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After The Close - Stock trading today saw three of the major averages, the Dow Jones Industrials, the NASDAQ, and the S&P 500  reach heights not seen before, before pulling back later in the day. At the close, most of the strength was concentrated in the Dow, which rose 98 points. The NASDAQ and the S&P 500 ended little changed, and the small-cap Russell 2000 closed modestly lower. Market breadth wasn’t overly convincing, as the number of advancing and declining issues was close to even on the Big Board.

Once again, the main driver for the bulls was solid earnings from a number of major corporations. Companies doing well included aerospace giant and Dow-30 component Boeing (BA Free Boeing Stock Report), which topped analysts’ second-quarter profit estimates, raised its near-term guidance, and impressed Wall Street with its cash-flow generating capabilities. Boeing stock surged as a result, and accounted for just about all of the Dow’s gains.

Shares of telecom industry leader AT&T (T) also had a good day, rising nicely after the company surpassed earnings expectations. In fact, the telecom group was one of the best performing of the market’s ten major sectors.

Energy-related stocks rallied with a rise in crude oil quotations. The price of oil rose by around $0.75 a barrel in NYMEX trading on a big drop in inventories, as reported by the Energy Department. Market watchers have been waiting many months for inventories to decline in a meaningful way, but the pace of the drawdown has been hindered by rising drilling activity in the United States. The most recent data indicate that domestic production edged a bit lower, though. That may be a sign of rising support for oil prices ahead, although it is too early to call a clear-cut trend reversal.

Elsewhere, a report on new home sales in June as reported by the Commerce Department came in close to economists’ forecasts, and pointed to firm housing market conditions. The data did little to lift shares of homebuilders, but was nevertheless a good sign for an industry being supported by good job growth and historically low mortgage rates.

Mortgage rates should remain relatively affordable in the coming months. The Federal Reserve this afternoon kept interest rates steady, as expected.

The earnings deluge is set to continue on Thursday.  - Robert Mitkowski

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

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12:15 PM EDT - Stocks are trading selectively higher today, as traders digest the latest batch of corporate profit reports, and wait for the Federal Reserve’s upcoming monetary announcement. At just past noon in New York, the Dow Jones Industrial Average is ahead 100 points; the S&P 500 Index is up slightly; and the NASDAQ is ahead about 10 points. Market breadth shows little bias to today’s session, as advancers are slightly ahead of decliners on the NYSE. As was the case yesterday, the energy sector is advancing nicely, as crude oil prices continue to firm up. The telecom names are also making strides. In contrast, the healthcare and basic materials issues are lagging.

Meanwhile, one notable economic report was issued earlier today. Specifically, new home sales advanced slightly to an annualized rate of 610,000 units during the month of June. This figure more or less matched expectations. As mentioned, at 2PM (EDT), the FOMC will make an interest-rate announcement and offer some commentary. While most traders on Wall Street think that rates will be moving higher over time, few anticipate a hike at this meeting.

Elsewhere, we are starting to move through the second-quarter earnings season. Over the past 24 hours, quite a few large companies weighed in with their numbers. Specifically, shares of AT&T (T) are moving up nicely after the telecom leader put out a solid report. In addition, shares of Boeing (BA - Free Boeing Stock Report) are surging after the company delivered generally strong numbers and an encouraging outlook.

Technically, the stock market continues to make progress. For now, traders are busy watching corporate profits, and possibly anticipating that the Administration will make progress passing some corporate friendly initiatives. - 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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Before The Bell - Following an inconclusive session on Monday and the start of the Federal Reserve's two-day FOMC meeting yesterday morning, the bulls got the new session rolling in a big way with an immediate jump forward of more than 150 points in the Dow Jones Industrial Average. Along with the Dow's snappy opening gain, the Standard and Poor's 500 Index soared to another intraday all-time high, advancing to just shy of 2,480 at the opening bell. The NASDAQ, however, was held back, posting a small early loss under pressure from a 28-point loss in shares of Alphabet (GOOG) on news of an antitrust fine.  

The strong start, however, could not be sustained, and as we neared the one-hour mark of trading, the 57-point Dow gain had been pared to some 65 points. The NASDAQ, meantime, barely held at breakeven, while the S&P 500 Index saw its gain cut to a handful of points. The big influence was earnings, as industrial giant Caterpillar (CAT - Free Caterpillar Stock Report) posted bottom-line results that exceeded expectations and shares of that Dow-30 component jumped nicely in early dealings. It was a far different story for fellow Dow stock 3M Company (MMM - Free 3M Stock Report). That industrial giant disappointed investors with its top-and-bottom-line miss, and the stock tumbled.

The Dow's pullback didn't continue, however, and as we passed the one-hour mark, that index again started to press higher, soon returning to past the 100-point advance mark. The strength continued through the morning, so that as the noon hour arrived, the market was up strongly, with the Dow's advance holding at a formidable 130 points, in spite of the 3M profit miss and subsequent price drop. The S&P Mid-Cap and the small-cap Russell 2000 were leading the way, with gains that were closing in on one percent. The NASDAQ, though, had dipped back into the red, although with no real conviction.

Lifting the market, in addition to some generally constructive earnings reports, was another strong reading in consumer confidence, with that key metric gaining in July, besting expectations of a slight pullback. Expectations that the Federal Reserve would hold the line on interest rates also emboldened the bulls, as we moved into the afternoon hours, with the market holding solid gains, save for the tech-laden NASDAQ, which was continuing to waver between a small gain and a slight setback. The rally then gained some additional momentum as we moved more deeply into the afternoon, with the NASDAQ finally joining in the upturn.

The strong advance persisted into the close, with the Dow's triple-digit point gain staying intact until shortly before the concluding bell. As was the case earlier, the bullish tone was driven by better-than-expected earnings, not only from the Dow's Caterpillar, but also from McDonald's (MCD - Free McDonald's Stock Report), another component of that 30-stock composite. Those two issues continued to overcome the further weakness in 3M. Also, most of the leading sectors were trading higher, led by basic materials and energy, while stocks rising in price easily topped those equities falling back. In short, there were few places for the encumbered bears to hide.    

When all the number were thus in, the Dow, with a last minute push higher closed higher by 100 points; the S&P 500 added seven points; and the NASDAQ eked out a small win. More substantial gains were posted by the smaller indexes. Now, as we await a new day, additional earnings data, and a report on sales of new dwellings (following Monday's solid report of sales of existing homes, the big story will be the Fed. The central bank, which commenced its latest FOMC meeting yesterday, will end matters this afternoon at approximately 2:00 PM (EDT), with a likely decision, as noted above, to keep interest rates unchanged.   

Meanwhile, in action overnight, stocks in Asia ended matters higher as investors awaited the Fed policy statement, while equities in Europe are showing early gains in dealings so far this morning. In other markets, oil, after a nice gain yesterday, is trending upward, pushing past $48 a barrel in New York; gold is off nominally ahead of the Fed; and Treasury yields, up yesterday, are now off a bit. Finally, U.S. futures are showing some early strength in the pre-market 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.