After The Close - The U.S. stock market put in a somewhat mixed showing this morning, but turned selectively lower later in the afternoon. At the close of the session, the Dow Jones Industrial Average was up 14 points; the broader S&P 500 Index was down seven points; and the technology-heavy NASDAQ, which led the averages lower, shed 37 points. Market breadth was negative, as declining stocks outnumbered advancers by a decent margin on the NYSE and on the NASDAQ. Most of the major market sectors closed in negative territory today. There was particular weakness seen in some of the consumer cyclical issues. Also, the technology stocks were down sharply. Elsewhere, the utilities, while lower, displayed some relative strength. Notably, skittish investors often gravitate to these high-yielding issues when the markets become volatile.

Technically, the S&P 500 Index pulled back a bit today, after a making its way into high ground. Quite possibly, some consolidation is likely needed before the broad index can move beyond the widely-watched 1,800 mark. Sentiment turned a bit more cautious, as the VIX rose about 7% to 13.12 today. However, the VIX is still at relatively low levels.

There were just a few economic reports issued this morning. Specifically, the National Association of Home Builders (NAHB) Housing Market Index came in at 54 for the month of November, which was unchanged from the prior month’s downwardly revised reading. Tomorrow, will be a light day for economic news, too. As noted, a lack of news can often lead to directionless trading. However things should pick up a bit on Wednesday, as we are set to receive October retail sales and the Consumer Price Index.

In the corporate arena, there were limited corporate earnings reports, with few high profile names reporting. Nonetheless, Jinko Solar (JKS) stock was trading sharply higher, after that company posted better-than-expected results. Shortly, we will receive reports from a few retailers. The list includes Best Buy (BBY) and TJX Companies (TJX), and these issuances will be important, as the consumer sector has been quite important lately. - Adam Rosner

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


12:30 PM EST - The major U.S. equity indexes opened to the upside today as traders appeared ready to shoot for an eighth consecutive week of market advances. Market sentiment continues to be largely influenced by a growing consensus that the Federal Reserve Bank will continue with its aggressive bond buying program a bit longer than originally anticipated. The expectation that long-term interest rates will remain low helped push the Dow Jones Industrial Average to a new milestone this morning, edging past the 16,000 mark for the first time. The index got an extra boost thanks to Dow component Boeing (BA - Free Boeing Stock Report) announcing a large number of new plane orders over the weekend. BA shares were up as much as 4.4% in early trading. The S&P 500 also achieved new heights, briefly topping the 1,800 level. Meanwhile, the tech-laden NASDAQ remains the comparative laggard of the group as, even a decade after the Internet stock bubble burst, it’s still about 20% below its all-time peak. It did, however mark a new high for the year.

All three indexes backed off from their peaks earlier in the morning after the latest home builder sentiment came in below expectations. Specifically, the National Association of Home Builders/Wells Fargo Housing Market Index showed that home builder confidence was flat with last month’s reading. At the noon hour of trading, the Dow Industrial Average was holding onto a 40-point gain for the session, while the S&P 500 and NASDAQ were both hovering around the breakeven mark.

The European bourses fared decidedly better during their respective sessions. After opening slightly to the downside, stocks on the Continent got a big boost from a report that the euro zone’s trade surplus for September had improved by more than 50% over the prior-year period, to 13.1 billion euros (approximately $17.7 billion). Germany’s DAX and France’s CAC led the charge to the upside, with each rising about three-quarters of a percentage point. But London’s FTSE wasn’t too far behind, with a gain of just around half a percent. -Mario Ferro

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

Stocks to Watch from The SurveyEarnings news is quite light this morning, although the pace is scheduled to pick up this afternoon and later this week, as retailers, many with fiscal years that end in January, begin reporting October-period results. Meantime, shares of Tyson Foods (TSN) are up nicely ahead of the bell, after the chicken, beef, and pork processor reported September-quarter results that pleased investors. Elsewhere in corporate news, Sony (SNE) stock is moving higher in pre-market trading, likely on reports that the electronics company sold more than 1 million PlayStation 4 video game consoles on Friday, the first day the new device went on sale. – 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 new trading week begins with the major U.S. equity indexes standing at lofty valuations. The extended “bull run” currently in place, which has produced seven consecutive winning weeks on Wall Street, is being fueled by the Federal Reserve’s aggressive monetary policies. The role of the Federal Reserve and its ongoing impact on the market was front and center last week as the Senate held hearings to confirm Janet Yellen as the next leader of the Federal Reserve. During the confirmation process, Ms. Yellen, not surprisingly, took a dovish stance and the markets moved higher on sentiment that the Federal Reserve will continue its aggressive bond-buying program in the near term.

With the market frothy right now, we are not seeing the large advances that we witnessed at the beginning of the latest “bull run”. Instead, we are seeing some sector rotation on a daily basis. With the growing sentiment that the lead bank will continue to keep interest rates at historically low levels, the higher-yielding equities were in demand late last week, as they are more attractive to income-oriented investors than the fixed-income instruments when interest rates are lower—the yield on benchmark 10-year Treasury note fell six basis points over the final three days of trading last week. Meantime, toward the end of the five-day stretch, the economically sensitive sectors also were in demand, with the energy stocks leading the way last Friday. Conversely, the technology stocks did not perform that well last week, with a disappointing report from Cisco Systems (CSCO - Free Cisco Stock Report) weighing on the group.

Looking ahead, the investment community will once again be focused on the Federal Reserve, with current Federal Reserve Chairman Ben Bernanke scheduled to talk on Tuesday. We will also get the minutes from the latest Federal Open Market Committee meeting on Wednesday. The equity market has operated in recent weeks under the assumption that the central bank will continue its asset purchases in the months ahead. We do, however, warn that any deviation from that thinking could rattle a market that is clearly oversold right now. The new week begins with the S&P Volatility Index, also known as the “fear gauge”, sitting at 12.19, a level that suggests trading has overheated.

It also will be a big week for the economy, as we will receive important data on the consumer sector. In addition to reports on consumer and producer (wholesale) prices, we will receive that latest monthly retail sales figures. These reports will be closely scrutinized for clues about the psyche of the American consumer with the all-important holiday shopping season a little over one week from commencing with Black Friday. Investors should note that much of the housing data will be pushed back to next week as the schedule was altered following the government shutdown last month.

Meantime, the bullish sentiment was already on display today, as Asia’s major indexes, specifically those in China, rose sharply overnight. Investors there cheered the likelihood that the U.S. central bank will continue its loose monetary policy. In addition, news that China is very serious about some real economic reforms was greeted kindly by the investment community. The proposed reforms are designed to make the Asia powerhouse less reliant on exports and investments, while increasing the importance of the consumer sector. Likewise, the major European bourses are nicely higher as trading moves into the second half of the session on the Continent. There, the main catalysts appear to be the aforementioned news from Asia and the sentiment that the U.S. will continue its accommodative monetary policies.

With less than an hour to go before the start of trading on our shores, the U.S. equity futures are pointing to a higher opening for the U.S. market. Given the positive developments overseas and the dearth of news on the economy and the earnings front here, we would not be surprised if the bulls are in the driver’s seat once again today. Stay tuned.   - William G. Ferguson

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