After The Close - The U.S. stock market moved higher this morning, pulled back briefly in the afternoon, but finished the day with a decent advance. At the end of the session, the Dow Jones Industrial Average was up 25 points; the broader S&P 500 Index ended up four points; and the technology-heavy NASDAQ finished higher by 27 points. Market breadth was favorable, as advancing issues outnumbered decliners by an almost two-to-one margin on the NYSE. Most of the market sectors made progress. There were sizable gains in the technology sector, helped by large advances in the computer hardware stocks. The financial names also put in a strong showing, with leadership in the real-estate related issues. However, the energy sector was quite weak, with sharp declines in the equipment names. Further, the utilities headed lower, with losses across that sector.

Technically, the market remains quite strong, with the averages hitting major milestones almost daily. Notably, the S&P 500 Index continues to trade above the 1,800 level, while the Dow is now just under 16,100, and the NASDAQ has managed to move through the widely-watched 4,000 level. Sentiment remains strong, as the VIX is still at very low levels. While many traders have suggested that the market is getting overbought, and some consolidation may be needed, for now it seems that the stock market rally may remain intact at least through the holidays.

Meantime, traders received numerous economic releases today. Specifically, the weekly initial jobless claims moved lower, suggesting an improved employment situation. The University of Michigan’s Consumer Sentiment Survey for November came in with a final reading that was a bit better than expected. Also, the Conference Board’s report of leading economic indicators for October showed progress. Meanwhile, durable orders slipped a bit in October, but the decline was largely expected. There are no reports due out for the rest of the week, as the Thanksgiving holiday starts up.

In the corporate sector, there was some news worth mentioning. Notably, Hewlett-Packard (HPQ) stock traded sharply higher, after the computer hardware giant posted better-than-expected results. For some perspective, that issue, which is now at above $27.00, has come well off its 52-week low of about $12.22 a share. The news likely helped boost other members in the technology sector. - 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 - Wall Street is in a good mood ahead of tomorrow’s Thanksgiving Day holiday, with stocks rising modestly following a slew of economic data. Right around noontime on the East Coast, the Dow Jones Industrial Average is up 27 points and the NASDAQ is ahead by 18 points, or proportionately better than the Dow. Market breadth confirms the advance, with gainers topping decliners by a clear-cut margin on the New York Stock Exchange.

The data points came in hot and heavy this morning, from a positive weekly initial unemployment claims figure, and better-than-expected numbers regarding the leading indicators, the Chicago PMI, and the University of Michigan consumer sentiment index. A report on durable-goods orders was only about in line with expectations, though. True, some of the data pointed to less strength than the prior month, but topping expectations is often the trump card.

In the same vein, a report showing better-than-forecast revenues from Hewlett-Packard (HPQ) is providing broad support for the technology sector. The news is a breath of fresh air for the tech group after disappointing revenue trends were recently indicated at IBM (IBM - Free IBM Stock Report) and Cisco Systems (CSCO - Free Cisco Stock Report). HPQ stock is up sharply on heavy volume, on the feeling that the turnaround being engineered there is producing results.

Not faring as well are the shares of many energy-related companies. The American Petroleum Institute reported a jump in crude-oil inventories, which is pressuring quotations for "black gold". That is taking a toll on the stocks of services provider Schlumberger (SLB) and driller Anadarko (APC).

Refining stocks, such as Valero Energy (VLO) are benefiting from lower oil prices, though. It may take a while for the drop in oil prices to filter through to gasoline prices, which are higher than a week earlier, at $3.29 a gallon versus $3.21, according to AAA. Still, the latest figure is less than the year-earlier $3.42, for holiday travelers.

Another lagging sector is the interest-rate sensitive utilities group. The positive bias to the morning’s economic data has pushed up the yield on the 10-year Treasury note to 2.76%, from 2.71%, pressuring bond prices and the shares of power companies, such as Dominion Resources (D).

Moreover, the yield on the typical 30-year mortgage is up to 4.29%, from 4.22% last week, although rates are still excellent for those looking to buy a home. A year ago, the average rate on a 30-year loan was 3.32%, according to government agency Freddie Mac.

