After the Close - Stocks today recovered from early losses and posted moderate gains on signs that a deal was in the works to quickly end the partial government shutdown and raise the nation’s borrowing capacity. At the market’s close, the Dow Jones Industrial Average was up 64points and the NASDAQ was 23 points to the good. Those major averages had been off as much as 101 points and 26 points, respectively, early in the session. The broader market perked up, too, with advancing stocks outpacing decliners by about a 4-to-3 margin on the New York Stock Exchange.

Wall Street cheered the optimism that emanated from Capitol Hill as the day wore on. Leaders from both sides of the aisle voiced upbeat opinions about a resolution to the stalemate that had developed over the weekend. President Obama was supposed to meet with Congressional leaders late this afternoon, apparently with a deal in sight. That lifted the spirits of traders and investors around the globe who had feared the world’s largest economy, or at least its government, was about to be put into a financial straitjacket. Although the meeting at the White House was postponed as negotiations dragged on, there was no mistaking the more positive tone in the air.

Among the stock market’s sectors, shares of basic materials and energy companies fared the best. Those included Freeport-McMoran Copper & Gold (FCX); International Paper (IP); oilfield services giant Schlumberger (SLB), and coal miner Consol Energy (CNX). Shares of utilities lagged.

As for individual stocks, Netflix (NFLX) shares soared on word that the online entertainment company was discussing doing business with major cable TV operators. The shares hit an all-time high today, topping $325, rising from around $53 a year earlier. Back in 2011, the stock had previously breached the $300-a-share level.

On the down side, Expedia (EXPD) shares fell notably on an analyst downgrade.

Tomorrow will see earnings season move into high gear, although the drama being played out in Washington D.C. over reopening the government and boosting the nation’s credit limit will probably keep center stage. With any luck, our nation’s leaders will be able to forge a workable arrangement in the next 24 hours. Investors might well react badly if the latest round of negotiations were to experience a setback and the political battles lasted until late in the week, when the government has indicated it may not have the wherewithal to pay all of its bills - Robert Mitkowski

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


12:30 PM EST - The U.S. stock market opened lower this morning, but is now firming up, even though traders are still concerned about the ongoing political debate taking place in Washington. Notably, over the weekend, politicians made little progress in dealing with the nation’s immediate budget and debt problems. At just past noon in New York, the market is, as noted, coming off its session lows. The Dow Jones Industrial Average is down 21 points; the broader S&P 500 Index is lower by just two points; and the technology-laden NASDAQ is now up four points. Market breadth confirms a somewhat softer tone to today’s session, as declining stocks are outnumbering advancers by a modest margin on the NYSE.

A number of the market sectors are still trading lower today, with just a few pockets of strength. The utility stocks, usually seen as defensive investments, are particularly weak. The financial issues are also trading modestly lower, with declines throughout the sector. However, the basic materials issues are displaying some relative strength. Within this group, precious metals and mining stocks are advancing. The price of gold is up a bit today, and that is likely helping some of these issues. Notably, investors tend to flock to hard assets, such as gold and silver, when concerned about the stability of the economy or financial system.

Technically, the S&P 500 Index made some progress late last week. However, we will now have to see traders follow through and defend those gains. The broad index is now just at the widely-watched 1,700 mark, an area that may present some resistance, as it has in the past. The VIX, which is often used as a sentiment indictor, is up sharply, to over 17, further suggesting that traders are still concerned. Volatility, and a lack of sustained direction in the market, will likely be the name of the game for a while, or at least until the nation’s political situation is better defined.

