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After The Close - The U.S. stock market traded lower this morning, reversed course and moved into positive territory at midday, only to decline again in the afternoon. At the close of the session, the Dow Jones Industrial Average was off 50 points; the S&P 500 Index was down 14 points; and the NASDAQ was lower by 42 points. Most stocks lost ground today, as decliners outnumbered advancers by more than two to one on the NYSE. All of the widely followed equity sectors finished in negative territory, with pronounced losses in the healthcare, energy, and basic materials issues. While still lower, the technology stocks displayed some relative strength.
                                                                
Meantime, traders received no notable economic news this morning. Nonetheless, investors turned their attention to the international scene. Of note, China delivered some weak trade data, fueling investors’ fears that the world’s second-largest economy may be starting to slow. Further, many may be skeptical that the stimulus efforts being taken by China’s government will be able to fix the situation al that quickly. Tomorrow will be a somewhat busier day for economic news. Specifically we will get a look at the latest month’s producer prices, retail sales figures, and a report on business inventories. Finally, in the afternoon, the Federal Reserve will issue its Beige Book summation for the month of October, and that report will likely be closely scrutinized.

A few companies posted their results today. Of note, Dow component Johnson & Johnson (JNJ Free J&J Stock Report) saw its stock trade slightly lower after the healthcare giant posted mixed results. After the close of trading today we will hear from Intel (INTC Free Intel Stock Report) and await results from JPMorgan Chase (JPM Free JPMorgan Stock Report). These bellwether companies' reports will shed light on industrywide conditions.

Technically, stocks have been able to hold most of the gains logged over the past couple of weeks. Today’s pause is to be expected, as traders await the barrage of corporate reports soon to be released. Today’s selling puts the S&P 500 Index just above the 2,000 mark, which will likely be a key area to watch. – 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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12:10 PM EDT - The major U.S. equity indexes started the session to the downside, with overseas weakness (more below) spilling over to these shores. However, as the morning progressed, the major averages pared some of the earlier losses and moved into positive territory for a bit, before weakening again in the last half-hour. Still, the major equity indexes, save for the Dow which was down nearly 100 points early in the session, have not strayed too far from the neutral line in what has been a mostly directionless day so far. Perhaps, it is the case of some hesitation ahead of the oncoming rush of earnings news, including two Dow-30 reports after today’s closing bell. This morning, Johnson & Johnson (JNJ - Free Johnson & Johnson Stock Report) reported disappointing results, with unfavorable foreign currency translation reducing the overseas earning power of the blue chip. JNJ shares are now essentially flat.

The start of trading stateside saw stocks move lower, as investors both overseas and, to a lesser extent, here were unnerved by another disappointing economic report from China. Specifically, China’s trade data showed that imports plunged in September and exports weakened as well. The slowing growth in China has investors worried, given China’s importance to the health of the global economy. Not surprisingly, some of the economically sensitive sectors, including the basic materials, industrial, and financial groups, are in the red. The European bourses also closed in negative territory, with the China data and some disappointing economic reports on the Continent, including a drop in German business confidence and weak inflation data in the euro zone, weighing on European stocks.

However, the market is getting a bit of support from the consumer stocks, as well as the healthcare and technology issues. The energy stocks also are putting in a slightly better performance thus far, with the oil stocks being helped by a modest rise in crude prices on the New York Mercantile Exchange.

Meantime, there was some big merger and acquisition news today. Just a day after privately held computer giant Dell and private equity company Silver Lake announced a plan to acquire EMC (EMC) for $67 billion, which would mark the biggest tech deal in history, we learned that SABMiller, the world’s second-largest brewer, accepted a takeover offer from industry leader AB InBev (BUD). The recent M&A news is helping stocks some, as investors typically view such activity as a sign of a healthy market.

