Loading...
 

After The Close - The U.S. stock market opened higher this morning, and built on those gains through the session. The fact that the bulls managed to keep up their buying campaign throughout the day suggested that there was some commitment to the move. At the end of the session, the Dow Jones Industrial Average was ahead 109 points; the broader S&P 500 Index was higher by 14 points; and the technology-heavy NASDAQ, which led the market higher, tacked on 48 points, or about 1.2%. Market breadth was highly favorable, as advancing issues outnumbered decliners by about 3 to 1 on the NYSE and the NASDAQ. All of the major market sectors made progress, with leadership in the financial stocks. The technology names also logged an impressive advance. While there was no weakness worth noting, the basic materials issues lagged a bit today.

Technically, the S&P 500 Index, after pulling back for the past three days, logged an impressive advance, ending just below the widely watched 1,800 mark. The Dow managed to move through the 16,000 area, which is a milestone number, and probably carries some psychological importance. We will have to see if the bulls can follow through on these gains in the coming days. Meanwhile, the VIX moved about 5% lower, to 12.75 today, suggesting sentiment is quite bullish, and possibly too much so. Nonetheless, with the holidays about to begin, many traders and money managers, concerned about under-performance, may be looking for further gains, supported by added accumulation.

Meantime, traders were likely pleased with the day’s economic news. Foremost, the employment situation is showing considerable improvement. Specifically, initial jobless claims for the week ended November 16th, dipped to 323,000, which was well below the prior week’s level, and better than anticipated. Meanwhile, producer prices for October confirmed that the inflation outlook is still quite benign. However, the economy in the Philadelphia region has been a bit choppy, as the Philadelphia Fed’s measure for that region came in at 6.5 in November, down sharply from the prior month’s showing. Elsewhere, Janet Yellen made some progress on route to becoming the next Federal Reserve Chairman, as her nomination was backed by a Senate committee. 

In the corporate arena, there were a few earnings reports released today worth mentioning. For one, Green Mountain Coffee Roasters (GMCR) stock traded higher after that company delivered healthy figures. But, Abercrombie & Fitch stock was mixed after the apparel retailer issued weak guidance. Sears (SHLD) also saw its stock slip on a weak report. After the close today, we hear from widely followed companies, the Gap (GPS) and Pandora (P).   - Adam Rosner

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

-

12:00 PM EST - Stocks are firmly in the plus column today on some encouraging business and economic news. Right around the noon hour on the East Coast, the Dow Jones Industrial Average is up 95 points and the NASDAQ is higher by 35 points, or more on a percentage basis than the Dow. Market breadth confirms the advance, with gainers topping declining issues by a wide margin on the New York Stock Exchange.

The morning started off with a favorable reading on weekly initial jobless claims, while inflation at the wholesale level came in tame, as expected. Another data point, the so-called "flash’" Purchasing Managers Index put out by financial information data vendor Markit also pointed to better prospects for manufacturing in the United States, although the same measure wasn’t as upbeat for Europe or China. Meantime, a lower-than-expected reading on business conditions in the Philadelphia region didn’t derail the bulls.

In the bigger picture, news that the Senate Banking Committee had approved Janet Yellen for the top job at the Federal Reserve was taken as a positive. Ms. Yellen’s views that the Fed should take a proactive stance toward the economy coincide with Wall Street’s stance. A full Senate vote confirming the nominee, expected after Thanksgiving, is now all but a foregone conclusion.

As for the market, gains are fairly widespread among the various sectors. A bounce in oil prices seems to be giving energy-related stocks, such as Dow component Chevron (CVX - Free Chevron Stock Report) and recent IPO Sanchez Energy (SN) a lift. Word yesterday that petroleum product demand was better than usual for this time of year may be supporting the uptick in crude oil quotations.

Financial stocks are participating in the rally, as well, with shares of banking giant and Dow component JPMorgan Chase (JPM -Free JPMorgan Stock Report) among the winners.  

General Motors (GM) shares are having a good day, too, as the government has given word that it aims to sell its stake in the automaker by yearend if conditions allow. That would give the car company more freedom to make decisions regarding its use of capital, potentially rewarding shareholders more.

On the down side, shares of certain retailers are having a tough time of it, after issuing lower-than-expected profit reports and/or weak guidance. Those include Target (TGT), Dollar Tree (DLTR), and Buckle (BKE).