There were no notable economic reports released this morning.  Further, the corporate news has been minimal, even though the September-quarter earnings season is officially under way. Coca-Cola (KO - Free Coca-Cola Stock Report), Johnson and Johnson (JNJ - Free Johnson & Johnson Stock Report), and many other prominent names, are set to release their quarterly results tomorrow. - 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 SurveyToday is the calm before the storm in terms of third-quarter earnings season. Indeed, the calendar is light today, due in part to the Columbus Day holiday (the bond market is closed while equity trading is going on as usual), but a slew of companies are scheduled to release financials tomorrow. Elsewhere in corporate news, shares of Netflix (NFLX) are up modestly ahead of the bell, after reports surfaced that the media content provider is in talks with cable companies to include its service on their set-top boxes. – 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 stock market, fresh off of its best performance of the year on Thursday, when the Dow Jones Industrial Average jumped by 323 points and the NASDAQ tacked on 83 points on emerging optimism that the White House and Congress would reach a deal to avoid a debt default within days, held onto to those outsized gains on Friday, and even managed to tack on some additional points for good measure, as those earlier debt resolution hopes appeared to be moving closer to being realized.

Of course, as the business week concluded, no deal had yet been brokered. In fact, the situation then eroded notably over the weekend, so that default is once again a real possibility. And even when such a meeting of the minds is finally achieved, the deal could well be a short-term affair, presumably six weeks, or a bit longer, meaning that this soap opera may well again be played out later this year. Also, there was no accord reached on ending the near two-week-long partial government shutdown. Still, even the modest earlier move toward a temporary debt deal was enough to drive the Dow an additional 111 points higher on Friday, for a net back-to-back rise of 434 points. The NASDAQ, meantime, added 31 points, while the small-cap Russell 2000 Composite jumped 11 points, surpassing the percentage gain on the larger-cap indexes. A late buying surge helped the indexes to close at their session highs, as investors sought to position themselves in the event of a deal being brokered over weekend. Now, some buyers' remorse is kicking in as no deal has, as noted, been brokered.

Meanwhile, economic news remains sparse, a casualty of the partial government shutdown and the furlough of workers who would normally be involved in calculating the data. Of note, a number of key reports, headlined by surveys on housing starts and industrial production, will be delayed this week. But we will be getting the Federal Reserve's Beige Book economic summation on Wednesday. That compilation will be used in helping the lead bank formulate monetary policy at its October 29th and 30th FOMC meeting. Our sense is that the Fed will hold off on any tapering moves at that time given the obvious penalty that the shutdown will exact on the economy, at least in the short run. The lack of plentiful economic data also will make forecasting much more difficult for pundits and the Fed alike to do their jobs. 

Now, a new week begins, and in addition to the aforementioned news vacuum, and the tide of third-quarter earnings releases, which will be out en masse this week, we have the Senate trying to reach a debt deal and being hampered at this time by a reopening of the contentious issue of automatic spending cuts, or sequestrations. Democrats in the upper chamber are trying to diminish the next round of these cuts, while Republicans are attempting to keep the program intact. So, as we near the deadline of this Thursday for avoiding a default, the jury is out on whether or not such an unwanted occurrence will take place. Up until now, the equity market's reaction has been muted, as it seemed as though a deal might be brokered in time. In fact, few have expected such an outcome to really be effected. But, at this time, there is no assurance of a happy ending.

As for the equity market this morning, the Standard and Poor's 500 Index futures are lower by some 14 points with less than an hour to go before the start of the new trading day, while the NASDAQ futures are in the red in almost 21 points and the Dow futures are in the minus column by more than 100 points. So, this would not presage an upbeat start to the new trading week, but, for now, more of an orderly retreat than an unqualified panic-driven rout seems to lie ahead.   

Finally, there are the earnings releases, which will be coming out in quick order this week, with data scheduled from a number of high-profile names in and out of the Dow Jones Industrial Average, including reports of note from such Dow heavyweights as Johnson & Johnson (JNJFree J&J Stock Report), Coca-Cola (KOFree Coca-Cola Stock Report), and Intel (INTCFree Intel Stock Report) due out tomorrow, alone. So, even without data on consumer prices, housing starts, and industrial production this week because of the government shutdown, it should be a busy five-day stretch. Stay tuned. – Harvey S. Katz 

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