After The Close - It was another case of a Monday/Tuesday reversal for equities today. Indeed, Wall Street cheered another mostly positive round of earnings news that included the latest quarterly results from six Dow-30 companies. Speaking of the Dow, the index of 30 bellwether companies was up nicely today, along with broader S&P 500 Index and the technology heavy NASDAQ. Overall, advancing issues led decliners by a wide margin on both the Big Board and the NASDAQ, to the tune of nearly three to one on the former.

Today’s move higher was rather encompassing, with the small- and mid-cap stocks even producing bigger gains than their large-cap brethren. The outsized advances in the broader small- and mid-cap markets are eye opening in that it signals that investors are still not shying away from adding risk to their portfolios. The S&P 500 Volatility Index (or VIX), which is also known as the “fear gauge,” fell to around 12 today after rising above 14 last Thursday on international concerns. Right now, it seems that investors are giving more credence to the positive quarterly results from Corporate America than the concerns about the escalating tensions in the Middle East and Ukraine—though it should be noted that any vicissitudes in sentiment about those two areas could change the mood on Wall Street in a New York minute, much like what happened last Thursday when a Malaysian airliner was shot down, resulting in nearly 300 fatalities. That said, the recent event-driven selloff on international concerns has produced some bargain-hunting opportunities for traders.

Speaking of the situation in Eastern Europe, reports have surfaced that the U.S. Department of Justice will release findings later today that show the aforementioned Malaysian airliner was shot down by a missile from a separatist Pro-Russia territory in Ukraine. The investment community will be interested to see if this leads to harsher trade restrictions against Russia from the United States and Europe, which could have a negative impact on the world’s financial and equity markets.

As noted, the latest batch of quarterly reports made for fairly pleasant readings, and we think was the main impetus behind the equity market’s rise. However, the day’s biggest news will come after the closing bell today when the investment community eagerly awaits the latest quarterly results from technology behemoth Apple (AAPL). Our sense is that investors will be most interested in the company’s near-term outlook, which will include the expected unveiling of its latest edition of the iPhone and more news on the soon-to-be-released iWatch. Fellow technology giant Microsoft (MSFTFree Microsoft Stock Report) also is scheduled to release its latest earnings after the closing bell. Shares of the latter finished relatively flat, while Apple stock gained modestly ahead of the releases. In a separate non-earnings event, shares of most of the major health insurers were higher today as two courts—one in Washington D.C. and the other in Virginia—issued contradicting rulings on the use of government subsidies under the Affordable Care Act.

Meantime, also helping the equity market today was another round of mostly encouraging economic news. Before the bell, we received the latest data on consumer prices, which made for a relatively tame reading on inflation. The report also did not stoke any talk that the Federal Reserve will need to act more quickly with regard to raising short-term interest rates. Then at 10:00, the National Association of Realtors reported that existing home sales in June were the highest in eight months. Tomorrow, meanwhile, will be a light day on the business beat, but the week will conclude with reports on new home sales (Thursday) and durable goods orders (Friday). - William G. Ferguson

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


12:15 PM EDT - The U.S. stock market got off to a decent start this morning, and has been able to extend its gains a bit. At just past noon in New York, the Dow Jones Industrial Average is up 71 points; the broader S&P 500 Index is higher by 12 points; and the NASDAQ is advancing 36 points. It should be noted that the Russell 2,000, a small cap Index, is up just over 1%, and that may be a bullish indicator as it suggests traders are willing to take on more risk. Market breadth is quite favorable, as advancing stocks are outweighing decliners by about three to one on the NYSE. Too, all of the equity sectors are participating in today’s move up. There are large gains in the healthcare, energy, and technology issues.  While still advancing, some of the consumer names are lagging.
Technically, the stock market has spent much of the month of July locked in a sideways trading range. However, with the recent move up, the S&P 500 Index is now at the top of that range, as it nears its 52-week high. Further, the broad-based index is also not too far from hitting the widely-watched 2,000 mark. For now, sentiment remains bullish, with the VIX declining 6%, to just under 12, today.

Meanwhile, traders received some supportive economic news this morning. Specifically, the Consumer Price Index rose 0.3% in June, which was in line with expectations. Based on this reading, there is likely little reason to worry about inflationary pressures, for now. Some may feel that this may influence the Fed’s monetary policy, as it suggests that the economy is not yet overheating. Elsewhere, the housing market continues to make progress. Existing home sales came in at an annualized rate of 5.04 million units in June, and housing prices continued to strengthen. Tomorrow will be a light day for economic news. Things pick up on Thursday, when we receive the weekly jobless claims, as well as the new home sales figures for June.

