Market Close - The U.S. stock market got off to a weak start this morning, and the losses accelerated through the afternoon and into the close. The fact that the buy-the-dip crowd did not move in to support equities was duly noted. At the close of the session, the Dow Jones Industrial Average was off 267 points; the broader S&P 500 Index was lower by 39 points; and the NASDAQ was down 130 points, losing over 3% for the day. Market breadth was decidedly negative, with declining stocks outnumbering advancers by over three to one on the NYSE. The statistics were more discouraging on the NASDAQ. The selling was widespread, as all of the market sectors slipped into negative territory. There was considerable weakness in the healthcare sector, as investors rotated out of the high-flying biotechnology issues once again. The technology stocks also encountered selling, with the Internet issues coming under fire. Meanwhile, the utilities, which have been an area of strength lately, held up a bit better than other industry groups. Further, investors flocked to gold, as that metal was up over 1%, to $1,319 an ounce. Silver prices also moved higher.

Technically, today’s move lower wiped out the small rally attempt staged earlier this week. The S&P 500 Index is now below its 50-day moving average, located at about 1,843. It is also back at the bottom of the trading range that it had been locked in during most of the month of March. Clearly, this level of volatility suggests that traders are not comfortable with the current situation, as they are looking for direction. Sentiment has turned more fearful, too, as the VIX spiked 15%, to just under 16, today.

Traders looked past the economic reports released earlier today. Specifically, initial jobless claims for the week ended August 5th dipped to 300,000, which was better than had been expected. Continuing jobless claims showed improvement, too. Tomorrow, we get a look at the Producer Price Index for March, as well as the University of Michigan’s consumer sentiment reading for April.

Meanwhile, investors received a few earnings releases to digest today. However, this did little for the bulls. Rite Aid (RAD) stock moved higher, as investors were pleased with the company’s progress. Pier One (PIR) reported decent quarterly results, but that stock was up just slightly. Tomorrow, we get a look at the big banks, as J.P. Morgan Chase (JPM - Free J.P. Morgan Stock Report) and Wells Fargo (WFC) are set to put out their figures. Hopefully, the earnings season, which is just starting, will provide some support for equities. - Adam Rosner

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


2:30 PM EDT - Just when it appeared as though the bulls had wrested the reins back from the recently triumphant bears, with the former scoring back-to-back wins the past two sessions, the sellers are at it again today.

And they are unloading stocks in a big way. Thus, after a hesitant start and an in-and-out performance early on, the sellers have hit the ground running and are taking equities down dramatically as we enter the final two hours of the week's penultimate session.

On point, the Dow Jones Industrial Average is now off 178 points, which is comparatively near the trough for the day; the NASDAQ is plunging by 102 points; and the Standard and Poor's 500 Index is in the red to the tune of some 26 points. Once more, however, it is the small-cap Russell 2000, which is bearing the brunt of the selling (along with the NASDAQ), as the former index is now down a stunning 28 points, or 2.4%.

Among individual sectors, the biotech issues, which had led the way lower earlier in the week, are at it again, with some high-profile stocks in this volatile group now off 10%. The tech stocks are also hitting the skids, with many big names traversing a downward path of some note. In fact, save for the utilities, which often do relatively well in a market decline, due to their perceived safety, are again trying to stem the lower tide, but with little aggregate success.

Thus, as we head toward the latter stages of the day, there is little for the bulls to grab onto, and we seem to be making our way toward a notably lower close, although the market's recent elevated volatility does not make this likelihood a certainty. Stay tuned. - Harvey S. Katz, CFA

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


12:15 PM EDT - Stocks are trading notably lower on Thursday after Wednesday’s big rally on Wall Street, with renewed weakness in the technology sector. Right around the noon hour on the East Coast, the Dow Jones Industrial Average is off 78 points and the NASDAQ is down 77 points, or a much worse percentage than the Dow. Similarly, market breadth shows a decidedly more bearish pattern on the NASDAQ than the Big Board.

Yesterday’s bounceback notwithstanding, investors don’t have a lot to get excited about. Earnings season is under way, and whatever good news there is may already be factored into stock valuations. The economy is not going great guns either, although prospects are for improvement as the year wears on.

This morning brought word from the Labor Department that weekly initial unemployment claims fell to their lowest level in nearly seven years, but the data seemed to be discounted to a degree by the lateness of Easter this year, which may cause some volatility in jobless claims in the coming weeks.

Certainly, today’s modest decline in the yield on the 10-year U.S. Treasury note, with the price moving in the opposite direction, shows a level of cautiousness on the part of investors. That fits in with the morning’s outperformance of the utility sector, benefiting shares of power companies, such as Exelon (EXC). Utilities are usually considered the nearest investment class to bonds in the stock market.

