After The Close - Investors were taken on a bit of a rollercoaster ride today. The major equity indexes started the session to the upside, then shortly thereafter weakened considerably, before regrouping some in the final few hours of the trading day. Still, there was definite weak tone to trading, as declining issues outnumbered advancers by a significant margin on both the Big Board and the NASDAQ. The NASDAQ, the S&P 500 Index, and Russell 2000 all finished the session in the red, with the small-cap stocks suffering the biggest declines (more below). The Dow-30 on the strength of a few of its members was able to move slightly higher.

The investment community had an awful a lot to digest today. The corporate front brought the latest quarterly earnings results from three Dow-30 companies; fellow member Intel (INTC - Free Intel Stock Report) is scheduled to report after today’s closing bell. On the business beat, we received the latest data on monthly retail sales and a survey of economic conditions in the New York State area. And monetary policies and the Fed were again on the minds of traders, as Federal Reserve Chair Janet Yellen spoke before Congress this morning.

On the earnings front, the news was mostly encouraging. The investment community liked what it heard from JPMorgan Chase (JPM - Free JPMorgan Stock Report) and Goldman Sachs (GS - Free Goldman Sachs Stock Report) and bid shares of those two investment banking giants higher. The jump in JPMorgan Chase stock was a big reason why the Dow hit another high early in the session and was able to regroup after selling took place in the mid-morning hours, and why the financial stocks performed well today. Conversely, shares of Johnson & Johnson (JNJ - Free J&J Stock Report) were lower after the company announced that earnings beat expectations, but issued some cautious guidance; the latter news seemed to have the biggest impact on investors. Investors should note that of the six percent of the S&P 500 companies that have reported earnings, 63% have beaten expectations which is a good sign moving forward.

As noted, we did get some news on the economy and the data were mostly positive. Before the market opened on these shores, the Commerce Department reported that retail sales rose modestly (+0.2%) in June, though the growth was less impressive than the upwardly revised May gain of 0.5%. Then, the July 2014 Empire State Manufacturing Survey indicated that business conditions in the New York State area improved significantly for the third consecutive month for New York manufacturers. In all, the index climbed to its highest level in more than four years.

Meanwhile, the investment community was somewhat unnerved by comments from Federal Reserve Chair Janet Yellen before Congress. While Ms. Yellen told Congress that the central bank plans to keep providing considerable support to the U.S. economy to boost growth and improve labor market conditions, she also warned of increased signs of risk taking in stocks. She specifically said that valuations for stocks in smaller companies, as well as social media and biotech firms, appear to be stretched. Although the latter statements did not surprise anyone, they did appear to add some downside pressure to equities. In particular, the small-cap Russell fell sharply shortly after Ms. Yellen made her comments.

From a sector perspective, most of the top-10 groups were in the red. Not surprisingly, given the aforementioned Yellen comments, the healthcare and technology issues were the biggest laggards today. The consumer staples, discretionary, and energy stocks also were out of favor. Perhaps, the slightly weaker-than-expected retail sales data weighed on the consumer names. Conversely, there was some interest in the more-defensive telecom and utilities stocks. – William Ferguson

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


12:30 PM EDT - The U.S. stock market opened higher this morning, but pulled back in the first hour of the session. At about noon in New York, the major averages are still struggling. The Dow Jones Industrial Average is down 34 points; the broader S&P 500 Index is off nine points; and the NASDAQ is slipping 42 points. In general, there is a negative tone to today’s session, as declining stocks are outweighing advancers by roughly two to one on the NYSE. Most of the market sectors are in negative territory, with steep losses in the energy, healthcare, and technology names. In contrast, the financials and utility stocks are advancing modestly.

Notably, the stock market has been a bit choppy lately, even as it has managed to drift higher. The bulls remain in control, for now, but gains are hard to come by. Equity valuations are still quite elevated, and the fact that the market has advanced for some time without a major correction seems to be a concern to some. Much will depend on the quality of the corporate reports now being released in full force. Expectations have been high, making it important for companies to produce solid figures and encouraging guidance.

Traders received a mixed batch of economic news this morning. Specifically, retail sales increased 0.2% in the month of June. This showing fell somewhat short of expectations. Meanwhile, the economy in the New York region has been making progress. Notably, the Empire State Manufacturing Survey came in at 25.6 in July, which was far better than had been anticipated. Tomorrow will be a fairly busy day for economic reports. We will get a look at the Producer Price Index for the month of June. A report on industrial production is also due out. Too, the Federal Reserve will release its Beige Book summation of economic conditions.