Finally, traders received numerous corporate reports to sift through this morning. For the most part, the results were encouraging. Too, M&A activity seems to picking up, and that may also help sentiment. - 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 wide open, and investors are digesting a slew of reports from high-profile companies this morning. The news was generally positive, helping to push the equity futures higher. One of the most upbeat releases came from restaurant operator Chipotle Mexican Grill (CMG), which easily topped Wall Street’s expectations for sales and earnings, as a menu price increase didn’t deter diners. In fact, sales surged during the period and management raised its forward-looking guidance. CMG stock is up sharply ahead of the bell, as a result. The same is true for shares of shoe company Crocs (CROX) and Sanmina (SANM), a provider of integrated manufacturing services to original equipment manufacturers in the electronics industry. Other stocks moving higher (albeit to a more modest extent) in the premarket on earnings news include cable television provider Comcast (CMCSA), industrial conglomerate United Technologies (UTXFree United Technologies Stock Report), pizza delivery company Domino’s (DPZ), snowmobile and all-terrain vehicle manufacturer Polaris Industries (PII), telecommunications heavyweight Verizon (VZFree Verizon Stock Report), and diversified chemicals manufacturer DuPont (DDFree DuPont Stock Report).

Conversely, investors were not as impressed with quarterly results and/or outlooks from entertainment content provider Netflix (NFLX), quick-service restaurant chain McDonald’s (MCDFree McDonald’s Stock Report), insurer Travelers (TRVFree Travelers Stock Report), beverage giant Coca-Cola (KOFree Coca-Cola Stock Report), motorcycle manufacturer Harley-Davidson (HOG), chipmaker Texas Instruments (TXN), tobacco company Altria Group (MO), and online securities broker TD Ameritrade (AMTD). Indeed, all of these stocks are indicating modestly lower openings this morning. – 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 weakened at the start of trading yesterday morning, and at the outset it looked as though it would be another blue Monday. In fact, with the geopolitical situation unwinding rapidly and fewer merger announcements than in some previous weeks, there were certainly reasons to sell. Moreover, there were no economic reports of note to dissuade the bears from making yet one more attempt to shake things up.

However, after Friday's strong advance, and the weak opening yesterday, stocks did not fall apart. Indeed, following an early drop of more than 125 points in the Dow Jones Industrial Average and a loss of some 25 points in the tech-laden NASDAQ, equities came storming back. True, not all of the damage was undone, and the market remained moderately lower. That said, though, the final tallies were not all that worrisome, and no basic trends were broken.

All told, the Dow made up about 60% of its early loss, ending the session off by just 48 points, while the NASDAQ fell only seven points, and the Standard and Poor's 500 Index edged down by just a handful of points. Thus, just a small part of Friday's stellar gains were offset. Still, advancers held a formidable lead over declining issues in a lusterless overall session to start the third full trading week of July.

Behind yesterday's initial plunge on a sparse news day were heightened tensions across the Middle East as the land war in Gaza continued in full force, while the situation in Ukraine and relations between our country and Russia eroded still further. Obviously, the geopolitical risks are growing by the day. Add to those concerns the fact that the stock market has recently forged a succession of all-time highs in the Dow, the S&P 500 Index, and the small-cap Russell 2000, with nary a break in between, and it is not hard to see why the market is remaining vulnerable to any disquieting news either at home or abroad.

Now, today, unlike yesterday, there is no shortage of news, either on the economic or earnings front. To wit, the government has just reported the latest figures on consumer prices (see below) and at 10:00 (EDT) this morning, the National Association of Realtors will issue metrics on June's existing home sales. A small increase is the expectation there. Add to that a flood of earnings data, as six companies in the Dow-30, alone, will report their latest quarterly results. There also will be some major names coming in with results after the close, including Apple Inc. (AAPL) and Microsoft (MSFT - Free Microsoft Stock Report).

Meanwhile, the government has just issued data showing that the Consumer Price Index rose by a moderate 0.3% last month, one-tenth of a percentage point less than the 0.4% gain tallied in May. However, inflation has ticked up the past three months, gaining, respectively, 0.3%, 0.4%, and 0.3%. The big swing factor was energy, which rose strongly for the second month in a row. In fact, prices at the pump surged even more strongly than in May. Nevertheless, all items less food and energy increased by just 0.1% last month--a third of the advance in May. And this so-called core CPI is what the Federal Reserve often focuses on for the most part. So no major change in direction is expected on that front.

Finally, after yesterday's sloppiness, the equity futures are poised to start the day notably higher, apparently on some expectations for earnings going forward and vague hopes that efforts to fashion a cease fire in the Middle East will prove successful. At this time, with less than an hour to go before the start of the new trading day, the S&P 500 futures are ahead by almost nine points, while the NASDAQ futures are in the plus column by some 21 points, following generally better results in Europe this far this morning.  - Harvey S. Katz

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