Still, heading into afternoon trading, stocks are near their best levels of the session, with the Dow just shy of the 16,000 level. -Robert Mitkowski


At the time this article was written, the author did not have a position in any of the companies mentioned.

-

Stocks to Watch from The SurveyOctober-period earnings reports continue to flow in, many from retailers with fiscal years that end in January. The news was not particularly good, and retailers of various stripes (big box, department store, discount, specialty), including Target (TGT), Sears Holdings (SHLD), Dollar Tree (DLTR), GameStop (GME), and Abercrombie & Fitch (ANF), are seeing their shares move lower in pre-market trading as a result. There were pockets of good news, however, and shares of home goods retailer Williams-Sonoma (WSM), restaurant operator Jack in the Box (JACK), and coffee company Green Mountain (GMCR) are all moving higher ahead of the bell 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.

Before The Bell - Blame it on the Fed. At least that seems to be a logical explanation for yesterday's modest setback in the equity market. Of note, after Wall Street had opened the session higher, then subsequently stumbled modestly in mid-morning, the indexes rallied again into the lunch hour and a bit beyond.

But at 2:00 PM (EST), the Federal Reserve released the minutes to its October 29th and 30th FOMC meeting, and the reception on Wall Street was not good. In fact, stocks, which held modest gains at the time, quickly saw those increases dissipate in a matter of minutes, falling to session lows in the first half hour after the aforementioned Fed issuance. At its nadir, the 30-stock Dow Jones Industrial Average was off by about 100 points.

What spooked investors, it would seem, was the suggestion that the lead bank could opt to slow down its rate of asset purchases as early as the next FOMC meeting in December. Heretofore, the guessing had been that the Fed might go well into 2014 before shifting gears even slightly. Of course, a lot can happen between now and mid-December when the bank meets again.

In truth, such a suggestion does not mean that the Fed will actually move next month. Our sense, in fact, continues to be that it will await further economic data before acting. Whatever the actual course turns out to be, even this vague suggestion was enough to pressure the still-emboldened bulls throughout the remainder of the afternoon.

All told, after posting an early gain in the Dow Jones Industrial Average of almost 50 points, the Dow, as noted, fell back to a loss of about a hundred points, for a peak-to-trough swing of some 150 points. A similar course was followed by the Standard and Poor's 500 Index. Meanwhile, neither of these twin indexes was able to post another all-time record high. Still, the Dow did ascend the 16,000 mark once again, while the S&P just missed topping the 1,800 level as it had on Monday. 

Was this an overreaction? Perhaps, but it also is true that the stock market is pricey and notably overbought. Of course, as we have opined for some months now, markets can stay overvalued for long stretched of time, just as they can remain notably undervalued for lengthy periods as they did in the historic bear market of 2007-2009.

Overall, it was an unsatisfying day for the bulls, but not an uneventful one for the equity market, as we saw a trio of closely watched reports issued during the morning. Specifically, the government released data showing a modest, but better than expected, increase in retail sales for October. Specifically, this metric rose by 0.4% last month, easily eclipsing the nominal gain forecast. At the same time, the U.S. Labor Department reported that consumer prices dipped by 0.1% in October; a flat reading had been the consensus forecast. Then, some 90 minutes later, and a half hour into the trading day, the National Association of Realtors released its report on sales of existing homes for October. That survey showed a modest retreat in such transactions last month. However, the level of housing activity remained fairly brisk.

However, those reports did little to sway investors, we sense, and it was the Fed, in the end, that held court and helped to push stocks lower. In all, by the close of the day, the Dow was off 66 points; the S&P was six points lower; and the NASDAQ, once up nicely on the day, had closed down by 10 points, for a peak-to-trough swing of some 40 points.     

Now, a new day dawns, and the markets will be influenced by some activity in the retail sector, as a number of such companies are now in the midst of reporting their October-quarter results. Of note here, the giant retailer Target (TGT) issued less-than-compelling data and that stock is indicated to open the day lower. However, for the market as a whole, the futures are pointing nicely higher with less than an hour to go before the start of the new trading day, with the S&P 500 Index futures up almost six point and the NASDAQ futures in the black by some 14 points. Thus, it would seem, that another run at Dow 16,000 is possibly ahead today. We shall see. Stay tuned.   - Harvey S. Katz   

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