After The Close - The stock market opened higher this morning, pulled back near mid-session, but finished with mixed, and even constructive, results. At the end of the session, the Dow Jones Industrial Average was off 44 points. However, the broader S&P 500 Index advanced five points, and the technology-heavy NASDAQ added on 28 points. Market breadth was mildly favorable, as advancing issues outnumbered decliners by a decent margin. Further, most of the major market sectors made progress. Strength could be found in the high-yielding utilities, even as these issues have been lagging for some time. Select consumer names also held up well. Further, the energy stocks showed some leadership, with gains in the exploration and production stocks. In contrast, the basic materials issues lost some ground, due to losses in the metals and coal issues. However, it should be noted that the aluminum stocks did quite well.
Technically, the S&P 500 Index continues to move in the sideways range that it has been locked in for much of the month of January. Given the large gains logged over the past year, it is not unusual that the market would take a pause, at least temporarily. The fourth-quarter earnings season has just kicked off. So far the results have been mixed, and have not been enough to push the major averages sharply higher. Although, it should be noted that many companies have yet to report.
Investors received no notable economic news today, and that may have added to the session’s somewhat frenetic, but directionless tone. Tomorrow also will be a light day for reports. However, things will pick up on Thursday, when traders will receive the weekly initial and continuing jobless claims data. Also, existing home sales for December are due out, along with a report on housing prices from the FHFA. Further, the Conference Board’s Leading Indicators are slated to be released on Thursday, as well. So, all in all, it will be a busy day.
In corporate news, there were a number of earnings reports released this morning. Even though the results were generally positive, this did little to move the market higher in any meaningful way. In the drug area, shares of Forest Labs (FRX) closed lower, even though that company released an encouraging report. In energy, Halliburton (HAL) stock also slipped, after that company issued decent figures. Elsewhere, Travelers (TRV - Free Travelers Stock Report) shares fell slightly after the insurance giant released a solid report. - Adam Rosner
At the time of this article’s writing, the author did not have positions in any of the companies mentioned.
12:00 PM EST - Stocks are continuing the divergent pattern that has been in place recently, with weakness in some large-cap Dow-30 names, but some slight strength elsewhere. To an extent, investors seem to be still digesting the stellar gains the market provided in 2013, and looking for clear signs for the way ahead. Right around the noon hour on the East Coast, the Dow Jones Industrial Average is off 110 points, falling precipitously in late morning, but the NASDAQ is up six points. On the bright side, the advance-decline lines for both the Big Board and the NASDAQ still show more winners than losers.
Wall Street got back to work today after being closed for yesterday’s holiday, and was greeted with a slew of earnings reports from a number of big-name companies, including several Dow-30 components. For instance, telecom giant Verizon (VZ - Free Verizon Stock Report) reported quarterly profits above expectations and also noted that it is buying, for an undisclosed price, Intel’s (INTC - Free Intel Stock Report) business division devoted to bringing along products and services on the “cloud”. Judging by the slight dip in Verizon’s stock price, though, the investment community was largely unimpressed.
Other reporting Dow components getting a thumbs down include Johnson & Johnson (JNJ – Free J&J Stock Report) and Travelers (TRV - Free Travelers Stock Report). Even so, the broader market tone is positive. One notable gainer is Baker Hughes (BHI) shares. The oilfield services provider turned in adjusted earnings above analysts’ expectations and provided some upbeat guidance.
More winners include the shares of Dow Chemical (DOW) and Alcoa (AA). Dow Chemical is up after news an activist investor is pushing the company to make a strategic review of its operations. Meanwhile, aluminum maker Alcoa’s stock is getting a lift from a brokerage house upgrade.
In other markets, oil is trading about $0.50 a barrel higher on the NYMEX, to above $94 a barrel. Frigid temperatures expected across the nation in the week ahead are a plus for energy demand. The government bond market, meanwhile is holding steady, even as the Federal Reserve is expected to continuing tapering its bond-buying program next week.
Heading into the afternoon session, there is a bit of subdued tone, with much of the East Coast feeling the early effects of what weather forecasters are saying could be a severe winter storm. That could send many Wall Street traders home early. - Robert Mitkowski
At the time of this article's writing, the author owned stock in Intel.
Stocks to Watch from The Survey – Earnings season is heating up, with fourth-quarter reports out from three bellwether Dow-30 components this morning. Indeed, medical supplies company Johnson & Johnson (JNJ – Free Johnson & Johnson Stock Report), telecommunications heavyweight Verizon (VZ – Free Verizon Stock Report), and insurer Travelers (TRV – Free Travelers Stock Report) all delivered solid results with earnings coming in above consensus expectations. The three stocks are moving slightly higher in pre-market trading, as a result.
