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After The Close - The major U.S. stock indexes started the Friday before the long President’s Day weekend with an uptick, but trading soon became mixed. Stocks uniformly fell into the red by early afternoon, but a late-session rally helped to trim losses.

On the economic front, the U.S. Commerce Department reported that retail sales were up an estimated 0.3% in January. The number came in below expectations, as big gains at home centers and restaurants were offset by a 3.1% drop in clothing store sales. The latter marked the largest decline in over a decade. Meanwhile, The Federal Reserve announced that industrial production was off by 0.3% in January, making for the fourth decline in the last five months. A good portion of the drop was attributed to Boeing (BA Free Boeing Stock Report) suspending production of its 737 MAX aircraft. Meanwhile, the coronavirus continued to weigh on investors’ minds, as the official case count jumped by more than 5,000, to 63,850, following China’s recent change in how it diagnosed the disease.

When all was said and done, the Dow Jones Industrial Average ended the session down 25 points, the S&P 500 eked out a 6-point gain, and the NASDAQ was ahead 19 points. Among the 10 major market sectors, decliners and advancers were evenly split, with the biggest loss coming from energy shares, which fell 0.4%, while, utilities led on the plus side, with a gain of 0.7%.

Elsewhere, oil prices had a positive day following reports of increased buying from Chinese refiners. Light sweet crude ended up 1.3%, to a little over $52.00 a barrel. This rounded out a 3.5% gain over the past five days, marking the first advance in six weeks. However, the commodity is still down 10.4% over the past month.

The mood was also downbeat on the European bourses, following weak fourth-quarter GDP growth estimates for the region, The U.K.’s FTSE 100 took the biggest hit, falling 0.6%, while France’s CAC-40 was down 0.4% and Germany’s DAX held on enough to close just below breakeven. – 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 - After a string of further daily gains, which helped Wall Street set additional daily record highs on the Dow Jones Industrial Average, the S&P 500 Index, and the NASDAQ, the stock market took an early step back yesterday. And the cause was an escalation in fears about the fast-spreading and deadly coronavirus. On point, another jump in these cases, which now exceed the total for the SARS virus in place nearly two decades ago. In all, the stock market opened the downside and within minutes the Dow was off by more than 200 points.

That early selloff would prove to be the low point of the session, as the market quickly began an irregular comeback that would come close to erasing the Dow's triple-digit losses. The S&P 500 and the NASDAQ would come all the way back and would spend much of the afternoon in the green. Offsetting this dour news was continued optimism about the health of the nation's economy. As we look toward the latter half of the first quarter, it would seem that GDP growth might well approach 2%--off just modestly from the 2.0% gain tallied in last year's fourth quarter.

As for the coronavirus, China confirmed an additional 15,000 plus cases and more than 250 added deaths from the breakout. That country's death toll is now more than 1,300; and total cases have soared above 60,000. The major impact, of course, remains on China and for certain travel-related enterprises. As for our country, the impact is still modest, but ill-defined as far as the future goes. Should the risk increase materially, the market could turn more volatile, especially as stocks seem to be priced for near perfection at these levels.

Comparing how this outbreak compares with the SARS virus, the S&P 500 then sold off by 13%; the damage is much more contained now. Of course, back then, we were in the midst of a recession and turbulence around the world, in particular the situation with respect to Iraq was much more volatile. As far as the day's action went, the market would seesaw into the afternoon, with more red than green ink, overall, but no major downtrend in place. The drift would be a little weaker down the homestretch. 

As to the final minutes of the session, the stock market would remain lower, pushing back down toward the lower levels of the session. AS for individual stocks, the market was pressured by a dour result from Dow component Cisco Systems (CSCO Free Cisco Stock Report), while an announced delay in formulating its restructuring plans put a downward move on shares of Kraft Heinz (KHC).  Thus, at the close, the Dow would be off by 128 points and the NASDAQ would shed 14 points. Treasury yields also would decline.

Looking out to a new day in which we will get data on industrial production and capacity utilization, we see that the likely trend in the stock market early on could well be positive following generally mixed sessions overseas. – Harvey S. Katz, CFA

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