After The Close - The final day of an active week on Wall Street initially had the looks of a mixed-to-better showing, but a pickup in selling late in the session even pared a good deal of the Dow Jones Industrial Average’s earlier gains. The move lower today was led by the technology heavy NASDAQ, which was hurt by weaker-than-expected guidance from chipmaking giant Intel (INTC - Free Intel Stock Report) after the close of trading last night. Joining the NASDAQ south of the neutral line also were the broader S&P 500 Index and the small-cap Russell 2000.

The Dow Jones Industrial Average, which ended the session modestly higher despite most of its components finishing in the red, got a good deal of support from nice showings by American Express (AXP - Free American Express Stock Report), Visa (V - Free Visa Stock Report), Chevron (CVX - Free Chevron Stock Report), and Exxon Mobil (XOM - Free Exxon Mobil Stock Report). In particular, a good quarterly performance from American Express sparked buying interest in the stocks of these two financial services providers, which held their gains nicely into the closing bell. The oil stocks were helped by an increase in crude prices on the New York Mercantile Exchange. The performance of those four blue-chips masked what was a mostly weaker performance for the index of 30 bellwether companies.

From a sector perspective, nearly all of the top-10 major sectors finished today’s session in negative territory, with three notable laggards. Selling was a bit more pronounced in both the consumer staples and consumer discretionary areas. Likely weighing on both groups was a bigger-than-expected decline in consumer sentiment this month. Specifically, The University of Michigan/Thomson Reuters Consumer Sentiment Survey’s overall index dropped from 82.5 in December to 80.4 in January, according to preliminary data. (Note that final data for the month will be released on January 31st.) The reading suggests that the public remains somewhat uneasy about economic conditions, with easing noted in the measures both for the current environment (down from 98.6 to 95.2) and future expectations (down from 72.1 to 70.9). The consumer stocks were also dragged lower by the performance of the homebuilders, which were weaker on what could be termed decent, at best, data on housing starts and building permits for the month of December. Another notable laggard today was the technology space, which was hurt by some of the bigger names, including the aforementioned Intel, as well as the shares of Apple (AAPL) and Microsoft (MSFT - Free Microsoft Stock Report).

Conversely, the industrial stocks were up modestly on the heels of this morning’s report on industrial production and capacity utilization from the Federal Reserve. The report was encouraging as it showed that industrial production, which tracks the output of all U.S. manufacturers, utilities, and mines, rose by a seasonally adjusted 0.3% in December. It, along with the noted decent housing data, was another indication that the U.S. economy remains on the uptick.

Looking ahead to next week, the markets will be closed on Monday in observance of Martin Luther King Day. But once traders return from the long weekend, they will be greeted with a plethora of earnings news from Corporate America, including the latest quarterly results from eight Dow-30 components. The economic calendar, though, will be light, with the only notable report coming next Thursday on existing home sales.   - William G. Ferguson 

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


12:20 PM EST - The stock market is putting in a mixed performance today. At just past noon in New York, the Dow Jones Industrial Average is up 48 points; the broader S&P 500 Index is down just about one point; and the technology-heavy NASDAQ is off six points. Moreover, advancers and decliners are essentially even, suggesting a somewhat directionless tone to the session. The major market sectors are also quite divided. There are gains in the basic materials stocks. Notably, these issues have been doing well lately, and may be getting a lift from a recovering global economy, and particularly improved demand for materials from Asia. The energy group is also making some progress. Crude oil has moved up slightly to $94.38 a barrel, and that may be helping related equities. Meanwhile, some softness can be seen in select consumer names. The technology sector is also a bit weak.

Technically, the S&P 500 Index showed some resilience earlier this week, and now seems to be consolidating again. It should be noted that even when the market has dipped, we have seen little in the way of panic selling that would indicate any major shift in sentiment. Still, the bulls do seem a bit fatigued, and it may take a few attempts to push stocks further into high ground. Given already elevated valuations, it is essential that fourth-quarter earnings reports meet or exceed expectations, and that guidance, too, is encouraging.

Investors received a small batch of economic news this morning. Specifically, housing starts for December came in at 999,000 units, annualized, which was in line with expectations. Notably, the December figure follows a particularly strong showing in November. Meanwhile, industrial production rose 0.3% in November, also matching the consensus view. Elsewhere, the consumer may be slowing down a bit. The preliminary reading for consumer sentiment for January came in at 80.4, which was lower than many had been expecting. The consumer plays a key role in the broad economy, so weakness here is never looked on well by traders.

