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After The Close - The bulls made another run today at the 16,000 level on the Dow Jones Industrial Average, and once again briefly surpassed--but did not close above-- that mark. At the end of the day, the Dow was down by nine points and the NASDAQ was off 18 points in choppy trading. The broader market saw more weakness, with decliners topping advancers by clear-cut margins on both the Big Board and the NASDAQ.
In addition, there has been somewhat of a divergence over the past five trading sessions, with strength in the large-cap Dow stocks contrasted by lackluster performance and among small and mid-cap stocks. That may be suggesting an overheated market.

For sure, there isn’t a tremendous amount for investors to get excited about regarding the global economy. The Paris-based Organization for Economic Cooperation and Development today reduced its outlook for worldwide GDP by 0.5% for both 2013 and 2014, to 2.7% and 3.6%, respectively. The OECD cited a slowdown in the economies of certain large developing nations, such as India and Brazil, for its less uplifting view.
Still, there were some notable bright spots in today’s trading. The shares of Dow-30 component Home Depot (HD - Free Home Depot Stock Report) shined, for instance. The home improvement chain exhibited strong profit growth in its fiscal third quarter, lifting the stock to a 52-week high.

Home Depot has truly found a formula for success. At one point, the company opened a store at a site where, over the previous 20 years, half a dozen retailers had tried to make a go of it, but didn’t last. The prior tenant was even another home improvement store, Hechingers. The problem at the location was that it was set back from the main highway by a connecting road, making it less accessible. But customers flocked to Home Depot anyway, and eventually the company built a new store across the highway, with easier access.

Also moving higher were the shares of another Dow component, J.P. Morgan (JPM - Free J.P. Morgan Stock Report), where traders were enthused by the possibility of a broad settlement to the bank’s legal woes. Another winner was the stock of meat producer Tyson Foods (TSN), which reported strong profits on Monday.
On the down side, shares of Campbell Soup (CPB) tumbled after the food processor served up weak earnings and a reduced outlook.

Tomorrow, provided the earnings and economic news is supportive, the bulls may again attempt to push over the 16,000 level on the Dow. - Robert Mitkowski

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

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12:30 PM EST - The U.S. stock market is putting in a choppy, and somewhat mixed, showing this morning. As we pass the noon hour in New York, the Dow Jones Industrial Average is up about 23 points; the broader S&P 500 Index is essentially unchanged; and the technology-heavy NASDAQ is ahead slightly. Market breadth is mixed too, as declining issues are outnumbering advancers by a narrow margin on the NYSE. However, these figures are more favorable on the NASDAQ. Many of the major market sectors are slightly lower today. Notably, some weakness can be seen in the consumer non-cyclical sector. Further, the utilities, normally defensive issues, are weak today. In contrast, healthcare stocks are advancing, helped by the biotechnology names.

Technically, the S&P 500 Index, which has made a large upward move over the past month, or so, has encountered a bit of resistance lately, at the widely-watched 1,800 area. This is not unusual, and it may take a few attempts before the broad index can make a sustained move higher from here. Traders may be feeling a bit less assured lately, as the VIX is up about 2% to 13.37 today.

There were no notable economic reports issued this morning, and the information vacuum may be contributing to the directionless session. Nonetheless, the news should pick up tomorrow, as the October retail sales figures are slated to be released. We are also due to get a look at the October Consumer Price Index.

In the corporate arena, even though the third quarter earnings season is largely over now, there were a few important earnings reports released today. For one, Dow-component Home Depot (HD - Free Home Deport Stock Report) stock is trading near new 52-week high ground, after the home building supplies retailer posted strong quarterly results, and issued an encouraging outlook. Elsewhere in the retail area, Best Buy (BBY) stock is lower as investors were less than impressed with the company’s guidance. Things went a bit better for TJX Companies (TJX), as that stock is up, after a favorable release. -Adam Rosner

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

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Stocks to Watch from The Survey – After a brief respite, the earnings calendar is heating up again, with October-period reports starting to flow, many of which are from retailers with fiscal years that end in January. Leading the pack is The Home Depot (HDFree Home Depot Stock Report). The world’s largest home-improvement retailer has reported better-than-expected fiscal third-quarter financials and increased its guidance. HD shares are moving modestly higher ahead of the bell as a result. Other stocks indicating stronger openings this morning on earnings news include athletic apparel and equipment seller Dick’s Sporting Goods (DKS) and Brocade Communications (BRCD), a developer of switches and software for connecting computers and software.

