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After the Close - The U.S. stock market moved higher this morning, but ended the session with modest gains. At the close of the day, the Dow Jones Industrial Average was up five points; the broader S&P 500 Index was ahead three points; and the technology-heavy NASDAQ closed up six points. Nonetheless, market breadth suggested a mixed, to negative, bias to today’s session, as declining issues were about even with advancers on the NYSE and on the NASDAQ. Moreover, the major market sectors were also divided. There were advances in the basic materials group, as the precious metals and coal names moved higher. The financials also made some progress today, helped by the real estate related issues. In contrast, the utilities slipped a bit, and the energy stocks lost some ground, as the pipeline companies were weak again.

Technically, the market rebounded sharply on Friday, following November’s encouraging employment report. That move put the S&P 500 Index back above 1,800. While we did not see those gains extended sharply today, the fact that the broad Index managed to stay above that level today was encouraging. Nonetheless, the mood seemed a bit non-committal, as the VIX moved modestly higher today, but settled lower. It is important to note that the market has logged some impressive gains over the past several months, and while stocks have not pulled back much, traders may be fatigued and in need of a catalyst to push shares higher. Possibly, some positive news concerning the nation’s budget, or a strong fourth-quarter earnings season, including healthy year-ahead guidance, might help in this regard.

Meantime, there were no notable economic releases issued this morning. A lack of news often leaves traders in an information vacuum, and that may be contributing to today’s mixed tone. The news will be light tomorrow, too. However, a wholesale inventories report for October is due out. Meanwhile, the pace picks up dramatically later in the week.

In the corporate arena, things were also quiet. In apparel, PVH (PVH) is slated to issue results after the close today, and that stock was off a bit today. Meanwhile, food distributor Sysco (SYY) stock jumped today on recently announced news that it plans to buy privately-held US Foods. - 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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12:15 PM EST - The major stock market averages are modestly higher today following Friday’s big run-up. Right around the noon hour on the East Coast, the Dow Jones Industrial Average and the NASDAQ are in the plus column by 21 points and eight points, but the broader market is a bit mixed. The number of advancing stocks is outpacing decliners by a small margin on the New York Stock Exchange, although the reverse is true on the NASDAQ.

Even though stocks finished moderately lower for the first week of December, the turnaround in sentiment on Friday was notable in that it marked a shift in investor psychology. The fear that the Federal Reserve would begin tapering its securities purchases was replaced by enthusiasm toward the strength of the economic recovery, evidenced by a surprisingly good November employment report from the Labor Department.

Helping sentiment this morning was news of a merger between Sysco Corp. (SYY) and US Foods. Sysco is buying the food supplier for $3.5 billion, exclusive of debt, from two private-equity firms. The thinking appears to be that this is an excellent fit and there will be plenty of opportunities to achieve more efficient operations in the combined company. Sysco stock is the star of the day, up sharply in heavy volume.

In terms of sectors, one broad theme today seems to be the feeling that a stronger economy will reduce investor interest in high-dividend-paying utilities. Shares of utilities, including those of American Electric Power (AEP) are broadly lower as a result.

Another group of stocks under some pressure is that of mainly oil-producing companies, such as Continental Resources (CLR). The thinking seems to be that oil prices may eventually pull back somewhat as inventories build. Conversely, the shares of petroleum refiners that buy oil, like Tesoro Energy (TSO) are trading to the upside.

Companies in the news include coal miner Alpha Natural Resources (ANR), which announced the sale of its stake in natural gas wells in Pennsylvania for $300 million in stock and cash. Alpha Natural shares are up nicely as a result.

Elsewhere, fast-food giant and Dow-30 McDonald’s (MCD - Free McDonald's Stock Report) component reported unexciting same-store sales for the month of November.  McDonald’s stock is off somewhat on that data point.
Heading into afternoon trading, stocks are holding onto their modest advance. Robert Mitkowski

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

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Stocks to Watch from The SurveyEarnings news is quite light this morning, although several companies are scheduled to report quarterly results after the market closes today. Meanwhile, investors are buzzing about Sysco’s (SYY) decision to purchase fellow food distributor US Foods for $3.5 billion in cash and stock (including the assumption of debt, the deal is valued at roughly $8.2 billion). The transaction would create a powerhouse in the food distribution space and is expected to increase Sysco’s annual sales some 46%, to $65 billion. SYY stock is surging ahead of the bell as a result. Similarly, dairy products company WhiteWave Foods (WWAV) has agreed to purchase privately held organic produce company Earthbound Farm for $600 million, and WWAV stock is indicating a modestly higher opening this morning in response. Elsewhere, shares of McDonald’s (MCDFree McDonald’s Stock Report) are down slightly in pre-market trading, after the restaurant operator reported generally lackluster November sales figures. – 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 - A strong showing by equities last Friday on the strength of a better-than-expected report from the Labor Department pushed the major stock averages notably higher. The buying was broad based, with each of the 10 major sectors finishing in positive territory. Technology stocks, though, were the relative underperformers in the last session, with mild weakness in the shares of industry giant Apple (AAPL) likely not helping the cause for the group.

The strong conclusion last week also ended a five-day losing streak on Wall Street. The upward movement, which once again pushed the Dow Jones Industrial average and the broader S&P 500 Index above their respective psychologically significant levels of 16,000 and 1,800, was also noteworthy as it was on good economic news. In prior sessions, good news on the economy, which has been commonplace over the last fortnight, prompted some selling in an overbought market, as investors feared that it would probably push the central bank to begin tapering its accommodative bond-buying program.

The latest encouraging labor report—the nation added 203,000 new jobs last month and the unemployment rate fell from 7.3% to 7.0%--raised hopes in the investment community that the economy may be on solid enough footing to withstand a partial reduction in the Federal Reserve’s monthly asset purchases. This accommodative monetary policy has supported the stock market in recent years as the economy has gradually recovered from the last recession. This week, the economic beat will be rather quiet, with the only notable reports coming late in the week when we get monthly data on retail sales (Thursday) and producer (wholesale) prices (Friday).

Speaking of retail sales, we expect the eyes of investors to remain focused on the consumer sector, looking for more clues as to how the all-important holiday shopping season is progressing. To date, the sentiment—and accompanying data—suggest that business at the big retailers is no better than decent. Such sentiment and a plethora of October quarterly reports from retailers in recent days has made for some volatile trading of retail stocks.

Looking ahead, the next few sessions could witness some lower trading volume, as there is not much economic or corporate news—at least with regard to earnings—expected to be released during the early part of this week. We would also not be surprised if investors were a bit hesitant to make any significant moves ahead of the commencement of the Federal Reserve’s two-day monetary policy meeting next Tuesday.

Elsewhere, Asia’s major equity indexes were up sharply overnight, while most of the major European bourses are modestly higher as trading enters the second half of the day on the Continent. Pushing international equities higher are the aforementioned encouraging data on the U.S. labor market and better-than-expected trade data from China. Investors viewed the latter report, which showed a pickup in exports from China, as a sign of stronger demand from the global economy. Investors may want to keep an eye on crude prices and the oil stocks, as the increase in China’s trade and encouraging data on U.S. manufacturing activity last week may boost interest in the economically sensitive sector.

Meanwhile, with less than an hour to go before the commencement of trading on these shores, the U.S. equity futures are presaging a modestly higher opening for our major equity indexes. Stay tuned.   - William G. Ferguson

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