Not helping matters either was a weak trade report out of China that showed a decline in exports, after an increase had been expected. The stock markets in Asia and Europe managed to largely shrug off the disappointment, but those exchanges tend to follow the lead of the U.S. markets, which put in a strong showing yesterday.

Simmering tensions in Ukraine that have the potential to quickly escalate are making traders wary, too. Those concerns are apparent in the oil market, as well, where the price of a barrel of crude oil settled near a one-month high yesterday, despite a substantial rise in inventories. Oil quotations are down slightly today, though.

In corporate news, shares of drug-store chain Rite-Aid (RAD) are bucking the trend, rising sharply on better-than-expected earnings improvement.

Heading into the afternoon session, stocks are near their lows for the session. It remains to be seen if the selloff will prompt bargain hunters to step in. - Robert Mitkowski

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


Stocks to Watch from The Survey There is some earnings news out today, as drug store operator Rite Aid (RAD), discount retailer Family Dollar (FDO), and home goods seller Bed Bath & Beyond (BBBY) have all released February-period financials. Results were mixed, as investors cheered Rite Aid’s update, but were unimpressed with Family Dollar’s and Bed Bath & Beyond's. Consequently, RAD stock is up nicely ahead of the bell, while FDO and BBBY shares are down moderately. Other retailers will likely be in the spotlight today, as well, since several, including warehouse club Costco (COST), Victoria’s Secret parent L Brands (LB), and action-sports related clothing and accessories seller Zumiez (ZUMZ), have reported same-store sales for the month of March. – Matthew E. Spencer 

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

Before The Bell - Following an irregular and altogether hesitant stock market rally on Tuesday, which followed a trio of heavy losses for Wall Street in those preceding days, the buyers really came back en masse yesterday, propelling the major indexes to a notable turnaround rally. Encouragingly, the upturn was focused in the very groups, the NASDAQ and the Russell 2000, that had suffered the most in the recent string of heavy setbacks.

Helping the equity market yesterday was some bargain hunting, which is normal and constructive in the wake of a sharp decline, and encouragement from the issuance of the Federal Reserve's FOMC minutes from its mid-March monetary meeting. The clear message from those minutes was that the Fed would be in no hurry to aggressively increase interest rates even after it finally begins the process of raising such short-term borrowing costs, presumably later in 2015. The fear of rising rates, always around, had been even more on the minds of investors in the wake of some recently stronger economic releases.

On this very subject, the central bank intoned that it had reached a consensus that the 6.5% unemployment rate threshold for the first rate hike was outdated. With the current jobless level at 6.7%, the fear among the bulls had been that unemployment could get down to that slightly more benign figure anytime soon. Now, by moving somewhat afield from such a target, the presumption is that we could yet be a year, or more, from initiating a series of borrowing-cost hikes. That conclusion has clearly served to mollify some heretofore nervous equity investors.

Meanwhile, yesterday's winners on a sector basis were the technology and biotech issues. These two groups had been the principal casualties in the market's brief, but sharp, selloff. On the other hand, the higher-yielding utilities, which had been a relative safe haven during the selloff, as they often are at such times, were notably out of favor yesterday. The sense among traders was that with the Fed still on board, there was again some logical tolerance for risk. Hence, the outperformance of the previously laggard high-growth groups.

All told, the decidedly better market tone helped the Dow Jones Industrial Average recover 181 points yesterday, while the Standard and Poor's 500 Index added 20 points, and the NASDAQ, the clear winner, surged by 71 points, or 1.7%. The small- and mid-cap indexes also fared well, with the small-cap Russell 2000 tacking on 16 points, or 1.4%. The Russell had been the big loser, after the NASDAQ, late last week and this past Monday.

Now, in addition to the Fed and the situation in Ukraine--where things appear to be worsening once again and a Cold-War-era-type standoff is now in place, Wall Street is currently focused on the pending flood of first-quarter earnings reports. A few names are on the docket for later this week, but the first real tide of reports will come forth over the following five trading sessions, when about a third of the Dow-30 components will be issuing their quarterly metrics. Before that, JPMorgan Chase (JPM - Free JPMorgan Chase Stock Report) will be releasing results tomorrow morning. Also tomorrow, the U.S. Labor Department will release producer price data for March, while the University of Michigan will post its latest findings on consumer sentiment. Neither report shapes up as much of a market mover. 

Finally, as we look ahead to the new day, we find that Wall Street's nifty comeback yesterday is catching on overseas, where stocks were strongly higher in Asia overnight, while they are also holding their own, for the most part, thus far this morning in Europe. On our shores, meanwhile, the futures are telling a very slightly bearish tale, with the Standard and Poor's 500 Index futures now four points lower, while the NASDAQ futures are posting a loss of eight points. Weak economic data in China seem to be putting some modest pressure on equities here, while after yesterday's intense short-covering rally by traders is apparently giving way to some rethinking of both the Fed minutes and the pending flood of first-quarter earnings. - Harvey S. Katz

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