After The Close - The U.S. stock market opened notably higher this morning, and managed to extend these gains and hold onto them through the close. At the end of the session, the Dow Jones Industrial Average was ahead 176 points; the broader S&P 500 Index was up 17 points; and the NASDAQ tacked on 43 points, closing at a 14-year high. Too, the Russell 2000, a small cap index, traded up over 1% today, suggesting that traders were feeling less risk averse today. Market breadth was quite favorable, as advancing stocks outpaced decliners by a roughly three to one margin on the NYSE.

Essentially all of the major market groups pressed higher today, which was encouraging. There was leadership in the industrial issues, thanks to strength in some of the transportation names. The technology stocks also made progress, as the software issues pressed ahead. In contrast, the high-yielding utility group was quite weak today. Notably, traders may have been selling these defensive holdings, while rotating into some of the more dynamic names.

Over the past several sessions stocks have recovered much of the ground lost in the small pullback that took place in late July and early August. With the progress made today, the S&P 500 index is now about 1% below its recent 52-week high. It remains to be seen if the broad index can make a sustained move beyond this level, without encountering some resistance along the way.

Meanwhile, traders received limited economic news today. However, the NAHB Housing Market Index provided a reading of 55 for the month of August, which was a bit better than the figure many economists had been expecting. Tomorrow the news should pick up a bit. The Consumer Price Index for July is due out. We will also get a look at housing starts for July and the building permits for that month.

Finally, the corporate news was rather quiet today, now that the second-quarter earnings season has concluded. Nonetheless, retailer Urban Outfitters (URBN) is due to report its figures after the close today. That stock traded higher today. – Adam Rosner

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


12:15 PM EDT - Traders across the globe appear to be breathing a unified sigh of relief following an unsettling session on Friday. Namely, favorable reports after a meeting in Berlin between Ukraine and Russian foreign ministers over the weekend appeared to, at least temporarily, ease concerns over rising tensions between the two countries. France and Germany also attended the talks, and the latter’s Foreign Minister, Frank-Walter Steinmeier, was quoted to remark that “some progress had been made”.

Over on our shores, stocks received further support in the form of good news from the housing market. Specifically, the National Association of Housing Builders (NAHB)/Wells Fargo reported that sentiment among homebuilders rose in August to the highest level since January. The index reading for the month came in at 55, up two points from the prior month and topping analyst expectations by an equal amount. (Readings above 50 indicate a generally optimistic view of industry conditions.) Contributing to the view were healthy employment trends, mortgage rates that are still low by historical standards, and comparatively affordable home prices.

Traders will be looking for confirmation tomorrow with the government’s report on new home starts for the month of July, especially after June’s report indicated a nine-month low for this metric.

Also helping to lift investor spirits was a spate of merger and acquisition activity, the most notable of which was Dollar General’s (DG) $8.95 billion offer to buy Family Dollar Stores (FDO), topping a prior bid by rival Dollar Tree (DLTR).

Against this favorable backdrop, the major U.S. stock indexes are all trading at or near their highs for the morning as of noon in New York. The Dow Jones Industrials holds a slight edge, rising 160 points (or just under 1%), while the NASDAQ and S&P 500 are only fractionally behind the blue chips.

A quick check of the key European bourses as they approach their respective closes also reveals upbeat trading action across the board. Germany’s DAX leads the charge in today’s session, with a gain of 1.8%. France’s CAC-40 also bounced back strongly, rising nearly 1.5%, and London’s FTSE closed up just short of a 1% gain for the day. - Mario Ferro

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


Market Update - It's all coming up roses for the bulls today. To wit, following Friday's late comeback on Wall Street, which saw a mid-morning 130-point swoon in the Dow Jones Industrial Average whittled away to a closing deficit less than half that much, the equity market, on the heels of impressive gains in Europe this morning, has been forging ahead strongly to start the session today on our shores.

Now, some 90 minutes into the trading day, that blue chip index is up by just over 160 points; the NASDAQ is better by 40 points; and the Standard and Poor's 500 Index is in the black to the tune of 15 points. The small- and mid-cap indexes are doing even better on a percentage basis, with both the S&P Mid-Cap 400 and the Russell 2000 Composites each up by better than a full percentage point.