In corporate news, the earnings reports continue to shuffle in. In the technology area, shares of bellwether Intel (INTC Free Intel Stock Report) are trading lower, after the chip giant released weaker-than-expected guidance. In energy, Schlumberger (SLB) stock is rising after that company issued a good report. Also, in finance, American Express (AXP Free AmEx Stock Report) is seeing its stock move up strongly following its report.  - 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 SurveyInvestors are going over earnings reports from a number of bellwether companies this morning. News was mixed on the financial front, as credit card behemoth American Express (AXPFree American Express Stock Report) and investment bank Morgan Stanley (MS) both delivered upbeat reports, causing the stocks to trade slightly higher in the premarket. However, results from fellow credit card issuer Capital One Financial (COF) and financial services company The Bank of New York Mellon (BK) did not impress Wall Street, and COF and BK are indicating modestly lower openings, as a result. 

Rounding out today’s docket of Dow-30 companies are chip maker Intel (INTCFree Intel Stock Report) and industrial conglomerate General Electric (GEFree General Electric Stock Report). Neither of those reports garnered warm receptions by investors, and both stocks are headed lower ahead of the bell, in response. The biggest disappointment, however, came in the form of a profit warning from cosmetics company Elizabeth Arden (RDEN), which said that December-period earnings would likely come in well below investors’ expectations. Consequently, RDEN stock is plunging in pre-market trading. – 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 - U.S. stocks headed modestly, but nervously, lower yesterday, on the heels of back-to-back scintillating wins for the bulls. Those earlier advances had lifted the Standard and Poor's 500 Index, the S&P Mid-Cap 400, and the small-cap dominated Russell 2000 to new all-time highs in the process. The Dow Jones Industrial Average, meanwhile, had been knocking on the door of its own record high on Wednesday afternoon. After yesterday's modestly weaker showing this latter composite is now a little further away from a new record closing high.   

On the whole, the bulls could not sustain that momentum yesterday, in large part because of disappointing developments among some high-profile companies, a pair of them domiciled on the Dow 30. On point, investment banking giant and Dow member Goldman Sachs (GS) posted little better than in-line results for the latest quarter, and that stock fell nearly 2% on the day, in response. Also, insurer and fellow Dow component UnitedHealth Group (UNH - Free UnitedHealth Group Stock Report) also issued its quarterly metrics to little investor applause, and that stock pulled back, as well. Taken together, those two blue chips played a large role in the 65-point setback in that blue chip index.

However, it wasn't just earnings that affected equity movements yesterday. It was other developments, too. Of note, on that count, Nu Skin Enterprises (NUS), which does business with China, is being investigated by that country's State Administration for Industry and Commerce. The stock, in response, fell more than a quarter in value on the day, and helped to pull down shares of Herbalife (HLF) by almost 10%, which also does business in China, albeit representing a very modest proportion of its overall revenues, and in a wholly different industry. Nu Skin shares are indicated a bit lower in the pre-market this morning.

As noted, trading was skittish, as investors await the normal quarterly event known as earnings reporting season. The usual flood of reports is starting to come in, with the aforementioned Dow components now being joined by a succession of key industrial and financial players across a number of industries. The heavy reporting will continue for the next fortnight, and be, along with the usual succession of monthly economic reports, and speculation about upcoming Federal Reserve monetary policies, among the main influences on market action through January. (The next FOMC meeting, which is likely to result in additional monetary tapering, is set for January 28th and 29th.)    

Yesterday's uncertain action does not really change much, given the shallowness of the selective decline, and the continuing frothy nature of the equity market at these elevated price levels. Our sense continues to be that the market is fatigued, notwithstanding the earlier fireworks this week. But these changes have been on both sides. To wit, the Dow had fallen by 179 points on Monday, before rising by 116 and 108 points, respectively on Tuesday and Wednesday. Accordingly, that blue-chip index's modest decline of 65 points yesterday was the first move in four sessions that did not exceed 100 points. Such up-and-down gyrations can at times occur in a market cycle when we are on the cusp of a fundamental shift in direction. But we have been down this road before and the bulls have always regrouped. The burden of proof, therefore, still is on the bears.     

Meanwhile, the other averages moved little on the day, with the S&P 500 Index off just two points, and the companion S&P 400 off less than two points. Moreover, the NASDAQ, buoyed by selective strength in the tech area, actually added almost four points. On the whole, it was a mixed to slightly lower day.

Looking ahead, we will get a number of additional earnings reports today and next week, along with key economic data, with the Commerce Department issuing its monthly figures on industrial production and factory use at 9:15 (EST) this morning. Small gains in each series is the consensus forecast. As to the global equity markets, they were mostly lower in Asia overnight, but are trending a bit higher in Europe thus far this morning. On our shores, the S&P 500 futures are two points to the good, while the NASDAQ futures are suggesting a better opening as well, as they sport a nine-point advance. – Harvey S. Katz

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