capital firm Crosslink Capital plans to offer an additional 4 million).   – 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 - The U.S equity market has pushed nicely forward thus far in the month of September, in the process rebuffing the notion that this was not supposed to be a good month for the bulls. Historically, the end of the summer season has been marked by bearish sentiment, which clearly has not been the case yet on Wall Street. There have been several catalysts of late, including recent reports that a limited Western-led attack on Syria may be averted and breaking news this past weekend that Larry Summers had withdrawn his name from the list of possible candidates to replace Ben Bernanke as the next Federal Reserve Chairman. The latter news was cheered by investors, as Mr. Summers was seen as more likely to aggressively wind down stimulus than the new front-runner, Federal Reserve Vice Chairwoman Janet Yellen.

The first day of the new trading week saw the Dow Jones Industrial Average book another triple-digit gain, finishing the mostly positive session 119 points higher. The broader S&P 500 Index also moved higher, while the NASDAQ gave some ground on weakness in the technology sector. The recent struggles of Apple (AAPL) stock had a big hand in the sluggish performance of the technology sector, which, along with the energy stocks, were somewhat out of favor yesterday. In particular, oil equities declined, as crude prices fell on easing concerns about an attack on Syria, which potentially could have led to disruptions in the world’s oil supplies.

Meantime, some leadership came yesterday from the industrial, consumer staples, and healthcare stocks. The industrial sector got a nice boost from a positive report on industrial production and capacity utilization. That report will also likely be used by the Federal Reserve in setting its monetary policies at the two-day FOMC that began this morning. Our sense is that the central bank will slowly begin to taper its bond purchases this month.

However, not all the news was cheered by investors yesterday. There was some selling after President Obama said that he will not negotiate over an extension of the U.S. debt ceiling as part of an upcoming budget fight with Congressional Republicans. In recent years, the contentious budget negotiations and the failure to come up with an amiable solution has raised the volatility in the equity market. This situation bears watching, as the U.S. equity market appears overextended and any negative news emanating from Capitol Hill could spook investors and prompt some selling on Wall Street.  

Looking ahead to today’s session, the futures, which were lower early in the morning have reversed course and are now modestly positive. The NASDAQ futures, which have been strong from the get-go, are suggesting that there will be some bargaining hunting after yesterday lower closing for the tech-heavy exchange. However, we have already seen some selling in the international today. Specifically, there was some selective profit taking overnight in Asia, and the major European bourses are sitting in the red as trading enters the second half on the Continent. Over the course of today’s session, we would not be surprised if there was some hesitation on the part of investors to make a big move ahead of tomorrow’s monetary policy statement from the Federal Reserve. The futures are already suggesting that the indexes may start the day not too far removed from the neutral line. 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.