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After The Close - The major stock market averages edged higher to end trading for the first full week of August. At the close, the Dow Jones Industrial Average rose 14 points, but finished under the 22,000 level first breached a week earlier. Meanwhile, the NASDAQ outshined the Dow on a percentage basis, climbing 40 points despite a poor day from one of its star performers over the past year, Nvidia (NVDA).

Elsewhere, the broad S&P 500 Index and the small-cap Russell 2000 each posted slight gains. Market breadth followed the lead provided by the major averages, with winners modestly topping losers on the New York Stock Exchange and the NASDAQ.

This morning’s business data provided a benevolent tone to the market early on when the Labor Department reported tame inflation at the retail level in July. That seemed to calm investors about the pace of potential interest-rate increases on the part of the Federal Reserve.

The Fed for years has been looking for the opportunity to normalize rates from the historic lows reached during the last recession, but low inflation has slowed its hand. There is still a possibility that the central bank will raise rates again in December, following two rate hikes in 2017 and one at the end of 2016. But presumably inflation will need to accelerate to justify the next move up.

While the view on interest rates broadly helped stocks, companies reporting earnings provided less excitement in some cases, particularly in the downtrodden retail sector. J.C. Penney (JCP) shares fell to their lowest level in many years after the company turned in a wider loss than anticipated.

In the tech sector, Nvidia (NVDA) shares fell sharply after the company noted slowing growth in its line that serves artificial intelligence applications. The stock has been one of the NASDAQ’s leaders in the past year, but its troubles today did not hurt the rest of the big tech names. In fact, the technology sector was the best gainer among the market’s major sectors in the latest session.

In other sectors, a slight rise in oil prices didn’t do much for energy-related shares. NYMEX oil quotations climbed $0.23 a barrel to $48.82 after the weekly Baker Hughes (BHGE) rig count suggested drilling activity was stabilizing. But less-than- $50-a-barrel still means investors believe there is plenty of oil to go around. -  Robert Mitkowski

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

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12:10 PM EDT - Stocks started the day near their low point for the week, amidst ongoing sabre rattling between the U.S. and North Korea, but trading so far today has remained on the positive side.

Investors at least got one glimmer of good news to start the day, as the Labor Department’s latest reading on the Consumer Price Index showed inflation tracking below expectations. That, along with yesterday’s reported dip in producer prices, appears to have raised hopes that the Federal Reserve may reconsider its current plans to tighten the monetary reins.

As we approached the noon hour in New York, the Dow Jones Industrials were up 35 points, thanks to sizable gains from the likes of Apple (AAPL Free Apple Stock Report), McDonald’s (MCD Free McDonald’s Stock Report), and Home Depot (HD – Free Home Depot Stock Report). The broader S&P 500 stock index was tracking very closely, percentage wise, tacking on five points, while the tech-heavy NASDAQ was leading the pack, up 24 points, or almost half a percent. Looking at the sector breakdown, just over half of the major groupings were in the green, led by healthcare and telecommunications issues, each up by about half a percentage point. On the other side of the ledger, basic materials and utility issues were in the red column by a similar degree. Elsewhere, oil prices were also down about half a percent, while gold was showing a modest uptick.

Checking the European bourses, stocks there were mostly well entrenched in negative territory as the closing bells approached. The U.K.’s FTSE and France’s CAC-40 didn’t stray far from where they started the day, each sustaining a loss of about one percent. Germany’s DAX managed to buck the trend, however, with a late day rally bringing that index to around the breakeven point.

To be sure, stocks across the globe would have to stage an impressive rally to wipe out losses from earlier in the week, however geopolitical tensions (including reports this morning suggesting that China is set to intervene in the event the U.S. initiates any action) will likely keep a lid on things in the near term. - 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 - Following modest market declines late Tuesday and again on Wednesday, due almost exclusively to a buildup in tensions between the United States and North Korea, Wall Street began yesterday's session on a more decided down note, with escalating tensions with that emerging nuclear entity once more front and center. To wit, within a few minutes after the open, the Dow Jones Industrial Average had fallen by more than 100 points. Losses also were inked by the other large-cap indexes, as well as by the S&P Mid-Cap 400 and the small-cap Russell 2000.   

