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After The Close - The U.S. stock market got off to a positive start this morning, and managed to advance further through the afternoon. At the close of the day, the Dow Jones Industrial Average was ahead 81 points; the broader S&P 500 Index was up 10 points; and the technology-laden NASDAQ was higher by 19 points. Market breadth showed broadbased participation today, as rising issues outnumbered decliners by a healthy margin on the NYSE. Most market sectors logged gains. Specifically, the energy group put in a good session. Too, the high-yielding utility issues pressed ahead, after a weak performance yesterday. Meanwhile, the basic materials issues lagged, with weakness in some of the precious metals names.

Technically, stocks continue to rally, building on several days of gains. Today’s move higher puts the S&P 500 Index within striking range of new high ground. This will likely be the next target for the bulls. However, given the run in equities that we have seen lately, a move higher still may not be easily achieved.

Meanwhile, traders received some constructive economic news this morning. Specifically, the housing market seems to be gathering steam. Housing starts came in at 1.09 million units, annualized, in July. This result was up nicely from the June figure and easily surpassed expectations. Notably, many economists were encouraged by a strong rebound in the construction of single-family homes, as well as the ongoing strength in the multifamily market. Furthermore, building permits for the month showed considerable progress and that is a positive indicator. No doubt, investors were pleased with the news, as the home builders index rose over 2% today. Elsewhere, it seems that inflation is under control, at least for now. Specifically, the Consumer Price Index increased just 0.1% in July, which was in line with the consensus view. Some may sense that with this latest report, the Fed may not feel any great urgency to raise interest rates.

Finally, there were a few important corporate reports released this morning. Dow-component Home Depot (HD - Free Home Depot Stock Report) put out a strong release, including encouraging guidance and that stock advanced nicely today. Too, Dick’s Sporting Goods (DKS) shares moved up, as investors were pleased with that company’s figures. - Adam Rosner

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


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12:15 PM EDT - The bulls appear to have once again taken over the reins of the equity markets, with a clear desire to make a run for a second up day in a row. In the absence of negative developments on the geopolitical front, traders have apparently been emboldened by today’s economic news. Specifically, the housing market came through with a much-anticipated (and hoped for) rebound in July, with housing starts up 15.7% versus June’s tally, and an even more impressive 21.7% compared to the year-ago figure. Also, building permits for July improved 8.1% sequentially and 7.7% year over year, hinting at the likelihood of continued strength in the months ahead for this key economic sector.

This morning also saw the release of benign news on the inflation front, with the Labor Department reporting that its Consumer Price Index notched up just one-tenth of a percent last month (down from the 0.3% advance tallied in June). This is welcome news for equity investors, as low inflation gives the Federal Reserve more leeway to take its time winding down its monetary stimulus program. Also supporting the case for equity investments, 10-year Treasury prices nudged up on the economic reports, knocking a few basis points off their yields which, coincidentally, hit a 14-month low last week.

Against this favorable backdrop, share prices are up nicely on our shores. The Dow Jones Industrials are leading the pack to the upside, with a gain of 60 points (0.35%). A good part of that can be attributed to Home Depot (HD - Free Home Depot Stock Report), whose shares were up nearly 6% on the back of better-than-expected second-quarter results and increases in full-year guidance. Meanwhile, the broader, and thus more representative, S&P 500 Index is right behind it, up 7 points (0.37%), while the tech-heavy NASDAQ has backtracked slightly, but still showing a gain of about a quarter percent at noon New York time.

The upbeat sentiment among market participants was even more pronounced across the Atlantic, with the key European bourses showing solid gains as trading wound down. Easing tensions between Russia and Ukraine likely played a large part in Germany’s DAX rising a full percentage point on the day, after jumping 1.7% yesterday. Elsewhere, London’s FTSE 100 moved up a little over half a percent, buoyed by a report that inflation in the U.K. eased slightly in July, while France’s CAC-40 showed a similar gain. - 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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Stocks to Watch from The SurveyRetailers, many of which have fiscal years that end in January, are starting to release July-period results, and today’s batch of reports is headlined by Dow-30 component The Home Depot (HDFree Home Depot Stock Report). The world’s largest home improvement retailer delivered better-than-expected sales and earnings in the July interim, thanks to a rebound in the spring seasonal business. Management also increased its guidance, and the stock is moving nicely higher ahead of the bell, in response, suggesting a 52-week high in the process. Wall Street also appeared pleased with quarterly financials and/or outlooks from apparel and accessories seller Urban Outfitters (URBN), discounter The TJX Companies (TJX), and athletic equipment retailer Dick’s Sporting Goods (DKS). Indeed, all of these equities are indicating higher openings this morning, as a result. 