Finally, investors received some earnings news this morning. In the financial sector, JPMorgan Chase (JPM Free JPMorgan Stock Report) shares are higher, after the banking leader put out solid figures. Goldman Sachs (GS - Free Goldman Sachs Stock Report) is seeing its stock rise on decent results, as well. However, Johnson & Johnson (JNJ - Free J&J Stock Report) shares are trading lower, even though that company issued a solid report. Later today, we hear from Intel (INTC - Free Intel Stock Report) and Yahoo! (YHOO). - 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 Survey The earnings floodgates are starting to open wider, as a host of high-profile companies (including three Dow-30 components) released second-quarter financials this morning. Financial services titans JPMorgan Chase (JPMFree JPMorgan Chase Stock Report) and Goldman Sachs (GSFree Goldman Sachs Stock Report) both delivered better-than-expected results, although revenues and earnings at JPMorgan slipped from a year earlier. Regardless, investors were pleased with the two reports, pushing both equities higher ahead of the bell. Medical supplies company Johnson & Johnson (JNJFree Johnson & Johnson Stock Report) also issued a solid June-period report and increased its guidance. JNJ is up slightly in the premarket. Wall Street was even more impressed with second-quarter financials and updated outlooks from shoe company Wolverine World Wide (WWW) and regional bank Comerica (CMA), and these stocks are indicating nicely higher openings this morning, as a result. Conversely, weaker-than-anticipated guidance from energy company Valero (VLO) caused the issue to fall in the premarket.

Elsewhere, on the M&A front, tobacco companies Lorillard (LO) and Reynolds American (RAI) have agreed to merge, in a move that was widely anticipated. However, terms of the deal, which call for Reynolds to pay $68.88 per share in cash and stock for Lorillard, did not seem to live up to Wall Street’s expectations, causing both stocks to move lower 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 - The stock market, fresh off of a disappointing week--which had seen the Standard and Poor's 500 Index and the NASDAQ put in their worst five-day stretch since April--began the latest five days notably to the upside with a triple-digit-point gain in the 30-stock Dow Jones Industrial Average for much of the morning session, getting as high as a 144-point increase at one time, and climbing to an intraday record in the process. That early strength was seemingly engendered by optimism that earnings reporting season, which will get under way this week in earnest, will be a fairly good one.

The stock market then held these compelling gains through first half of the trading day, with a rise of better than 130 points in the Dow seemingly the benchmark for much of the morning. Joining that blue-chip index to the upside was the tech-heavy NASDAQ, which pushed forward by more than 35 points in the morning. The other large-cap representative, the Standard and Poor's 500 Index, also pressed higher aggressively, gaining a dozen, or so, points early on.

To be sure, there was more than just some speculative optimism at work early, as financial services behemoth Citigroup (C) posted better-than-expected second-quarter results and unveiled a $7 billion settlement with the U.S. Justice Department. According to some pundits, it will be the banking system that will be a primary focus of the market this week, although technology will get its share of attention, as some big names from that sector will post their results this week.

Thereafter, the market held its gains into the afternoon, but did not build on that early strength, as if concerned about Corporate America's ability to come through. Investors also may have paused a bit as a number of key economic reports will be out this week, highlighted by data on retail sales for June (see below), industrial production and factory utilization (due out tomorrow morning), and housing starts and building permits set for Thursday before the market opens. Such reports, along with the release tomorrow afternoon of the central bank's Beige Book summation of economic activity across the country, also could play a large role in how the market performs over the next fortnight, or longer.

For now, though, the stock market continues to march higher, seemingly shaking off worries about the Middle East's evolving series of conflicts and a very recent worsening in the economic situation in Europe, where Portugal has experienced banking woes and we have seen a succession of somewhat softer economic metrics coming out of Germany, France, and Italy.

All told, after this early strength and a further rally into the close, the Dow finally settled in with a gain of 112 points. The NASDAQ, meanwhile, boosted by selective strength on the tech side, where, for example, an analyst upgrade of Apple Inc. (AAPL) sent that stock up to a new 52-week high, rose 25 points. Most of the 10 largest groups tracked higher, with some nice strength in energy, technology and the telecoms. Advancers, too, had their way with a large plurality over declining stocks on the day. It was a good way to start the week for the bulls.   
Now, a new day is upon us, and the early signs are positive, as stocks were generally higher overnight in Asia, led by a solid gain in Japan, while they are tracking solidly in the black in Europe so far this morning. And on our shores, the futures, after a softer start this morning, have turned moderately higher on some encouraging reports coming out of Corporate America. On point, we have seen a positive issuance from banking giant and Dow-30 component JPMorgan Chase (JPM - Free JPMorgan Chase Stock Report). That high-profile stock is advancing in the pre-market, in response. Also, we have seen compelling metrics from drug making and medical supplies stalwart Johnson & Johnson (JNJ - Free Johnson & Johnson Stock Report), but that blue chip is up just narrowly early on. A third Dow component, Goldman Sachs (GS - Free Goldman Sachs Stock Report) also reported solid results, but that stock seems to be responding somewhat better to its tally.

Finally, data issued just moments ago by the U.S. Commerce Department showed that retail sales also ticked higher in June, gaining 0.2%, a bit below expectations, but further presaging a decent end to the just-concluded quarter for the economy. Thus, things are looking up with just today's testimony before Congress by Federal Reserve Chair Janet Yellen perhaps standing in the way of further gains for the stock market. 

At the time of this article’s writing, the author held positions in one or more of the companies mentioned.