Afternoon trading is likely to be light ahead of tomorrow’s holiday.   - 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 Survey– Corporate news is fairly light ahead of the Thanksgiving holiday, but there are a few companies in the spotlight this morning. Computer giant and former Dow-30 member Hewlett-Packard (HPQ) has reported fiscal fourth-quarter results that pleased investors, and the stock is trading nicely higher in the premarket. Also, Zale Corp. (ZLC), a leading retailer of diamond and other jewelry products in North America, has reported fiscal first-quarter results that bested Wall Street’s expectations. That issue is up in early morning trading, as well. – Kathryn M. Drew

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 overcame some initial sloppiness yesterday to close out the penultimate trading session before Thanksgiving on a mostly higher note, although some late selling did pare what had been more formidable mid-afternoon gains. To wit, both the Dow Jones Industrial Average and the Standard and Poor's 500 Index inched ahead to all-time closing highs, albeit just nominally, while the tech-laden NASDAQ closed above 4,000 for the first time since September of 2000, or before the dot.com bubble burst and that composite subsequently plummeted.

Encouragingly, there was some welcome group rotation in the session, as the small-cap Russell 2000 Index, a notable laggard in recent days, led the advance with a 10-point gain, while the Standard and Poor's Mid-Cap 400 Index overcame early weakness to end the day slightly to the plus side. All in all, it was another constructive session for the bulls, though materially less so than it had been earlier in the afternoon.

As to leading influences on the day, the economy had it both ways, as the Conference Board issued its monthly survey on consumer confidence, and that release showed a further modest retreat, which was in line with expectations. Conversely, the U.S. government released data on building permits, but not yet the companion data on housing starts. This latter report, which is still being affected by the earlier partial government shutdown, now has been pushed back to next week. Meantime, the permits report was a dazzler, with that key leading indicator for the housing market jumping to a five-year high in October. This issuance suggests that the U.S. residential real-estate market is gaining momentum as we approach a new year. In all, permits rose to an annualized rate of 1.03 million units, up 6.2% from September, and the highest total since June of 2008, when this nation was in the midst of a deep recession and a historic bear market in housing.

Overall, though, such issuances probably did not have a major impact on stock market behavior in the latest session, nor did some mixed metrics on the quarterly corporate profit front. Our sense continues to be that it is still the Federal Reserve and the outlook for monetary policy that is controlling the agenda. On point, the lead bank is due to hold its next Federal Open Market Committee meeting on December 17th and 18th. At that time, the Fed will possibly opt to start its long-awaited monetary tapering, specifically, a slowing down of the rate of asset purchases that it undertakes each month. We think there is about an even chance that such a shift will be adopted at such time. We think some discounting of such an event is already in the equity market, assuming it is a very modest move. Any surprise on that front could have a greater effect on this clearly extended bull market.

As to other items, we are now in a seasonally strong period for Wall Street, with stocks often doing quite well just before and after the Thanksgiving break. In fact, even though the bull market is long in the tooth and valuations are now frothy, there is a chance, assuming the central bank cooperates, that we will yet get a Santa Claus rally. In addition to the Fed, we also will need to keep an eye on holiday shopping. A good Christmas selling season, which is by no means assured, at this point, would be a boon to the equity market as well, we think, as it would suggest that the economic recovery should extend itself into 2014. For now, we believe that GDP growth will approximate 2.0%-2.5% in the current quarter and then hold at the top of that range, on average, for the full 12 months, with quarterly gains nearing 3% by the end of next year.

Looking ahead to the new day, we find that markets overseas are tracking higher, in part on upbeat consumer confidence data issued in Germany. And on our shore, a better-than-expected top- and bottom-line issuance from computer maker Hewlett-Packard (HPQ) after the close of trading yesterday is giving our futures a modest lift with a little less than an hour to go before the start of the new trading day. So we may, indeed, see the historical pattern of a rising market before Thanksgiving weaves its way out. 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.