Loading...
 

After The Close - The U.S. stock market put in a constructive session today. At the close of the day, the Dow Jones Industrial Average finished up 76 points; the broader S&P 500 Index was ahead 10 points; and the technology-laden NASDAQ was higher by 19 points. Market breadth was mildly favorable today, as advancing stocks outnumbered decliners by a narrow margin on the NYSE. Almost all of the market sectors made progress. Specifically, the energy group pressed ahead; the financial issues also performed quite well. In contrast, the basic materials names lagged a bit, while the technology sector struggled to keep pace with other equity groups.

Technically, stocks have staged a steady rally through much of August. Today, the S&P 500 Index managed to touch the 2,000 mark, but ultimately closed just below this widely-watched area. It remains to be seen if the bulls can push stocks through this price barrier, without encountering some significant resistance.

Meanwhile, traders received limited economic news today. Specifically, new home sales came in at 412,000 units, annualized, for the month of July. This reading fell short of the June figure, and was also somewhat lighter than most economists had expected. We will get additional information on the state of the housing market tomorrow, as a couple of major services will be putting out housing price data. Too, the Conference Board is set to issue its August consumer confidence figures. 

Finally, traders received some merger and acquisition related news this morning, and that may have helped lift sentiment. Specifically, Burger King Worldwide (BKW) shares traded higher on reports that the fast-food restaurant is interested acquiring Canadian company Tim Horton’s (THI). That stock also gained. - Adam Rosner

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

-

12:05 PM EDT - The U.S. equity markets opened to the upside today and have maintained that trend throughout the morning. The positive mood appeared to be inspired by a solid uptick in the European bourses and more developments on the merger and acquisition front. Regarding the latter, the big story was Burger King Worldwide’s  (BKW) announcement that it would be acquiring Tim Horton’s (THI). Shares of both companies were up in excess of 16% in late-morning trading.

Also of note, the upbeat mood of the markets was undisturbed by the latest report on new home sales. Specifically, the Commerce Department said that July’s sales of new single-family homes marked a second-straight month of decline, coming in at the lowest level since March. This was in contrast to previously reported positive numbers for housing starts and sales of existing homes.

However, there was some upside to the Commerce Department’s report. Namely that the number of homes available for sale had increased 4.1%, to 205,000 units, marking the largest inventory on hand in four years. Also, price increases had moderated which, combined with increased availability, should help boost sales in the coming months. Finally, June’s figures were revised upward to a decline of 7.0%, versus the 8.1% drop originally estimated.

Against this backdrop, the major U.S. indexes are all trading just slightly below their highs for the morning, each showing gains of around three-quarters of a percentage point as we pass the noon hour in New York.  The S&P 500, it should be noted, climbed to a new intraday record shortly after the opening bell, crossing above the 2,000 mark for the first time.

Taking a look at the European markets, stocks there are sharply higher, with a big boost attributable to recent remarks by European Central Bank President, Mario Draghi, which hinted at the possibility of additional stimulus measures. As the major bourses approached the end of their respective trading sessions, France’s CAC-40 was leading the charge higher with a gain of 1.9%, while Germany’s DAX was not far behind with an increase of 1.7% increase. (London’s market was closed for a holiday.) – Mario Ferro

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

-

Stocks to Watch from The SurveyIt was a busy weekend on the M&A front. Most notable, restaurant operators Burger King Worldwide (BKW) and Tim Hortons (THI) confirmed that they are in the midst of merger negotiations. An effort to reduce Burger King’s tax bill appears to be at least one of the motivations for the talks, as the combined company (assuming a deal is reached and then approved) would be headquartered in Canada, where Tim Hortons is currently domiciled. Investors on both sides of the potential transaction cheered the news, and BKW and THI are soaring in the premarket, as a result. The stock of ANN Inc. (ANN) is also getting a boost this morning, after a pair of activist investors sent a letter to the apparel and accessories company, urging it to explore strategic alternatives to increase shareholder value.  