It wasn’t all good news, however, and shares of apparel and accessories retailer Urban Outfitters (URBN), customer relationship management services provider salesforce.com (CRM), packaged foods company Campbell Soup (CPB), electronics retailer Best Buy (BBY), and medical supplies company Medtronic (MDT) are all moving lower in pre-market trading on earnings news. - Matthew E. Spencer

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

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Before The Bell - The first trading day of the new week started out on an upbeat note, with the Dow Jones Industrial Average and the broader S&P 500 Index hitting some lofty milestones at 16,000 and 1,800, respectively. The early move forward was prompted by some encouraging news from overseas. However, as the day progressed, the profit takers emerged, with some unnerved by comments from Philadelphia Fed President Charles Plosser and activist investor Carl Icahn. The district leader, who will be a voting member on monetary policies in 2014, said the Federal Open Market Committee missed an excellent opportunity to begin tapering in September, while Mr. Icahn said he is “very cautious” with regards to equities and would not be surprised by a “big drop”. Not surprisingly, the S&P 500 Volatility Index (or VIX) jumped on the aforementioned statements.

While the Dow Jones Industrial Average was able to eke out a small gain yesterday, it was mostly a difficult session for those who have grown accustomed recently to the U.S. indexes finishing with a positive flurry. In fact, the S&P 500 Index, the tech-heavy NASDAQ, the small-cap Russell 2000, and the S&P Mid-Cap 400 Index finished 0.4%, 0.9%, 0.8%, and 0.7% lower, respectively. Investors, for the first time in several sessions, showed some resistance toward adding more risks to their portfolio. Not surprisingly, declining issues led advancers on both the New York Stock Exchange and the NASDAQ.

From a sector perspective, nine of the 10 major groups finished in the red, with the only exception being the telecommunications stocks. Yesterday’s biggest laggard was the technology sector, which was the primary reason why the NASDAQ recorded the largest decline among the major U.S. equity indexes. Also notably weaker were the basic materials and consumer staples stocks.

After a light day on both the earnings and the economic fronts yesterday, investors will have a bunch of quarterly reports to review this morning. At first blush, the results seem to be mixed. Of note, Best Buy (BBY) issued mixed results, surpassing earnings expectations, but issuing cautious guidance. Campbell Soup (CPB) stock is also indicating a lower start after the food processor missed earnings expectations and lowered its guidance for 2014. Conversely, Home Depot (HDFree Home Depot Stock Report) should start the session in positive territory after the home improvement retailing giant beat forecasts on better-than-expected revenues. Urban Outfitters (URBN) also posted better-than-expected earnings, but the stock is indicating a lower opening.

Elsewhere, the bearish sentiment that emerged late in yesterday’s session here appears to have spilled over into the international markets. Overnight, Asia’s major indexes finished modestly lower, while trading thus far in Europe has been weak. The profit taking on the Continent has been a bit more pronounced than what took place earlier in Asia, as trading moves into the second half there.

Before the start of the trading day on the homeland, the equity futures are presaging a lower opening for the U.S. equity market. Are we starting to see a bit of correction in a market that is clearly overbought? Our sense is that will depend upon what the Federal Reserve—Chairman Bernanke is scheduled to speak today and the minutes from the latest FOMC meeting are due tomorrow afternoon—has to offer. Investors should also note that the economic news picked up considerably tomorrow, with the latest data on monthly retail sales and consumer prices due to be released. These reports are likely to be highly scrutinized as a gauge to how the American consumer is feeling ahead of the rapidly approaching holiday shopping season. - William G. Ferguson

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