Looking ahead, the main stories are likely to be Corporate America and the Federal Reserve. The fact that the U.S. market is brushing off the weak data overnight from China is clearly a sign that third-quarter earnings news is likely to drive the market over the next fortnight. The ball gets rolling in a big way after today’s closing bell, with the latest quarterly results from JPMorgan Chase (JPM - Free JPMorgan Chase Stock Report) and Intel (INTC - Free Intel Stock Report). Stay tuned. - William G. Ferguson

At the time of this article’s writing, the author held positions in one or more of the companies mentioned.

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Before The Bell - Wall Street attempted to extend its more-than-week-long rally yesterday and initially found that a challenge, as the major averages drifted in and out of the plus column through the first two hours of trading. However, late in the morning, the bulls took over and moderate buying ensued just before lunch on this low volume holiday session. In all, the market saw modest gains by noon in New York, as the Dow Jones Industrials moved out to a 50-point gain, while slight improvement was seen in the other large-cap indexes.

There also was a sector divide early on, with gains secured in the utility stocks and consumer-related groups, but with losses in energy (on lower oil prices) and a retreat in the basic materials line, namely in the metals, mining, and steel issues. Profit taking in these sectors, each of which is now materially overbought, contributed to the weakness that had evolved by mid-session.      

Meanwhile, there was little of note in the news on this Columbus Day, as few companies reported results; this now changes abruptly today, as third-quarter reporting season gets under way in full blast. Earnings season is now occupying the minds of traders and investors, as is the Federal Reserve, which will be meeting soon to decide on interest-rate policy. Expectations are that the Fed will pass on a rate hike when it meets late this month, but that could shift gears at its December confab. On point, Fed Vice Chairman Stanley Fischer intoned over the past weekend "the U.S. Federal Reserve policymakers are still likely to raise interest rates this year." However, he went onto suggest that this was "an expectation, not a commitment."

That likely stand pat decision by the Fed in a fortnight from now aside, the market moved little through the early afternoon, with the Dow staying in the plus column, with gains of between 20 and 50 points, for the most part, while the Standard & Poor's 500 Index and the NASDAQ again moved in out of positive territory, but never veering far from the breakeven line. As before, the energy and materials groups continued to weaken reflecting the poor performance in the underlying commodities.

This uneven pattern persisted through the remainder of the afternoon, as worried investors opted to largely stand aside by making few clear commitments ahead of the quarterly flood of earnings reports that begins today, as three Dow companies, for example, will be issuing their quarterly statements and respective outlooks, along with scores of other high-profile corporations.

At the final bell, the market, helped along by a slight upward bias during the final few minutes, managed to put in a decent, but hardly uplifting, performance, led as before by the utility group and some consumer sectors, as well as by the telecom sector, but held back by sharp retracements in the basic materials and energy categories. (This latter pullback, in addition to profit taking, ensued following two dollar, or so, drop in oil prices yesterday.) Also, as earlier in the day, advancing issues and declining stocks were about evenly divided with a small edge to the winners on the Big Board and to the losers on the NASDAQ. All told, the Dow added 47 points; the S&P 500 Index ticked up by three points; and the NASDAQ chipped in with a gain of eight points.  

Looking out now to a new day and the full-fledged start of reporting season, we see that stocks were generally weaker in Asia in the overnight session, driven down by dour international trade results out of China. Specifically, exports fell by 3.7% in that country, while imports plunged by 20.4%. This market weakness is extending to Europe this morning, where the principal bourses are notably in the red. It is the same story on our shores, where the S&P 500 Index futures, for example, are now off by nine points.

Finally, as to earnings news, giant health care supplier and Dow-30 component Johnson & Johnson (JNJ - Free Johnson & Johnson Stock Report) reported that the strong dollar had eaten into quarterly sales more than anticipated, with these major foreign exchange headwinds also taking a bite out of quarterly profits. The stock, in response, is suggesting a retreat at the open this morning. After the bell, two other Dow companies, banking behemoth JPMorgan Chase (JPM - Free JPMorgan Stock Report) and semiconductor mainstay Intel (INTC - Free Intel Stock Report), are scheduled to issue their quarterly reports.   - Harvey S. Katz 

At the time of this article’s writing, the author held positions in one or more of the companies mentioned.