After The Close - The final trading week of February—a month that so far has been very good to investor’s long equities—got off to a great start. The major market averages were up sharply early on in today’s session and went on to carry a good portion of those gains to the closing bell. When all was said and done, the Dow Jones Industrials, the NASDAQ, and the S&P 500 Index had added 106, 30, and 11 points, respectively, with the latter index setting a new all-time high. Trading was broadbased, with the mid- and small-cap averages up decently, as well. Advancing issues led decliners by nearly two to one on both the Big Board.

The strong performance thus far in February has helped investors, for the most part, retrace the damage done in January. As noted, the broader S&P 500 Index hit a new all-time high today, and 2014 has been good to those invested in the NASDAQ, with the technology heavy composite up more than 3% since the start of the new year. The Dow Jones Industrial Average has not recouped all of the losses suffered in January, but the index of 30 bellwether companies has been, for the most part, on a steady climb this month. Two Dow-30 components that fared well among many today were Nike (NKE - Free Nike Stock Report) and UnitedHealth Group (UNF - Free UnitedHealth Group Stock Report). The stock of the healthcare giant was helped by reports that the government’s cuts to Medicare were smaller than expected initially. That news boosted the stocks of several healthcare providers in the latest session. Some good news from Pfizer (PFE - Free Pfizer Stock Report), noted here in our earlier stock market commentary, also gave a boost to the healthcare sector.

Also helping equities was continued sentiment on Wall Street and among many economists that the latest uninspiring batch of economic data, including last week’s disappointing reports on building construction and residential re-sales, were hurt by severe weather conditions that have blanketed much of the country over the better part of the last two months. More clarity on this situation will probably come later this week when Federal Reserve Chair Janet Yellen speaks to the Senate Banking Committee in her semi-annual testimony about monetary policy. Investors will be paying close attention to what Ms. Yellen will say on Thursday for more clues as to how the central bank might handle the ongoing bond-buying tapering and the current historically low (near zero) federal funds rate.

Our sense is that some recent merger and acquisition (M&A) activity in Corporate America is also being viewed positively by Wall Street—and helping equities. Many investors see such activity as a constructive sign for continued market strength. On the heels of last week’s big acquisition announcement from Facebook (FB), we learned today that RF Micro Devices (RFMD) has agreed to buy TriQuint Semiconductor (TQNT) and that Men’s Wearhouse (MW) has upped its offer for Jos. A. Bank Clothiers (JOSB). In a non-merger story, Samsung Electronics has unveiled the latest version of its Samsung Galaxy model. The S5 version is expected to compete with Apple’s (AAPL) iPhone, which is expected to be made public later this year. Meantime, activist billionaire investor Carl Icahn is back in the news, publicly urging eBay (EBAY) to spin off its PayPal business. Shares of the e-commerce company traded higher.

Turning back to today’s market data, there was much to like from a sector perspective, with most of the 10 major groups finishing the session in positive territory. The only lackluster performances of note came from the basic materials and utilities issues, with the latter group finishing slightly in the red. Conversely, there was leadership from the energy, industrial, and consumer discretionary and staples sectors. The energy stocks, in particular shares of the oil and gas exploration companies, performed very well today.  -William G. Ferguson

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


12:15 PM EST - The U.S. stock market got off to a strong start this morning, and has been able to hold, and even extend these gains. At just past noon in New York, the Dow Jones Industrial Average is ahead 192 points; the broader S&P 500 Index is up 22 points; and the technology-heavy NASDAQ is higher by 47 points. Market breadth is quite favorable, with advancing stocks outweighing decliners by about three to one on the NYSE. All of the market sectors are in positive territory, too. There is leadership in the energy area, as the shares of the major producers and distributors are up sharply. The industrials are large gainers, helped by the aerospace and defense names. Elsewhere, the basic materials sector, while higher, is a relative underperformer, owing to weakness in select metals issues.

Technically, the stock market is showing some strength today. Notably, the S&P 500 Index, after moving sideways for a few days is breaking out into new 52-week high ground. For the bulls, it will be important to keep the index at this level. Some additional follow-through over the next few days would further confirm the move up, as well. Meanwhile, the VIX is lower, to about 14.13, today, suggesting that sentiment is supportive.

Investors received no major economic reports today. However, tomorrow, we get a look at the Conference Board’s consumer confidence report for the month of February.

In corporate news, there are a few items worth noting. Shares of Pfizer (PFE) are trading higher, after pharmaceutical giant announced some favorable drug-related news. Shares of Palo Alto Networks (PANW) are up, too, as that company issued decent quarterly results. - Adam Rosner

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


11:10 AM EST - The bulls continue to be in charge down on Wall Street. Indeed, after a comparatively modest amount of selling in January, the stock market has come roaring back, with the sharp early gains to begin the concluding week of February just more icing on the cake.