The selloff increased after the first half hour, with the Dow falling back 150 points, in a broad decline taking in all groups, but with particular weakness in the technology, financial, and consumer cyclical stocks. Keying they drop were sharp setbacks in shares of Apple Inc. (AAPL Free Apple Stock Report) and Goldman Sachs (GS Free Goldman Stock Report). Conversely, the early part of the day saw an additional climb in gold, often viewed as a safe haven in times of market duress. All the while, earnings continued to be released, with the retailers front and center. Here, some companies were outperforming, though Dillard's (DDS) did poorly, and that stock and others in the group, tumbled.
    
The stock market then stayed lower through the rest of the morning, with the NASDAQ continuing to lead the large-cap retreat, on weakness in technology. Although the market did pare its worst losses of the morning, there were some dramatic declines, once again, among individual stocks, as earnings season, while a good one, overall, has had outliers that have been treated harshly. With stocks so high these days, it does not take much to erode sentiment. Meantime, as we headed to the noon hour on the East Coast, stocks were still lower, with the Dow and the NASDAQ off by 130 points and 83 points, respectively.

The equity market drifted still lower, for a time, as the afternoon unfolded, with the Dow falling to a loss of more than 170 points at one stage. The NASDAQ's loss swelled to well over 100 points, a much higher percentage, while losing stocks swamped winning issues to the tune of some six to one in mid-afternoon. As to other influences, in addition to North Korea and earnings, the Labor Department reported early in the morning that the Producer Price Index had eased by 0.1% in July--a 0.2% rise had been the forecast--after a 0.1% uptick in June. Wholesale inflation clearly is not now a concern.

Things stayed range-bound at notably lower levels as the afternoon progressed, with concerns about the geopolitical backdrop remaining the major depressant on this comparatively light economic news day. Still, there were times when bouts of aggressive buying took place, followed by subsequent aggressive selling. Then, as the last half hour moved along, some intense selling took hold, driving the averages down to their worst levels of the day. The aforementioned concerns about the escalating standoff with North Korea was clearly the major reason for the downdraft.  

As the final bell sounded, the Dow had fallen back 205 points; the S&P 500 had shed 36 points; and the NASDAQ had fallen by 135 points, or 2.1%. Near 2% setbacks also were sustained by the S&P Mid-Cap 400 and the Russell 2000. Breaking the market down further, nine of the ten leading equity groups fell on the day, with some, such as technology, really hit hard. In all, that sector lost more than 2%. Also, losing stocks continued to overwhelm winning issues on the Big Board and the NASDAQ. There was no place for the bulls to hide. Worse, the VIX, known as the fear gauge, jumped an alarming 44%.   

Now, the $64,000 question is whether or not the bulls can make a stand here. For some hint of the day ahead, we look at action in Asia overnight, where the key indexes were off notably. In Europe, meantime, the bourses are tracking lower, as well, so far this morning. Elsewhere, oil, after a fall yesterday, is down a little; Treasury yields, off again yesterday in a flight to safety, are lower again; and gold, another safe haven, is trading up $7.00 an ounce and closing in on $1,300. Finally, our futures, off a couple of hours ago, are now edging a bit higher, suggesting a slightly stronger opening when trading resumes at 9:30 AM (EDT).

Finally, in news issued within the past hour, the Labor Department reported that the Consumer Price Index had increased by a scant 0.1% in July, half the increase forecast, and another weak inflation metric. This disinflationary result followed by one day the aforementioned slight dip in Producer Prices. This one-two punch likely will encourage the Federal Reserve to show some restraint when it comes to tightening monetary policy in the months to come. - Harvey S. Katz

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