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After The Close - The U.S. stock market moved notably higher today, with increased buying in the final hour of the session. At the close of trading, the Dow Jones Industrial Average was ahead 142 points; the S&P 500 Index was up 13 points; and the NASDAQ was higher by 27 points. Meanwhile, there was a somewhat mixed tone to the session, as advancers were just slightly ahead of decliners on the NYSE. Most of the major equity sectors managed to make some progress, helped by notable gains in the consumer noncyclical stocks and healthcare names, which have been weak in recent sessions. In contrast, the heretofore strong basic materials issues declined quite a bit today.

Traders received a couple of economic reports this morning. Specifically, the University of Michigan’s consumer sentiment survey delivered a preliminary reading of 98.0 for the month of December. This showing surpassed analyst expectations, and was also nicely higher than the November figure. Furthermore, wholesale inventories eased 0.4% in the month of October, but this reading was in line with expectations. The week ahead will contain one key item. Specifically, traders will be paying close attention on Wednesday when the FOMC wraps up its two-day meeting and weighs in with an interest-rate decision. At this point, most on Wall Street are expecting a nominal quarter point hike in rates. However, the remarks presented at the end of the meeting will also be dissected and are often subject to interpretation.

Elsewhere, a number of corporations delivered their quarterly reports during the past 24 hours. Specifically, shares of Broadcom (AVGO) moved nicely higher, after that company posted a better-than- expected report and provided upbeat guidance.  However, things did not go as well for Restoration Hardware (RH). That stock sank on concerns about the business outlook.

Technically, traders continue to extend the rally that started in mid-November. Today’s move up pushes the S&P 500 Index to about 2,260 and beyond the widely watched 2,250 level. It remains to be seen how the market will do in the final weeks of the year. However, with the holiday season in full swing, sentiment may remain bullish for a while longer, unless the Fed has some unwelcome surprises in store. - 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 EST - The U.S. equity indexes opened to the upside this morning as the bulls try to push prices up for a fifth-straight day and make further inroads into record territory.

Indeed, the run-up in stock prices over the last month has been fairly impressive, with broad global indexes up nearly 4% over the period. However, the makeup of today’s advance (at least on our shores) differs a bit from what has been the dominant trend since the U.S. Presidential election. Whereby the previous winners were largely coming from the financial and basic materials sectors, the two (along with telecommunications) are among the largest decliners today.  Instead, this morning’s charge is being led by the healthcare sector (up 1.3%) which up until now had taken a pounding amid talk of a crackdown on ever-rising drug prices. Consumer non-cyclicals (up 0.9%), technology, and utility shares (both up 0.4%) round out the list of top performers so far today.

Altogether, at the noon hour of trading in New York, the major indexes had not wandered far from their highs for the day, which had also served to etch out new historical records. The NASDAQ Composite had fared the best with an advance of just under half a percentage point for the morning. But the Dow Jones Industrials and S&P 500 weren’t too far behind, both showing gains of about one-third of a percent.

The mood has also remained upbeat in the euro zone. Investors apparently approve of the European Central Bank’s latest monetary stimulus strategy announcement. Specifically, the lead bank recently said that it would extend its current bond purchasing program through December of next year, versus the original planned cutoff in March. However, it would be scaling back its monthly outlay by 25%, to 60 billion euros. As trading across the Atlantic approached the closing bell, France’s CAC-40, which has spent the entire session in positive territory, had advanced by more than half a percentage point, while London’s FTSE and Germany’s DAX rebounded from mid-session dips to eke out gains of about a quarter percent each. – Mario Ferro

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

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Before The Bell - The post-election rally just continues to ramble along. On point, after two modestly better, but still uneven market performances on Monday and Tuesday of this first full week of December, the bulls ran wild on Wednesday fashioning almost a 300-point win for the Dow Jones Industrial Average. And those confident optimists were not done yet, as stocks began the day yesterday with no apparent appetite to take profits in an uneven showing during much of the morning. However, after that quiet start and as we moved into the afternoon, the buyers surfaced again, driving the Dow, the S&P 500 Index, the NASDAQ, and the Russell 2000 to additional record highs.

As the session continued, the Dow again mounted a gain into triple digits, with a late-afternoon push that lifted that blue chip composite ahead by some 115 points, pushing the index to 19,665. The S&P 500 Index also jumped ahead, moving past 2,250. The bulls, it would seem, are bent on trying to push the Dow toward 20,000 and the S&P to 2,300. Not to be undone, the NASDAQ rose above 5,400. The mid-afternoon rally was rather inclusive, but still featured some notable exceptions, with the drug and other health-care providers under continuing pressure from government jaw-boning about pricing. Also, retailers of household goods also weakened. Some other groups, such as selective retailers, also wilted, while others flourished as many in the group have been reporting their quarterly results in recent days.

The better-than-month-long climb in the market since the election of Donald J. Trump as President-elect has been driven by optimism about domestic economic stimulus and the expectation that the incoming Administration will push for lower corporate taxes and less government regulation. Also, helping sentiment yesterday was the release of weekly unemployment claims, which showed a decline, following a rather sharp advance the week before. This latest metric should help fuel further optimism on job growth and economic performance going forward. 

However, while the path of least resistance seems higher, with seasonal factors and solid economic data also favoring the bulls, stocks are clearly overbought and multiples are expanding. Also, the advance has been uneven of late, with the energy stocks, the industrials, and now some tech issues leading the way higher. That has clearly been the case this week, with the financials also among the leaders as has been the case throughout this month-long stretch. Among individual winners in the latest session, retailer lululemon (LULU) led the way jumping some 15% as the yoga and leisure apparel maker reported a strong quarterly earnings performance.

Still, after this mid-session surge, the averages fell a little off of their exalted perch, but not dramatically so, in what could best be seen as some very late and even less significant profit taking, so that by the close, the Dow had retained 65 points of its earlier 115-point advance, while increases of five and 23 points were inked, respectively, by the S&P 500 Index and the NASDAQ. Advancing issues led declining stocks on the Big Board by a comfortable margin, while the differential was even more in the favor of the bulls on the NASDAQ. 

Now, a new day dawns and as the bulls seek to make it five sessions in a row of rising stock prices, we find that the markets were generally higher in Asia overnight, while the gains are incremental thus far in London and on the Continent. So, it is not surprising that our futures are climbing, albeit modestly, suggesting that we will head higher at the opening bell in less than an hour from now. Of note, U.S. Treasury notes are relatively flat this morning, but the yield, up at about 2.42%, is near the high for this move and could become problematical if this uptrend continues. So, rates will need to be watched, as will the equity rally, which has produced an overbought and richly capitalized market. 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.