Specifically, after less than two hours of trading, the Dow Jones Industrial Average is ahead 140 points; the Standard and Poor's 500 Index is ahead by 17 points  (and scoring an all-time high in the process), and the NASDAQ is better by 38 points. That index, too, is now in new high ground, but for the past 52 weeks, as we are still some 800 points from a record high on this tech-laden index.    

Advancing issues also are well ahead of declining stocks. Benign comments from Federal Reserve officials and lessening concerns about the emerging markets appear to be behind the continuing support for the market. It seems that the recent run of less-than-stellar economic news is being taken with the proverbial grain of salt, as weather-related factors, not underlying weakness, look to be the major cause.

Thus, as we near the midday hours, the market has anything but the Monday blues.   - Harvey S. Katz

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


Stocks to Watch from The Survey There is a bit of M&A activity to be aware of this morning. Indeed, shares of semiconductor maker TriQuint (TQNT) and radio frequency components and systems manufacturer RF Micro Devices (RFMD) are both surging in the premarket, after the two companies agreed to merge in an all-stock deal. Elsewhere, the saga between menswear retailers The Men’s Wearhouse (MW) and Joseph A. Bank (JOSB) has heated up once again, with MW increasing its bid for JOSB to $63.50 a share, from its previous offer of $57.50. Both stocks are moving nicely higher ahead of the bell, as a result.  

In other news, digital video services provider Netflix (NFLX) has agreed to pay cable company Comcast (CMCSA) to ensure that its content streams smoothly to subscribers using Comcast’s broadband Internet services. Both stocks are moving slightly higher in pre-market trading on news of this unprecedented deal. Finally, BlackBerry (BBRY) stock is up in the premarket on news that the smartphone developer will make its BBM messaging service available on Windows Phone and Nokia X platforms. – 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 bulls and bears were locked in a standoff for much of the concluding day of last week's holiday shortened four-day span, with the former winning the first half of the day and the latter holding a narrow edge throughout the latter part of the session, though a modicum of late buying gave brief hope that the bulls would get the nod. But by the close, the principal larger-cap averages wound up in the red, albeit modestly, with Dow Jones Industrial Average off 30 points, the Standard and Poor's 500 Index down four points, and the NASDAQ also lower by four points. But the small-and mid-cap indexes did proportionately better, with the Russell 2000 adding four points, while advancing issues bested decliners on the Big Board. This essentially neutral showing for the day largely reflected the ability of traders to again climb the proverbial wall of worry, as one economic report after another continues to point to evolving weakness in the current quarter, following a spirited business advance during last year's final half. 

On point, the latest worrisome news came in the form of a lackluster report on sales of existing homes in January, with that metric retreating by 5% for the month. However, the apparent weather-related nature of the miss mollified investors once again. The seeming rationale is that once the winter and its multiple storms pass through and spring arrives, the leading economic sectors will play catch up. That would mean markedly better performances on the industrial, consumer, and housing fronts. The latest week, which saw, in addition to this weak existing home sales performance, an even sharper retreat in homebuilding and a dampening in builder confidence. Such data, along with weaknesses in industrial production, retail spending and auto sales are being blamed on the weather, with a sense evolving that growth in the current three months will slide back to less than 2%, from 3.2% in the fourth quarter of 2013. The likelihood of a solid comeback in the second quarter and a further pickup after midyear is seemingly behind the market's ability to look past these sobering trends. 

Meanwhile, not all the news is bad, as earnings have come in on target, or a little above that in recent weeks, while interest rates are holding at attractively low levels, at least for those on the borrowing end. However, for those in fixed income, or who are seeking added income from savings, the low rates are distressing. And the Federal Reserve seems in no hurry to raise them anytime soon. Such an approach is good news for equity investors, but is not a happy event for income seekers.

Now, as new week is about to begin, and the news from Asia overnight was not good, as stocks in that region took it on the chin overnight due to fears of a worsening credit bubble in China. However, stocks on our shores are not participating in this downturn, as the Standard and Poor's 500 Index futures are ahead by more than five points, while the NASDAQ futures are up by better than 13 points. As such, a stronger opening seems ahead when traders get down to business in less than an hour from now.

Finally, on the economy, Fed Chair Janet Yellen is schedule to testify before the Senate Banking Committee on Thursday, and the markets likely will be looking for comments on the emerging markets and monetary policy, especially as it relates to interest rates as Wall Street seems anxious to learn of just when the Fed will start to finally raise borrowing costs. There seems to be some division of thinking on the central bank as it pertains to this issue.

Then, there are the data issuances. The calendar is light this morning, but the rest of the week has a good mix of surveys, starting with the monthly report on consumer confidence tomorrow, the continuing with releases on new home sales on Wednesday, durable goods orders and jobless claims on Thursday, and revised fourth-quarter GDP figures on Friday. - Harvey S. Katz

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