After The Close - It was a directionless day on Wall Street today, following last week’s fireworks. Our sense is the lack of major earnings and economic news—the latter will be quiet until the end of the week—along with some hesitation ahead of new Federal Reserve Chairwoman Janet Yellen’s first speech to Congress tomorrow—were the primary reasons for the lackluster activity. For much of today’s listless session, the spread between advancing and declining issues on both the Big Board and the NASDAQ was razor thin—though it did tilt a bit in the favor of the gainers as the trading session progressed. All day, it seemed that investors did not want to make a significant move ahead of the new Federal Reserve leader’s initial commentary on monetary policy (more below).

The major U.S. equity indexes, which did not stray too far from the neutral for much of the session, finished uneven. At the closing bell, the Dow Jones Industrials, which were off by as much as 60 points in intra-day trading, finished nominally higher; the NASDAQ ended the session nicely higher; and the S&P 500 Index, a broader index, finished relatively ahead slightly. The small- and mid-cap markets also were little changed. One area that was notably weaker today was the transportation sectors, with the Dow Transports off by as much as 1% at one point.

From a sector perspective, it should come as no surprise, given the lack of conviction on the part of traders, that the performance of the top-10 groups was mixed and did not provide any standout movers. On the positive side were the basic materials, consumer staples, and utilities issues. Conversely, those investors long energy and industrial stocks were mildly disappointed today. Within the basic materials sector, leadership came from the precious metals and mining stocks, while the consumer staples group was paced by the nonalcoholic beverage and food processing issues. Conversely, as noted, it was not a good session for the transportation stocks, and they had some company from their industrial counterparts in the defense and aerospace space.

The lethargic showing for equities was probably the product of most investors not wanting to make any additional major moves—especially after the aggressive push higher at the end of last week—ahead of what Ms. Yellen has to say to a House subcommittee tomorrow. Our sense is that investors would be most pleased to hear that the central bank will stay the course with regard to its bond-buying tapering, but leave the door open to providing a backstop if the economy were to hit an extended  rough patch later this year. Investors should also monitor what three new hawkish voting member on monetary policies, including Dallas Fed President Fisher, have to say. Their comments could have just as big an impact on the direction of trading as those of Janet Yellen, who most pundits believe will say that the lead bank plans to stay on the same course.

The market’s reaction to the commentary from the Fed leaders tomorrow will be heightened by the fact that Tuesday is expected to bring little in the form of noteworthy news on either the economy or earnings. On the latter front, investors should note that pharmacy giant CVS Caremark (CVS), telecommunications company Sprint Corp. (S), and tobacco manufacturer Reynolds American (RAI) will report their latest quarterly results tomorrow. - William G. Ferguson

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


12:35 PM EST - The U.S. stock market is putting in a mixed session today, as traders digest Friday’s impressive advance. However, at about noon in New York, the market is firming up, which suggests that there may be some hope for an afternoon recovery. The Dow Jones Industrial Average is off 21 points; the broader S&P 500 Index is down one point; and the NASDAQ, which is attempting to buck the downtrend, is up 13 points. Too, the Russell 2000 Index, which includes numerous small-cap names, was off quite a bit earlier, but now seems to be recovering. Market breadth suggests a neutral bias to the session, as winning shares are about even with losers on the NYSE. Strength can be found in the technology area, with leadership in the computer hardware makers. The healthcare names and utilities are also making strides today, as these issues tend to be defensive and do well in volatile markets. Meanwhile, there is considerable weakness on the energy side. The industrials, too, are slipping.

Technically, the market may have found some support late last week, as stocks moved higher accompanied by healthy trading volumes. Some follow through is still likely needed in order to lend credibility to the emerging rally. Nonetheless, it seems that sentiment has become a bit more bullish in recent days, as the VIX, which had recently climbed to over 20, is now down to just over 15. Further, while the fourth-quarter earnings season has been a bit disappointing, a few high-profile names have rallied sharply on decent reports, suggesting that there is still some leadership in the market.

Traders received no notable economic news this morning. Tomorrow will be light day too, with just December wholesale inventories due out. Things pick up later in the week, as we get look at retail sales and a report on consumer sentiment. Notably, two bright spots in the recovery have been a strong retail consumer, as well as a rebounding housing market, and these will continue to be important areas to monitor.

