After The Close - It was a rollercoaster ride for investors today. The major U.S. equity indexes began the new trading week to the upside, with the Dow Jones Industrial Average up in triple digits within the first few minutes of the session, but shortly thereafter the good feelings began to dissipate, with most of the major averages led lower by the volatile NASDAQ. The Dow Jones Industrial Average witnessed a more than 180-point swing during the volatile session, but in the end was able to regroup and push closer to its intraday high by the closing bell. The S&P 500 Index struggled to find its equilibrium for most of the session, but also rallied nicely in the final 90 minutes of the trading day. Even the NASDAQ managed to work its way back into positive territory for a time, before ending up near the neutral line by the final bell, which is no small feat given that it was at one point down 78 points. We even saw impressive rallies in the small- and mid-cap markets, with the small-cap Russell 2000 and the S&P Mid-Cap 400 erasing most of their earlier losses by the close.

We think the confluence of both negative and positive news is responsible for today’s pronounced and swift swings in the direction of trading. Investors were pleased to see the increased merger and acquisition activity in Corporate America, including Pfizer’s (PFE - Free Pfizer Stock Report) blockbuster offer to acquire industry peer AstraZeneca (AZN), and also pleasantly surprised by the better-than-expected housing market news this morning. On the other hand, growing fears about the escalating geopolitical tensions in Eastern Europe, and the potential negative impact they could have on the world financial and equities markets, remains a headwind for investors. Just this morning, the U.S. unveiled the scope of the additional economic sanctions it has placed on Russia and many of its most prominent companies. And all this comes against the backdrop of a mixed earnings season, which we think, in itself, is a big reason why the market’s susceptible to wide swings in the direction of trading. That said…

Today’s session seemed to be all about sector rotation. Despite the late-day rally by the bulls, there still seemed to be some “flight to safety” in play, with the healthcare, consumer staples, and telecom stocks in demand throughout the session. The defensive utilities sector did not fare quite as well as the aforementioned groups, but investors should note that utilities stocks were the big winners last week. Conversely, today’s biggest laggards were the more economically sensitive. In particular, basic materials and financial groups were weaker, and the industrial and consumer discretionary sectors did not move into positive territory until very late in the session. We would not be surprised if it turned out to be a volatile week for the economically sensitive groups, as there will be no shortage of economic data, beginning with tomorrow’s report on consumer confidence and concluding with Friday’s much-anticipated data on both employment and unemployment for the month of April.

Meantime, some of the big name companies that reported less-than-impressive quarterly results and/or guidance last week once again felt the wrath of the investment community. Investors unloaded shares of Amazon.com (AMZN), Facebook (FB), and Netflix (NFLX) during today’s seesaw session. The same could not be said for fellow technology behemoth Apple (AAPL), which once again has become a darling of the investment community with its stock pushing closer to the $600-a-share mark. Investors were pleased with the company’s decision to buy back shares and increase its dividend. Looking ahead to the remainder of the week, investors will be keeping a close eye on the energy sector, with Dow-30 components and oil giants Exxon Mobil (XOM - Free Exxon Stock Report) and Chevron (CVX - Free Chevron Stock Report) scheduled to release their latest quarterly results toward the end of this week. - William Ferguson

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


12:30 PM EDT - The U.S. stock market is putting in a choppy, and now somewhat weaker, session today. At just past noon in New York, the Dow Jones Industrial Average is up 51 points; but, the broader S&P 500 Index is now off slightly; and, the NASDAQ is down 30 points. Market breadth suggests a mixed tone to the day, as winning stocks are just about even with losers on the NYSE. However, these figures are quite weak on the NASDAQ. The market sectors are somewhat divided, too. The healthcare group is showing some leadership, probably due to acquisition-related news. Further, there is some strength in the consumer area. However, the basic materials issues are trading lower, and the financials are off, as well.

Technically, after Friday’s decline, the S&P 500 Index is back near its 50-day moving average, located at about 1,860. Hopefully for the bulls, the broad-based index can find support at this level. Meanwhile, the NASDAQ, which has been underperforming the other averages, remains an area of concern. Some strength here would be encouraging. The VIX is up about 4%, to 14.64, today, suggesting that sentiment is also deteriorating.

There was just one notable economic report released this morning. Specifically, pending home sales rose 3.4% in March, which was quite a bit better than had been expected. This may have some analysts speculating that the housing market will pick up during the normally brisk spring/summer season. Meanwhile, it will be an important week for economic news, as the monthly employment report for April is due out Friday morning.