Moreover, all 10 of the leading equity groups are in the black, with particular strength being shown by the industrials. The energy and utility groups, albeit up, are lagging. All told, there are more than four times as many winning stocks as losing issues on the NYSE; the ratio is above three-to-one on the NASDAQ. The gains are coming as there is some perception that world tensions are easing just a touch in Europe. The escalation in strife in that part of the world had set the global markets up for an early swoon on Friday. A pickup in merger deals over the weekend also is boosting the spirits on Wall Street, as is often the case on a Monday. - Harvey S. Katz, CFA

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 SurveyEarnings news is quite light this morning, but there was some M&A activity over the weekend that investors should be aware of. Most notably, discount retailer Dollar General (DG) has made an $8.95 billion bid to acquire industry peer Family Dollar Stores (FDO). Family Dollar had already agreed to be bought out by fellow discounter Dollar Tree (DLTR) for $74.50 a share, but Dollar General’s offer equates to $78.50 a share. What will happen remains to be seen, but investors were encouraged by this latest news, pushing shares of DG and FDO nicely higher ahead of the bell. DLTR stock, on the other hand, is indicating a slightly lower opening this morning. Elsewhere, diversified manufacturer Ingersoll-Rand (IR) has agreed to pay $850 million to acquire assets from Cameron International’s (CAM) centrifugal compression unit. Cameron is a maker of flow and pressure control equipment and production control systems for the oil and gas industries. – 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 - It was essentially a tale of two halves for the stock market on Friday, and for a change, it was the market optimists who saw their day in the sun early, while the bears took hold later on in the session, and held much of that evolving edge into the close. Thus, by the end of the day and week, stocks were lower, albeit well up from their worst levels of the day, which had been suffered shortly after the noon hour on the East Coast.  

What turned things around for the recently befuddled bears was a sudden turn for the worse in the intensifying drama between Ukraine and Russia. Specifically, after it had appeared that this crisis was easing somewhat, and this perception had helped the bulls to essentially carry the day since the latter stages of the prior week, news came out that Ukrainian forces destroyed part of a Russian military unit that had been on Ukrainian soil. News of the military engagement broke in late morning on Friday, and all at once cast a pall over Wall Street.

To wit, the bears took over and within a matter of an hour, or so, a heretofore early gain in the Dow Jones Industrial Average of more than 70 points became a loss of more than 130 points, in all producing a negative swing of just over 200 points in that blue chip composite. The NASDAQ, meanwhile, which once had been up by some 30 points, quickly sank to a loss of some 25 points. In fact, at this tech-heavy composite's high for the day, the NASDAQ had been within three points of its best level of the year. Similar stories were woven on the other major indexes.

Meantime, the day had gotten started on a positive enough note, as investors were emboldened by reports noting a benign reading in producer prices, with that metric gaining just 0.1% in July, and with a report signaling a better-than-expected increase of 0.4% in July industrial production and an upward revision in June's output. Such data seemed to raise confidence that the economy, which had bounded ahead in the second quarter by 4.0%, would not slow its rate of growth down all that materially during the current stanza.       

Armed with these better results and with the appearance of some relative calm on the geopolitical front, stocks began the day with some strength, and we appeared headed for a second straight week of gains. But, as we noted, the flare-up in Eastern Europe once more affirmed just how vulnerable the market is to such ill tidings, especially from its lofty perch atop 16,600 in the Dow and 1,950 in the Standard and Poor's 500 Index.    

However, this news, although discomforting, especially in Europe, where Germany's DAX plunged by more than 3% at one point in Friday's session and to some extent here, did not fully take the measure of the market on our shores, and the afternoon brought a gradual diminution of the market's deficit. In fact, by the close, the Dow had erased much of the earlier 130-point drop, closing down a more modest 51 points. Meanwhile, the S&P 500 Index was flat; the NASDAQ actually managed to tack on a dozen points; but the small-and mid-cap indexes eased a bit. All things considered, it was a reassuring performance in the face of a very difficult global backdrop.

Now, going forward into a new week, we find that the markets were mixed in Asia overnight, but are gaining ground in Europe so far this morning, boosted on the Continent by some perception that the tense situation between Russia and Ukraine might be easing back just a touch. And over here, our futures are surging ahead, to respective gains of 10 and 20 points in the S&P 500 Index and the NASDAQ. Our markets also seem to be benefiting from geopolitics, and also from some deal making across Corporate America.

Finally, this will be a fairly busy week, with data issuances on consumer prices and housing starts tomorrow, and existing home sales and the leading indicators on Thursday. Also, there will be a number of speeches by Federal Reserve officials, including words from Fed Chair Janet Yellen at the annual Jackson Hold WY meeting. That can always be a market mover. Our sense is that the Fed Chair will again take a dovish stance on monetary matters.   - Harvey S. Katz 

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