After The Close - The stock market’s Monday morning rally cooled off in afternoon trading, but Wall Street still started off the week with fairly broad gains. The Dow Jones Industrial Average, which had been up by as much as 71 points at its best level of the session, closed with a 16-point rise. As for the S&P 500 and the NASDAQ, those widely watched barometers showed advances of five points and 30 points, respectively, when the closing bell rang. Overall, there was strength in the tech sector and in small-cap stocks, which both held on to their early gains better than large-caps. Meanwhile, market breadth was broadly positive on both the Big Board and the NASDAQ.

Investors came in from the weekend riding the momentum of Friday’s sharp move upward, when spirits were lifted after the situation between Ukraine and Russia turned a bit less ominous.

That feeling carried over at today’s opening bell, but by midday the positive sentiment started to wane, and it seemed that investors were again looking for direction.

One of the issues that has the market concerned is the prospect of higher interest rates sometime in 2015. The Federal Reserve is on course to wind down its aggressive bond-purchasing program by the end of this year, and the thinking is that short-term rates will be on the rise at some point after that. Of course, nothing is written in stone, and the Fed itself has said many times that the strength of the economic data will dictate the speed of its policy shift.

But a look at rates around the world shows a decided bias to the downside. Even countries that had experienced much higher interest rates a few years earlier, such as Spain and Italy, can now offer government bonds at rates not that much different than the United States. Still, if, as it is said, the stock market gauges conditions six to nine months down the road, it seems the thinking is that rates will be higher then, judging by the recent pullback in interest-rate sensitive groups, such as utilities and telecoms. Those groups were laggards today, too.

In the latest session, energy was one of the leading sectors, invigorated by word that Kinder Morgan (KMI) would be consolidating its pipeline empire. Another winning stock today was that of pharmaceuticals company MannKind (MNKD), which received a $150 million upfront payment from Sanofi (SNY) for the development of an inhaled insulin treatment that recently received FDA approval for the medicine. – Robert Mitkowski

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


12:15 PM EDT - The U.S. stock market is advancing sharply today, as traders look to extend Friday’s gains. At just past noon in New York, the Dow Jones Industrial Average is ahead 57 points; the broader S&P 500 Index is up 11 points; and the NASDAQ is tacking on 40 points. Too, the Russell 2000, a small-cap index, is ahead nicely, suggesting that traders are likely feeling less risk averse today. Market breadth is decidedly favorable, with advancing stocks outnumbering decliners by about four to one on the NYSE. Further, all of the market sectors are deep into positive territory. There is leadership in the energy issues. The technology names are also making solid progress, thanks to large gains in the semiconductor stocks. While there are no clear areas of weakness in the market today, it should be noted that the financials and the high-yielding utilities are trailing many other equity groups.

The markets in the U.S. may have gotten a lift from a strong session overseas. In Europe, the bourses advanced sharply. Also, in Asia, stocks climbed notably higher. It seems that the political tensions in the Middle East and in Russia may be easing, at least temporarily, which is a positive development.

The market, which pulled back a bit over the past two weeks, may now be looking to rebound. Given the support for stocks displayed by the bulls and bargain hunters in the past, this would not be surprising. Too, the sentiment is much improved, as the VIX is retreating 13%, to just under 14.

Meanwhile, investors received no major economic reports this morning. Tomorrow will be a light day for releases, as well.

Finally, there are likely a few corporate news items worth mentioning. Priceline.com (PCLN) stock is slightly higher, even though some traders may have been concerned about the company’s outlook. Also, Kinder Morgan (KMI) shares are up sharply, as that company has agreed to consolidate its family of businesses. The deal may have some traders speculating about further mergers and acquisitions in the broader energy area. - Adam Rosner

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


Stocks to Watch from The Survey This morning’s biggest corporate news story comes out of the energy sector. Indeed, pipeline giant Kinder Morgan (KMI) has announced plans to consolidate its vast empire, which includes Kinder Morgan Energy Partners (KMP), El Paso Pipeline Partners (EPB), and Kinder Morgan Management. The total purchase price for the three companies is $71 billion, which includes $27 billion in debt. Investors cheered the news, and shares of KMI, KMP, and EPB are all soaring ahead of the bell, in response.