Not all of the earnings news was upbeat, however, with the most notable disappointment coming from Elizabeth Arden (RDEN). RDEN stock is plunging in the premarket, after the cosmetics company missed the mark on both the top and bottom lines in the June quarter. Weak demand for celebrity fragrances was partially to blame.

In other news, shares of Aeropostale (ARO) are up notably ahead of the bell, after the struggling teen apparel and accessories retailer rehired former CEO Julian Geiger to take back his position in the corner office, effective immediately. – Matthew E. Spencer

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

Bell The Bell - Score one for the bulls--and in a big way, to be sure, as those perennial stock market optimists really hit the ground running to start the week yesterday. On point, after the stock market took a breather last Friday on geopolitical concerns regarding the escalating tensions between Russia and Ukraine, a diminution in such fears--at least for the moment--sent the bears scurrying for cover in the latest session.

Thus, our stock market, taking its cue from some stealthy gains in Europe in the hours preceding the start of the trading day on our shores, ran higher from the opening and never really looked back tallying another wire-to-wire win, a feat that already has been done a number of times this year, as the bull market rumbles on, in spite of the difficulties abroad and some occasional economic setbacks and uncertainties at home. 

As noted, the market started the day higher, and by mid-session all of the 10 major equity market groups were in positive territory, while gaining issues held a formidable lead over declining stocks--in the form or more than three to one on both the NYSE and the NASDAQ. It was just that sort of a start for the stock market following what had been a rather nasty pullback during the early hours last Friday. 

This rally then continued during the afternoon, as stocks remained in a holding pattern near the top of their range, with the Dow's gain getting as high as 177 points. The Standard and Poor's 500 Index, meanwhile, managed to get to an increase of 17 points, while the NASDAQ leapt to a gain of 43 points, which, too, was at its best levels of the day, securing yet one more 12-month high in the process, cresting above 4,500. That tech-heavy composite is now some 600 points from its all-time high set during the dot.com bubble of 2000.

Meantime, by the closing bell, all of the 10 major groups had pushed higher on the day, with just the utilities essentially treading water. The best gain was secured by the industrials. Moreover, advancing stocks held a wide plurality over declining issues, to the tune of some three to one on the Big Board and five to two on the NASDAQ. New highs also comfortably surpassed new lows on the day, as the key indexes moved somewhat closer to their best levels of the year. Encouraging for those long equities is the fact that the market, as noted, closed at just about its session highs. The VIX, or the fear gauge, meanwhile, sits at 12.32, which is within striking distance of its yearly low, suggesting that traders are rather complacent these days.

As to other influences besides the fractious geopolitical situation, stocks also were helped by a merger announcement in the retail space, as Family Dollar Stores (FDO) looks as though it will be bought by Dollar General (DOL). Family Dollar shares were up nicely on the news. Dollar General shares were just incrementally higher.              

As to still other items of note, the earnings calendar was light yesterday as reporting season is just about concluded. However, this morning, we have heard from building supplies and do-it-yourself retailer Home Depot (HD - Free Home Depot Stock Report). That Dow-30 component easily beat the consensus forecast and has proceeded to guide higher. In response, the blue chip, which closed at 83.59 a share, is indicating about a three-point advance at the opening. That presumptive gain would put the stock at a 12-month high. Most of the remaining companies on the earnings calendar, like Home Depot, are retailers with July-ending quarters.      

Finally, on the economic front, we have just had the release of a pair of core economic numbers. To wit, the Labor Department has reported that the Consumer Price Index edged up just 0.1% in July, which was in line with forecasts. That also was a lesser rate of increase than tabulated in June. Backing out energy and food, to get the so-called core CPI, we find that this metric, too, rose just 0.1%. Inflation, accordingly, remains muted, and this latest metric should not alter the Federal Reserve's thinking on interest rates and monetary policy. More on that score later this week as the Fed holds its annual get together at Jackson Hole, Wyoming.

At the same time, the Commerce Department reported that housing starts rebounded sharply last month, soaring 15.7% and reaching an eight-month high in the process, following a weak report in June. That gain would seem to suggest that the soft spot seen in recent months, may well be passing. As to the markets, the major indexes were all higher in Asia overnight, while stocks are pressing forward in Europe so far this morning, with particular strength now being shown in Germany, where any diminution in tensions in Ukraine is especially welcome, given the greater proximity relative to some other European powers. As to our futures, they, too, are pointing higher, with bond yields continuing to fall; in fact, the yield on the 10-year Treasury is now down to a minuscule 2.36%. That is hardly competition for stocks. - Harvey S. Katz 

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