Elsewhere, the corporate reports continue to stream in. On point, we heard from National Oilwell Varco (NOV). That issue is trading lower, after the energy giant issued a mixed release. Corning (GLW) stock is now off slightly, too, even though that company put out healthy figures. Meanwhile, some M&A news may have helped the markets earlier. Specifically, Pfizer (PFE - Free Pfizer Stock Report) has announced its intent to merge with AstraZeneca (AZN). Both stocks are up today. - Adam Rosner

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 It was a busy weekend on the M&A front. One deal that looked to be in the works now appears to be over, as precious metals company Newmont Mining (NEM) has stopped on again, off again merger talks with industry peer Barrick Gold (ABX). Consequently, NEM stock is down moderately ahead of the bell, while ABX shares are little changed. Elsewhere, drugmaker Pfizer (PFEFree Pfizer Stock Report) appears to be growing increasingly aggressive in its pursuit of rival AstraZeneca (AZN), upping its bid to nearly $100 billion in cash and stock. As a result, AZN is soaring in the premarket, while PFE is indicating s slightly higher opening. Staying the pharmaceutical space, shares of Mylan (MYL) are down modestly in pre-market trading, after its sweetened takeover bid for fellow generic drugmaker Meda AB was rejected. Too, Forest Laboratories (FRX) has struck a deal to acquire industry peer Furiex Pharmaceuticals for roughly $1.1 billion in cash. Finally, convenience store operator Susser Holdings (SUSS) has agreed to be acquired by pipeline operator Energy Transfer Partners (ETP) for about $1.8 billion in cash and stock, causing SUSS stock to surge in the premarket.

Turning to earnings, investors appeared pleased with quarterly financials from glass manufacturer Corning Inc. (GLW) and pipeline operator Boardwalk Pipeline Partners (BWP), as both stocks are indicating slightly higher openings this morning. Conversely, Wall Street took issued with quarterly releases from education services provider New Oriental Education & Technology Group (EDU), Internet company Sohu.com (SOHU), and oilfield services provider National Oilwell Varco (NOV). These three equities are moving lower ahead of the bell, in response. – 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 - Escalating concerns about the spreading European crisis involving Russia, Ukraine, much of Western Europe, and the United States along with some notable disappointments on the earnings front combined to take the measure of the U.S. stock market on Friday. In all, the market, which had started the week moderately to the upside, then largely marked time on Wednesday and Thursday, fell sharply to close out the week.

In truth, while there were some profit disappointments along the way, and a few sizable selloffs of individual stocks, most notably on the tech-heavy NASDAQ, where shares of Amazon.com (AMZN), the online retailer, fell almost 10%, the major influence on the day's action on our shores was renewed tensions between Russia and Ukraine. The deteriorating situation in that troubled part of the world creates uncertainty and that is rarely good for stocks--especially going into a weekend when all sorts of events can transpire. Of note, on this score, Russia's central bank has lifted its key lending rate from 7.0% to 7.5%, while a leading ratings agency in our country has cut Russia's credit rating and kept its outlook negative. In response, Europe's principal bourses all closed lower on Friday, led down the bearish path by Germany's DAX.

As to U.S. corporate news, the majority of companies have outperformed their modest, and often lowered, quarterly targets over the past fortnight. And some stocks have responded well to such curative action, rising notably in recent days. However, there also have been some celebrated revenue and/or earnings misses, most recently Dow Jones Industrial Average component Visa (V - Free Visa Stock Report), the credit card services provider. That stock fell about 4%, as quarterly revenues came in short of expectations and the company cautioned about the top line going forward. These individual disappointments only added to the day's bearishness, but were not the primary cause. That honor, as noted, goes to Eastern Europe.

Also, the stock market, following its late-March, early April swoon, may have gotten ahead of itself once again. Indeed, valuations, which had not come down all that much during the early spring market pullback were even a bit richer before Friday. Our sense is that some correction is possibly ahead, although we also believe that barring some unforeseen monetary, economic, or global reversals, the bull market should stay intact in the coming months.  Meanwhile, Friday's action, as noted, was decidedly bearish, with the Dow losing 140 points, the Standard and Poor's 500 Index easing 15 points, and the NASDAQ, tumbling by 73 points, or 1.8%. The S&P Mid-Cap 400 and the small-cap Russell 2000, like the NASDAQ, also underperformed the Dow and the S&P 500, in particular the Russell, which tumbled 1.9%. It was a difficult day for those long equities, and suggests that some near-term caution might be in order as we look ahead to a new week.

As for the week ahead, it will be filled with not only additional quarterly earnings, but some high-profile economic releases, led off by data on consumer confidence, which will be out tomorrow. Then, Wednesday will bring the initial look at the first-quarter gross domestic product, where a tepid gain of 1.0% is now the consensus view. That day also will bring the monthly report on personal income and consumer spending, a survey on manufacturing in the greater Chicago area, and a private-sector payroll report. That will be followed up on Thursday by jobless claims figures for the latest week and the monthly survey (for April) on manufacturing activity across the country. Finally, on Friday, the Labor Department will report on the status of the employment sector for April. That issuance, the most closely watched of the week, can be a market moving release.

Meantime, looking ahead to this morning's market opening, we note that stocks in Asia were mostly lower overnight, on fears about Eastern Europe, but equities are coming back in Europe, where the Frankfurt DAX and the Paris CAC-40 are leading the way higher. Here, moreover, the futures are likewise pointing nicely higher, presaging a notably better opening when trading gets under way in less than an hour from now. Of note on our shores, the on again, off again merger discussions between Barrick Gold (ABX) and Newmont Mining (NEM) seem to be off again, at this time. This long-running soap opera has been in place for some two decades, with the latest wrinkle leading to an early lower indication for Newmont shares this morning. - Harvey S. Katz   

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