After The Close - After opening higher, the majority of U.S. stocks extended their daily gains through Friday afternoon. The bullish momentum was driven by more positivity on the earnings front, as well as continued expectations that the Trump Administration’s policies will usher in a period of accelerated economic growth. Accordingly, each of the three major indexes set intraday trading highs, while advancing issues boasted a sizable 2.6-to-1 advantage over declining shares.
Since his election, President Trump’s proposed trade, infrastructure, and tax policies have propelled many equities to new all-time highs. The most recent news item driving averages higher is his promise to unveil an ambitious tax reform plan in the coming weeks. Like his plans to deregulate the banking industry, a dramatic overhaul of the corporate tax rate would likely be a boon for traders.
Turning to the economy, the Labor Department indicated that import prices rose 0.4% in January, a slight deceleration from the 0.5% rate in the prior month, but more than the expected 0.2%. Export prices continue to slow down, too, but were mostly in line with expectations. And the University of Michigan revealed a consumer sentiment reading that was below the anticipated level. Still, the broad-based rally was hardly swayed by this modest disappointment.
Meanwhile, domestic oil prices remained on the upswing today, gaining 1.6% on optimism that OPEC’s six-month drilling cap will be upheld. More than 90% of the proposed output cuts have been achieved through over a month of the agreement. This is well above the 60% adherence rate seen during the cartel’s 2009 accord. Some nations, including Saudi Arabia, are reportedly cutting more than their required sum thus far into the deal.
Ultimately, the indecisive trading pattern exhibited through Wednesday gave way to another late-in-the-week rout by the bulls. The NASDAQ was the best performing index. Helped in no small part by Apple (AAPL – Free Apple Stock Report), the tech-heavy grouping advanced 67 points (1.19%) over the five-day period. The S&P 500 and Dow Jones Industrial Average posted solid gains of 19 points (0.81%) and 199 points (0.99%). Next week, while some profit taking may mute buying activity early on, sustained positive earnings updates and political developments could help averages expand further. Stay tuned. – Robert Harrington
At the time of this article’s writing, the author did not hold any positions in the companies mentioned.
12:00 PM EST - Equities are moving up today, pushing the key averages to new high ground. As we pass the noon hour in New York, the Dow Jones Industrial Average is ahead 67 points; the broader S&P 500 Index is up six points; and the NASDAQ is higher by 15 points. Market breadth is favorable, with advancers nicely ahead of decliners on the NYSE. Most of the major stock groups are in positive territory, with clear leadership in the energy and basic materials issues. On a related note, the price of crude oil, now at about $54 a barrel, is firming up today, and that may be helping shares of companies serving this sector. In contrast, the consumer non-cyclical names and healthcare stocks are somewhat weak.
Traders received just a couple of economic news items this morning. Specifically, export prices rose 0.1% during the month of January, while import prices slipped 0.2% during the period. Further, the University of Michigan’s consumer sentiment survey came in with a preliminary reading of 95.7 for the month of February, where analysts had been looking for a slightly higher number.
Meanwhile, the fourth-quarter corporate reporting season is not yet over. We recently heard from Activision Blizzard (ATVI). That stock is soaring, after the computer and video game developer delivered a solid report. Too, shares of shoe manufacturer Sketchers (SKX) are moving up, in response to an encouraging release.
Technically, the stock market continues to forge ahead. More recently, traders seem to be optimistic that the new leadership in Washington will make a concerted effort to stimulate business. - Adam Rosner
At the time of this article’s writing, the author had positions in Sketchers (SKX).
Before The Bell - The stock market opened moderately higher yesterday, trying to build upon the momentum of the past three months. It then climbed further as the morning progressed. In all, the Dow Jones Industrial Average, which had moved back and forth in recent trading, rose by better than 100 points in the early going, while the other large-cap indexes, notably the S&P 500 and the NASDAQ, followed suit. The S&P 400, the benchmark mid-cap composite, meantime, also gained strongly, rising in the late morning by just over a percentage point, while the small-cap Russell 2000 advanced by well over a percentage point.
Also, gaining stocks took a formidable lead on declining issues at that point, with the Big Board showing some five stocks gaining for every two issues declining. Also, most of the 10 market sectors were holding onto nice gains at midday, with the energy, financial, and health care groups leading the way, after having been mostly weaker in recent weeks. Also, some down-and-out retailers, such as footwear and apparel giant and Dow component NIKE (NKE - Free Nike Stock Report), were on the march forward, with that issue gaining more than a point in value at that time.
Boosting the stock market, meantime, were comments from President Trump that he would give an announcement regarding potential tax cuts in the next few weeks. Lowering the overall tax burden on American business has been a core objective of Mr. Trump since the long election campaign got under way. In response, stocks rallied strongly, with the Dow, the S&P 500, and the NASDAQ all hitting intraday records at that point. Volume, however, was low, no doubt held back by the heavy snows blanketing New York City and much of the East Coast.
The solid advance then continued into the afternoon, with the Dow leading the way among the large-cap indexes, on those tax cut hopes. This latest announcement by the President seems to have lifted the market out of its tight trading range over the past couple of weeks. The market's upturn would then carry on for the rest of the session, with just minor profit taking along the way. At its peak for the session, the Dow was ahead by just over 150 points, climbing past 20,200 in the process.
At the close, that composite had retained 118 points of that advance. Healthy increases also were tabulated by the other two large-cap indexes as well as by the smaller cap indexes. At the vanguard of the advance late in the day were the energy and financial issues. In addition to the tax news, Wall Street also benefited yesterday from good economic news (in the form of another decline in weekly jobless claims) and solid earnings data. Not all the news was good, though, as shares of Twitter (TWTR) fell 12% on weaker revenues.
Now, the trading week concludes, with results in Asia up notably overnight, especially in Japan. Meanwhile, in Europe, the bourses are generally trending modestly higher, as are oil prices. Finally, ahead of additional data on earnings and consumer sentiment, our futures are suggesting gains are ahead for Wall Street. So, we could see additional records set when trading commences a bit later this morning. - Harvey S. Katz