Other stocks moving higher ahead of the bell on earnings news include airline operator Delta (DAL), oilfield services providers Halliburton (HAL) and Baker Hughes (BHI), securities brokerage company TD Ameritrade (AMTD), drugmaker Forest Laboratories (FRX), and Unilever (UL), one of the world’s largest producers and marketers of branded and packaged consumer goods.
On the M&A front, shares of Anheuser-Busch InBev (BUD) are indicating a modestly higher opening this morning, after the brewer agreed to acquire South Korea-based Oriental Brewery (a company it once owned) for $5.8 billion. – 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 - Wall Street will get down to business again shortly after a long three-day weekend, which included yesterday's observance of the birthday of the late Dr. Martin Luther King, and following an up-and-down session on Friday, which saw most of the leading equity averages, save for the 30-stock Dow Jones Industrial Average, work their way modestly lower on some uninspiring economic news and some mildly disconcerting earnings reports.
To recap, the equity market generally pressed lower last Friday, weighed down, as noted, by a series of lackluster earnings reports, especially from a pair of Dow components, namely industrial conglomerate General Electric (GE - Free General Electric Stock Report) and semiconductor stalwart Intel (INTC - Free Intel Stock Report). Both of the stocks edged lower, but did not succumb to a serious wave of selling as had some other companies posting listless metrics, or worse, earlier in the week.
Helping the Dow to post a 42-point advance and enable it to be an outlier of sorts, were solid price gains at two financial behemoths domiciled on that 30-stock blue-chip composite, American Express (AXP - Free American Express Stock Report) and Visa (V - Free Visa Stock Report). Elsewhere, the NASDAQ lost 21 points; the S&P 500 Index shed seven points; and the Dow Transports dropped 29 points. Losing stocks, meantime, beat out gaining issues by some 17-to-13 on the Big Board and by nearly a three-to-two count on the NASDAQ. Some spotty tech weakness was a primary driver of the NASDAQ setback.
Meanwhile, aside from earnings, data issued on Friday showed that housing starts had worked their way lower in December, with that setback occasioned, in part, we sense, by a spate of inclement weather across parts of the nation last month. Heavy snows and frigid temperatures also may play havoc with January's building performance. However, a report issued that same day affirmed that industrial production and factory utilization had risen modestly in December. Conversely, the latest reading on consumer sentiment left many bulls unimpressed, as that survey showed some unexpected weakness. Overall, though, the economy is performing rather well and the equity market, after some initial sloppiness during the first week, or so, of the new year, has begun to find its bearings somewhat.
Looking out to this this holiday shortened four-day stretch, there will be a comparative paucity of economic news, with only reports on the leading indicators and existing home sales of note. Both of those issuances will be forthcoming on Thursday, as will weekly figures on initial jobless claims and continuing claims. Lately, both have been trending lower. The month will then conclude next week with data on new home sales, consumer confidence, durable goods orders, fourth-quarter GDP, and personal income and consumer spending. We believe the key issuance will be the GDP report, which could see growth come in at roughly 3%. On the other hand, there will be no shortage of news from Corporate America, as fully eight Dow-30 companies are due to issue their quarterly revenue and bottom-line numbers. That should be a big influence on the ebb and flow of domestic stock prices in the days to come.
Meantime, as we look out to a new day and a new week following some hectic trading over the previous five trading sessions. To wit, that span saw four of the five sessions, save only for Friday, feature moves of 100 points, or more, on the Dow Industrials. Given the lack of many market moving economic reports this week, the precipitation for any repeat of such frenetic action likely would come from earnings, which, as noted, are due en masse in the days to come. As to the market in the day ahead, if investors stateside are looking to overseas trading for direction, they will find that stocks in Asia were generally higher overnight, with the Nikkei 225 up close to 1%, while equities are tracing a modestly bullish pattern in Europe thus far this morning, with Germany's DAX leading the way. As to our markets, the early read on the futures tells us that equities are poised to open the day notably higher, with the S&P 500 Index futures ahead by better than six points, while the NASDAQ is some 17 points to the good. As to other markets, oil is up a bit, but gold is off slightly. Among individual names, drug maker Forest Labs (FRX) is raising its sights on the year and that stock is indicating that it will gap higher at the open this morning. - Harvey S. Katz
At the time of this article's writing, the author had positions in INTC.