Meanwhile, the earnings reports continue to dominate the news. Today, we heard from toy maker Hasbro (HAS). That issue is up, even though the company put out a somewhat weak report. After the close, we will get data from Masco (MAS), a leading supplier of home-building materials. - 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 SurveyThe earnings calendar is rather light to start the week, but it heats up after the market closes today. In the meantime, investors are digesting fourth-quarter results from toymaker Hasbro (HAS), which delivered a lackluster report, as both sales and earnings missed the mark. The stock is down modestly ahead of the bell, as a result. Shares of McDonald’s (MCDFree McDonald’s Stock Report) are also moving slightly lower in pre-market trading, after the restaurant operator delivered better-than-expected global comparable-store sales (up 1.2%) for the month of January. However, comps fell 3.3% in the United States, as severe winter weather hurt the top line. Conversely, shares of Dick’s Sporting Goods (DKS) are moving nicely higher in the premarket, after the retailer of athletic clothing and equipment raised its January-period guidance.

In other news, after surging on Friday on the back of stronger-than-anticipated quarterly results, shares of bebe stores (BEBE) are in the spotlight again today, due to news reports indicating that the clothing retailer may be looking to put itself on the auction block.

Finally, shares of Yelp (YELP) are indicating a sharply higher opening this morning, after the Internet company reportedly agreed to partner with industry peer Yahoo! (YHOO) to include Yelp’s content in Yahoo’s search results. YHOO is up modestly ahead of the bell. – 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 - Make it two in a row for the bulls, as those intrepid stock market optimists, who have been without a notable string of winning sessions thus far this year, appear to now be finally in the midst of just such a multi-session advance.

To wit, after an up-and-down first four days of last week, which were highlighted by a 326-point plunge in the Dow Jones Industrial Average on Monday, a pair of volatile, but largely directionless days during the middle of the week, and a strong advance on Thursday, which had been buoyed by stellar corporate earnings and a sizable drop in jobless claims, were at last able to put a potent winning streak together to end the week. Of note, after starting the final day of the week strongly to the upside, in spite of a somewhat disappointing employment report, traders and investors kept on buying, finally ending the session and the week with eye-catching gains.

All told, and notwithstanding a ho-hum job creation performance in January, the Dow Jones industrial Average added 166 points, closing just below the 15,800 level; the NASDAQ jumped 69 points; the Standard and Poor's 500 Index rose 24 points; and the S&P 400 Mid-Cap Composite soared 14 points, or just over 1%. This late rise put the Dow, the S&P 500 Index, and the NASDAQ all in the plus column for the week, which was no small achievement given the large initial deficit that each had to overcome to achieve this modest cumulative improvement.

As to influences, there was the employment report. To recap, the nation added 113,000 jobs in January. That was better than December's 75,000, but it was well below the November total (264,000) and the consensus expectation for last month of about 185,000. But Wall Street seemed to largely accept this latest figures without missing the proverbial beat, as traders rationalized, and with some likely justification, that the run of harsh weather, including multiple snow storms across wide swaths of the country, and the record low accompanying temperatures during the month, kept some would be job hunters at home and induced many firms to postpone hiring, especially as a number of sectors saw some slippage in business activity.

Also in the report, there were some encouraging developments, such as a slight drop, from 6.7% to 6.6%, in the jobless rate, an increase in hours worked and in wages paid per hour, and, perhaps most important, the labor participation rate increased. It had fallen in December.

Additionally, the wave of corporate earnings continued, with a number of smaller and more volatile reporting companies posting better numbers than expected. Overall, fourth-quarter earnings season has been somewhat mixed, but there seems to be a late rush to tip the scales in favor of the bulls in this case. The latest rise in the market, meanwhile, has, for now, cooled talk of a correction, which is defined as a 10% price decline in the major equity averages. At its worst, the Dow, the weakest of the large-cap indexes, had fallen back by just over 7%. The loss in the Dow for the year now is a less-worrisome 4.7%; for the NASDAQ, it is just 1.2%.

Now, a new week begins, and we will continue to see a large number of earnings reports, although, now, the emphasis will be on the smaller companies, which often tend to report later in the cycle than their larger-cap brethren. As to the economy, the news for the week will be back ended. On point, there are no issuances of note today, tomorrow, or on Wednesday. However, on Thursday, we are scheduled to receive data on weekly jobless claims and retail sales for January. An unchanged reading is expected for this latter metric, as the aforementioned weather issues likely played havoc with the results here, as well. Then, on Friday, the Commerce Department will report on industrial production and factory usage for January. Modest gains are expected in this joint report.

As to the day ahead, U.S. equity futures are somewhat weaker this morning, albeit off of their earlier lows, as they await testimony from Janet Yellen, who took over as Federal Reserve Chairwoman on February 1st. Ms. Yellen will be giving her first semi-annual monetary policy testimony tomorrow to the House Financial Services Committee. She is scheduled to give testimony to the Senate on Thursday. In the past, Ben S. Bernanke, her predecessor at the central bank, would often give the stock market a boost with his testimony. We shall see the results of her efforts shortly. - Harvey S. Katz

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