Before the Bell: Another day, another rally--at least at the start. So, after sharp gains on Tuesday and Wednesday of this holiday shortened week, Wall Street began the penultimate session of this four-day span to the upside. Optimism that the new Administration would meet with success in expediting the rollout of vaccines, hopes that new stimulus spending would alleviate the worst of the financial pain of the pandemic, and a succession of solid earnings reports led the way higher early on. However, after a mixed close yesterday, the market is poised to open matters to the downside this morning.

Looking at yesterday, we received a pair of key economic reports, one good and the other somewhat worrisome. To start with, the Commerce Department reported that housing starts rose by 5.8% in December to an annualized rate of 1.67 million units. Expectations had been for 1.56 million starts. That uptick continues the strong rebound in this core sector. Later today, we are scheduled to get data on sales of existing homes during December--another metric that has been strong in recent months.

On the other hand, the Labor Department reported that first-time jobless filings eased to 900,000 in the latest week, down from 926,000 in the previous week. Notwithstanding this slight improvement in jobless filings, the absolute level of unemployment remains troublingly high and probably will not show much improvement until the coronavirus lessens in frequency.

Regarding the market, after that modestly higher start, strength in the technology space helped sustain the rally for much of the day. Specifically, the Dow Jones Industrial Average would stay a bit higher in the morning, dip into the red in mid-session, strengthen anew in the middle of the afternoon, and fade into the close, ending the session 12 points into the red. A similar trend would unfold with the S&P 500, before a flattish end, while tech strength would help the NASDAQ end up by 74 points.

Meanwhile, earnings continued to flow in and for the most part these results made decent reading with strong results from chip giant Intel (INTC), with that stock adding almost $4.00 a share on those results, although the issue did pull back in after hours. At the same time, old-line tech issue IBM reported its results after the close and that issuance proved most disturbing as revenues slid during the fourth quarter. The stock, which rose by $1.57 a share in regular hours trading, then fell nearly $10 last evening.  Both of these issues are under pressure this morning, as are the stock market futures in general. – Harvey S. Katz, CFA

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