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After The Close - Stocks opened higher this morning, and despite a few brief pullbacks, managed to strengthen through the afternoon. At the end of the session, the Dow Jones Industrial Average was up 182 points; the broader S&P 500 Index was ahead 23 points; and the NASDAQ was higher by nearly 84 points. Market breadth was quite favorable, with advancers easily ahead of decliners on the NYSE. From a sector perspective, the technology and healthcare names moved sharply higher, while the energy and utility issues lagged the broader market.

The employment situation returned to the spotlight today. According to the Automatic Data Processing (ADP), 177,000 jobs were added to the private sector in the month of June. Analysts had been looking for a slightly higher figure. Further, initial jobless claims rose to 231,000 during the week of June 30th, where a better result had been anticipated. Tomorrow before the market opens, we will get a look at the government’s nonfarm payroll figure for the month. This release will be closely watched, especially given concerns about a rising interest-rate climate. 

In the corporate arena, few major corporations issued financial reports today. However, now that the second quarter has concluded, the pace should pick up soon. Of note, over the next few weeks traders will likely dissect the numerous earnings reports released, and pay close attention to the guidance provided for the remainder of 2018.

Technically, the stock market took a step back in the second half of June. As July gets under way, stocks seem to be stabilizing. However, much will depend on how the second-quarter earnings season unfolds, and on any major political developments in Washington. - Adam Rosner

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

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Before The Bell - Investors will shortly return to the daily grind on Wall Street following what we hope was a joyous and very safe Independence Day celebration. As to the market ahead of July 4th, stocks opened the holiday shortened second session of this abbreviated week nicely to the upside, with the Dow Jones Industrial Average quickly sprinting out to a gain of close to 150 points. The other key large-cap composites did well initially, too. The hopeful start came despite heightened fears of an intensifying trade dispute between the United States and a host of the major economies around the globe.

But that early sprint forward would be the high-point of the abbreviated session, as the major indexes soon started to give ground, finishing up the first hour of trading with reduced gains. The pullback would then continue over the balance of the morning, so that as the noon hour arrived on the East Coast, the Dow, the S&P 500 Index, and the NASDAQ were all modestly lower. With just one hour to go before traders broke for the July 4th holiday, it appeared as though the market might suffer no worse incremental losses. However, unlike most previous sessions, including this past Monday, there was no late buying. In fact, stocks fell further on Tuesday.

The selling, which, as noted, accelerated in the final hour ahead of the 1:00 PM (EDT) close, would leave the latest equity session with rather large losses. The unloading of stocks would leave the technology sector holding somewhat formidable losses on the day. In all, the Dow would close with a loss of 132 points, leaving that blue chip composite near its session lows. Losses of 13 and 65 points were suffered by the S&P 500 and the NASDAQ. But the small-cap indexes managed to retain modest gains, as that group often lags somewhat on the way up and down.

In contrast to the weak close, stocks had rallied earlier in the day, climbing nicely as energy stocks jumped after the WTI oil futures had ascended the $75-a-barrel mark in New York dealings. That was nearly a four-year high. But crude could not sustain its early gains, falling back as the session wound down. But it mainly was concern over trade issues that vexed traders. Those worries led to setbacks among the trade-sensitive companies, such as Caterpillar (CATFree Caterpillar Stock Report). Some tech names, such as Apple (AAPLFree Apple Stock Report), also sputtered. Market pundits sense that as the trade rhetoric steps up, further selling could be forthcoming in the days to come.

Looking ahead, the Administration is set to activate new tariffs on goods made in China tomorrow. That likely will engender some response from that nation, which is how trade wars get under way. Other nations could soon get into the act, as hard feelings now exist with our other trading partners, including the European Union, Canada, and Mexico. In other news, the Street is looking ahead to data today on non-manufacturing activity. On Monday, investors were greeted with upbeat tidings from the manufacturing arena, with that key survey showing further solid improvement in several industrial categories.

However, the big news will be on Friday when the Labor Department reports on June payrolls. Estimates made at the start of this week noted that a payroll gain of 195,000 was forecast for June, down just moderately from May's 223,000. That tally, meantime, is subject to revision. Also, forecasts, taken on a separate survey, are expected to show that the nation's unemployment rate held steady at 3.8% last month. The trade deficit for May is also due out tomorrow. Here, too, some nice improvement is in the forecast. But unless there are major surprises in the data, trade issues are likely to be the main determinant in the market's performance.

Now, in the post-July 4th session, we see that stocks were trading with losses in Asia in the overnight hours, while in Europe, the major bourses are now in the plus column. Also, yields on the 10-year Treasury note, which dipped to 2.84% in dealings on Tuesday, are now passing hands at a yield of 2.86%. Oil prices, meantime, which gave ground on Tuesday, are now up even as the President tells OPEC to lower prices and the U.S. equity futures are pointing to early gains after the July 4th break. – Harvey S. Katz, CFA

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