It’s a quiet day for earnings news, although OSI Systems (OSIS) did report solid June-period financials. Shares of the manufacturer of electronic systems and components are moving nicely higher ahead of the bell, in response. – 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, which came storming into Friday's session on the strength of two weeks of almost uninterrupted advances, ran into some minor profit taking. There was no big setback, to be sure, and there even was some selective buying, especially on the NASDAQ, which had been among the weaker performers during the penultimate week of August. All told, it was an uninspiring end to a better week, but little damage was inflicted.

Meanwhile, the genesis of this modest profit taking was a somewhat more hawkish monetary stance assumed by normally dovish Federal Reserve Chair Janet Yellen. Ms. Yellen, speaking at the global economic and monetary conference held at Jackson Hole, WY said that the economy was improving but that the Fed was awaiting more evidence about the health of the labor markets before deciding when to start raising short-term interest rates. Her position, albeit only slightly more hawkish, was largely neutral. Still, it was a little disconcerting to some traders.

Also, there was some uncertainty again thrown into the Russia-Ukraine situation, and that renewed heating up of tensions over in that troubled part of the world helped to take the measure of Europe's bourses before the start of trading on our shores. As before, that standoff was being felt less over here due to the greater proximity of the Western European nations to that area. The focus on the Fed and the global situation was logical given the paucity of economic news here and the winding down of earnings reporting season. The strong showing by Wall Street over the past fortnight also made the market vulnerable to even the hint of disquieting news.

Thus, equities danced around the neutral line for much of the session, with the Dow Jones Industrial Average lower for almost the entire session, while the NASDAQ made modest strides, as did the small- and mid-cap indexes. However, as the afternoon wore on, a more definitive downtrend set in, most notably on the Dow. Also, most of the 10 market groups gave ground, with the few that were higher in the afternoon, being barely in the plus column. Among the more notable losers were the basic materials stocks and the energy issues. Still, even with this spotty end-of-the week showing, the major averages posted gains for the five-day span, with the Standard and Poor's 500 Index edging up to within a handful of points of the 2,000 mark, before slipping back slightly in the late afternoon.    

All told, the week's final session ended with the Dow off 38 points; the Standard and Poor's 500 Index down four points; but the tech-heavy NASDAQ ahead six points, setting another 14-year high in the process. The small-cap Russell 2000 Index also ticked a bit higher. Mirroring the uneven tone to the day's action, there were more losing stocks than winning issues on the Big Board, with the reverse being true on the NASDAQ. It was an uninspiring end to a solid week on Wall Street for the bulls.   

Now, looking ahead to a new week, we will be getting news this morning on sales of new homes during July. That issuance is the third of the three key metrics on the housing sector, and follows prior upbeat releases on housing starts and sales of existing homes. Here, a modest gain is the expectation. Also of note, we are due to get monthly data tomorrow on durable goods orders and consumer confidence. The former metric is expected to post a strong gain, buoyed by healthy increases in airplane orders. Those metrics will then be followed by the revised second-quarter report on the nation's gross domestic product on Thursday, where a similar reading to the initial 4.0% gain is the consensus forecast. Also, we are due that day to get weekly jobless claims figures and an issuance on pending home sales. The week then will conclude with reports due out Friday on personal income, personal consumption expenditures, and consumer sentiment. So, it figures to be a comparatively busy week on the business front, but a slow one on the earnings side.

As to the world's market overnight and this morning, stocks in Asia were largely mixed, but with some strength in Japan. In Europe, though, the principal bourses are mostly higher, led into the black by gains on order of 1% in Germany's DAX and France's CAC-40. However, the London FTSE 100 is no better than flat at this hour. As to our futures, they are up notably, with the S&P 500 futures ahead by seven points and the NASDAQ futures higher by 18 points. Notably, the S&P 500 Index would seem poised to break through 2000 once trading begins in less than an hour from now.       

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