After The Close - Stocks bounced back to a degree today after heavy selling yesterday, but ended the week lower. At the closing bell, the Dow Jones Industrial Average was up 76 points and the NASDAQ was 33 points to the good, or relatively stronger than the Dow. Gaining issues topped decliners by nearly a two-to-one margin on the New York Stock Exchange, pointing to broad underlying strength.

It was an unusual session in that, owing to the government shutdown, investors were denied access to the important monthly government payroll report, which comes out on the first Friday of most months. There is a good possibility that the number would not have been much different from the 166,000 private sector jobs reported to have been added in September by Automatic Data Processing (ADP) on Wednesday. But it would have been nice to know the details, if hiring strengthened or weakened, revisions of past estimates, and so on. That will have to wait for another day.

As for the government shutdown, which was in Day Four, little progress appeared to be made in Washington. It may be that lawmakers will have to wait for the nation to get close to reaching the so-called debt ceiling, on track to be hit on October 17th, for a comprehensive fiscal agreement to be reached

In any case, investors shrugged off the politics of the situation, at least for today. The feeling seems to be that a default on the debt has the potential for so much damage that lawmakers could not possibly allow it to happen. However, it could come down to the wire, and the economy is taking a bit of a hit while the government is shut down. As for today, all ten stock market sectors rose on the session, with shares of energy, basic materials, healthcare, and consumer cyclical companies among the biggest winners.

In general, too, interest in the U.S. stock market remains high. One indication is the strength of recent initial public offerings. Today marked the debut of sandwich-shop chain Potbelly (PBPB), whose stock was warmly received. There is a buzz about the possibility of Twitter (expected ticker: TWTR) doing an IPO soon, as well. And investors have clearly gotten past the disappointment of last year’s IPO of Facebook (FB), given the strong performance of that stock lately, today included.

But despite the market’s positive tone on Friday, stocks fell modestly for the week as a whole.   - 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 is trading modestly higher today, after yesterday’s selloff. Some of the volatility lately, no doubt, reflects traders’ ongoing concerns about the government shutdown, and the upcoming debt-ceiling debate. At just about noon in New York, the Dow Jones Industrial Average is up 35 points; the broader S&P 500 Index is up six points; and the NASDAQ, which is once again assuming a leadership role, is tacking on 23 points. Market breadth is favorable today, as advancing stocks are ahead of decliners by roughly two to one on the Big Board.

Most of the market sectors are in positive territory, which suggests a broadbased rally. There is notable strength in the basic materials sector, thanks to gains in the chemical stocks and strength in some of the miners and metals manufacturers. Healthcare issues are also making solid contributions, helped by strength in the biotechnology area. Investors should note that this dynamic group has outperformed the broader market over the past year and remains an area of leadership. In contrast, the high-yielding utilities, which have been laggards lately, are relatively weak again today.

Technically, today’s move higher puts the S&P 500 Index just above its 50-day moving average, located at about 1,680. Hopefully, the broad index will find some support at this key technical level, as it has on a few occasion earlier this year. For now, traders seem to be feeling a bit better about the market, as the VIX is lower today. However, this does not suggest that things will be less volatile, especially with the unsettling situation in Washington, and the third-quarter earnings announcements due to start streaming in.

Traders received limited economic news today, due to the government shutdown. Specifically, the employment report for the month of September was not released earlier this morning, as scheduled.  The absence of that important report may have contributed to some weakness in the market at the opening. 

In corporate news, shares of Forest Oil (FST) opened higher, but are now off considerably on news that the company will be selling some assets, located in Texas for about $1 billion. Meanwhile, Union Pacific (UNP) shares are slightly lower, after the railroad giant provided updated third-quarter guidance that failed to impress investors. - 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 SurveyCorporate news is rather light ahead of third-quarter earnings season, which kicks off next week. However, there is some corporate news to be aware of this morning. Shares of Forest Oil (FST) are up nicely ahead of the bell, after the energy company announced that it was selling some assets in Texas for roughly $1 billion. Elsewhere, on the earnings front, railroad operator Union Pacific (UNP) guided to third-quarter earnings that were a bit below investors’ expectations, due in part to mild weather, which hurt coal volumes. The stock is trading slightly lower in the premarket as a result. On the other hand, telecommunications equipment company Comtech (CMTL) has reported better-than-expected July-period earnings and issued an upbeat outlook. – 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 first trading week of October has not been kind to those long equities. Indeed, selling has intensified in recent sessions—including yesterday’s respective declines of 137, 41, and 15 points for the Dow Jones Industrials, the NASDAQ, and the S&P 500 Index—as the U.S. federal government shutdown (now in its fourth day) has unnerved investors. The Dow 30 finished below the psychologically significant 15,000 mark for the first time in nearly a month. Even more disconcerting to the investment community has been the lack of progress toward a budget agreement between the bickering parties in Washington. A protracted shutdown will likely threaten the economic progress that has been made thus far in 2013.

The soap opera on Capitol Hill will no doubt remain the focus of Wall Street today, as the much-anticipated report on the job market for the month of September will be delayed by the shutdown. This could have long-ranging effects, as the employment and unemployment data will be crucial to the Federal Reserve in its decision on what course to take with regards to monetary policy at its FOMC meeting later this month. The consensus on Wall Street was that some form of bond-buying tapering would be implemented, but our sense is that such a maneuver could be put on hold depending on how long the government shutdown lasts, and how contentious the forthcoming debt-ceiling negotiations are later this month.

As noted, this week has not been good thus far for those long equities. Entering the final trading day, the Dow Jones Industrials, the NASDAQ, the S&P 500 Index, and the small-cap Russell 2000 are down 1.7%, 0.2%, 0.8%, and 0.3%, respectively. The bickering on Capitol Hill, along with yesterday’s weaker-than-expected report on nonmanufacturing activity from the Institute for Supply Management, has prompted the profit taking in recent days.

Meantime, the news from overseas has not provided investors with much comfort either. Overnight, Asia’s major indexes—most notably Japan’s Nikkei—fell after the Bank of Japan warned that a continued U.S. fiscal stalemate could hurt the world financial and equity markets. We also learned today that Japan’s central bank has maintained its monetary policy stance, leaving its key interest rate unchanged at about 0.1%, and the country’s ruling LDP party is expected to consider implementing corporate tax cuts and lowering the sales tax on food. Elsewhere, the European bourses are putting in a mixed showing following a statement from European Stability Mechanism chief Klaus Regling, in which he said that he expects Greece to require a third bailout package.

Turning back to these shores, the equity futures are suggesting a slightly higher opening for the U.S. equity market. At least initially, there may be some bargain hunting following the recent three-day slide for the major market averages. However, we would not be surprised if the bears responded quickly as investors are worried that the budget impasse will have an impact on discussions about raising the country’s debt ceiling in mid-October. A failure to do so would have far-ranging global economic and financial consequences. One bright spot was a statement from House Speaker John Boehner yesterday evening that he is willing to work with Democrats to raise the debt limit. – William G. Ferguson

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