There is also some earnings news to be aware of, with one of the biggest disappointments coming from Dean Foods (DF). Indeed, shares of the manufacturer and distributor of fresh milk and dairy products are indicating a notably lower opening this morning, after the company released weaker-than-expected June-period results. The stock of online travel agency The Priceline Group (PCLN) is also moving lower in the premarket on earnings news, albeit to a much lesser extent than DF. – 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 - The stock market, under pressure for much of the past week, and seemingly headed for another sizable drop on Friday after an early advance faltered in mid-morning, regained its footing shortly thereafter and sprinted to an eye-catching session gain on the strength of a burst of welcome buying after lunch.

The reason for this comeback, which helped the Dow Jones Industrial Average turn a near-certain loss for the week into a modest advance, was the apparent defusing of tensions between Russia and Ukraine, after the former said that it was ending its military exercises near to this strife-torn former Soviet Republic.

Helped by the lessening in skittishness in Europe, and seemingly looking past the eroding situation in Iraq and the ongoing military action in Gaza, stocks pressed strongly higher to end a volatile trading week on Wall Street with gains. At its best levels of the day, in fact, the market was aglow in buying action, as the Dow Jones Industrial Average soared to an afternoon advance of more than 180 points, while the tech-laden NASDAQ pushed forward at its peak, to a gain of almost 40 points. Stocks, encouragingly, closed at just about their best levels of the day.      

As noted, Wall Street took heart from news that Russia had ended its military exercises near Ukraine. Also, the market failed to get rattled by the news of U.S. airstrikes in Iraq. The ongoing headlines from Gaza, meanwhile, also did not take the measure of the recently chastened bulls. 

This constructive action, for now, lessens the risk of a correction in what is still an overbought market on an intermediate-term basis. Going into the latest session, the Dow, for example, had lost a cumulative 5% from its all-time peak reached earlier this year. A decline of 10% is normally considered to be a correction. After Friday's big gain, the pullback is back down to less than 4%.

What is also helping sentiment and, thereby working against a correction at this time, have been decent earnings results during the second-quarter reporting season and a succession of business metrics showing a strengthening economy. Of course, the latter could invite some earlier-than-hoped-for monetary tightening by the Federal Reserve, though for now, our best guess is that the central bank will hold off on raising interest rates until mid-2015. In fact, comments made by Vice Fed Chair Stanley Fischer to the effect that the economy may still be weak enough to keep the central bank in an accommodative mood for some time yet, is helping to sustain the good feelings toward the market so far this morning.   

All told, the Dow ended the session up a sizzling 186 points; the Standard and Poor's 500 Index added 22 points; and the NASDAQ pushed ahead by 36 points. Stellar gains also were booked by the Standard and Poor's Mid-Cap 400 and the small-cap Russell 2000. The advance-decline ratio likewise was positive, with the Big Board boasting three times as many winners as losers, while all 10 of the core market sectors rose on the day, with particular strength in the utility issues, the energy stocks, and the consumer cyclical group. It was clearly a good way to end a volatile week.

Now, we look ahead to a new five-day stretch on Wall Street and we do so with just a modest economic calendar before us, which will be headlined by Wednesday's critical report on retail sales for the month of July. A narrow 0.2% advance is expected. A similar increase had been recorded in June. Backing out the auto sector, to get the so-called core rate of retail spending for the month, the estimate is a bit higher, at a gain of 0.3%. Besides that report, the week ahead will feature data on business inventories, weekly and continuing jobless claims, imports prices, producer prices, and industrial production and factory usage. Small increases in the Producer Price Index, industrial output, and factory use are all forecast.

As to the stock market, today's action overseas is thus far nicely positive, as stocks in Asia, taking their cue from the cooling off in Ukraine and the strength in our market on Friday, pressed higher overnight, while equities are scoring nice gains in Europe so far this morning. As to our market, the futures are up nicely, with the S&P 500 Index sporting a gain of 11 points and the NASDAQ higher by 24 points with less than an hour to go before the start of the day's trading, presaging a stronger opening for stocks at that time.   - Harvey S. Katz

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