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After The Close - The U.S. stock market traded lower this morning, but ultimately closed off its session lows. This is likely constructive, as it suggests some underlying support for equities. At the end of the day, the Dow Jones Industrial Average was up three points; the broader S&P 500 Index was off slightly; and the technology-heavy NASDAQ finished nominally higher. Market breadth was divided, as declining issues outpaced advancers by a narrow margin on the NYSE. The market sectors were largely mixed. There were gains in the healthcare group, and the consumer non-cyclical names made strides. Meanwhile, the utilities and the industrials lost ground.

Technically, some stock market averages are currently near key levels. Notably, the Dow Jones Industrial Average is approaching the 17,000 mark. The S&P 500 Index has passed the 1,950 area, and the bulls are, no doubt, targeting 2,000. Meanwhile, the NASDAQ is not too far off its 52-week high, which is encouraging. Too, the Russell 2000, a small-cap index, is firming up. For now, it seems the rally has some staying power. However, the market has come a long way in a short period of time, and some consolidation would not come as a surprise.

There were few economic releases for traders to digest this morning. Specifically, wholesale inventories rose 1.1% during the month of April, which came in just a bit better than had been widely expected. Notably, a rise in wholesale inventories could suggest that businesses are anticipating healthy demand. Tomorrow, will also be a light day for reports, too, but things will pick up on Thursday.

Elsewhere, there were a few corporate releases worth mentioning. Shares of Radio Shack (RSH) plunged, as the struggling electronics retailer put out weaker-than-expected results. Elsewhere, in M&A news, shares of Chico’s FAS (CHS) were up on reports that that company may be looking for a buyer. - 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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12:10 PM EDT - The U.S. equity markets exhibited some backing and filling throughout the morning. In the wake of their continued march upward in recent sessions, the Dow Industrials, S&P 500, and NASDAQ all opened slightly below their prior-day closing levels. They then proceeded to dip, all reaching their lows for the morning around 10:00 AM New York time, but have since climbed back to make up most of that lost ground.

Investors were likely encouraged by a report from the Commerce Department which indicated that wholesale inventories were up more than expected in April. Specifically, inventory levels increased 1.1% for the month, compared to the 0.5% increase that was the consensus among economists. The upward move also matched the rise posted in March. The advance was important in that inventory levels play a key role in the calculation of GDP. Indeed, destocking was one of the reasons why GDP was revised to a negative figure for the first quarter. Thus, the increases for the last two reported months serve to bolster confidence in a rebound for the gross domestic product figure in the current quarter. In fact, the latest numbers may lead to an upward revision in the current consensus for GDP growth of around 3% in the June period.

Overall, as we crossed the Noon hour of trading in New York, the aforementioned indexes were all showing only fractional declines of about one-tenth of a percentage point. As such, it wouldn’t be much of a surprise to see a new push into record territory for the Dow and S&P 500 before the day is through.

Turning our attention to the European bourses, market action there was once again mixed, but the major exchanges all appeared to be converging as their respective sessions approached their closing bells. To wit, London’s FTSE opened at its high for the session, then spent the rest of the day trying to regain lost ground. Meanwhile, Germany’s DAX and France’s CAC-40 had modestly positive starts, peaked around midday, and then gave back some of their gains as trading wore on. As we approached 12:00 EDT, the latter two were holding on to fractional gains, while the FTSE was hovering right around the breakeven mark. – Mario Ferro

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

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Stocks to Watch from The Survey M&A speculation continues to drive select stocks higher this morning. Late in yesterday’s trading session, shares of International Game Technology (IGT) spiked due to news reports suggesting that the slot machine manufacturer may be looking to put itself on the auction block. This morning, similar reports have surfaced that apparel and accessories retailer Chico’s FAS (CHS) may also be searching for a buyer. CHS is up sharply ahead of the bell, in response. 

On the earnings front, shares of automotive parts retailer The Pep Boys (PBY), discounter Burlington Stores (BURL), and women’s apparel and accessories seller Christopher & Banks (CBK) are all up in the premarket (with CBK showing the most strength) after releasing April-period results. Financials from struggling electronics retailer RadioShack (RSH) and boutique operator Francesa’s Holdings (FRAN), on the other hand, did not impress investors, and those equities are indicating a notably lower openings this morning, as a result. 

In other news, B/E Aerospace (BEAV), a manufacturer of aircraft cabin interior products, has announced plans to split into two separate publicly traded companies, one focused on products and the other on services. BEAV stock is down moderately ahead of the bell on the news. – 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 major U.S. equity indexes continued their ascent yesterday, with respective gains of 19, 15, and two points for the Dow Jones Industrials, the NASDAQ, and the S&P 500 Index. The latter broader average closed at an all-time high, as it continued its climb toward 2,000. Right now there is little in the way of negative news to derail the renewed strength of the bulls, who were once again yesterday heartened by a spate of mergers and acquisitions in Corporate America. Such dealings—which are taken as a sign of the market’s strength—along with supportive economic data stateside and the European Central Bank’s decision last week to ease its monetary policies on the Continent are driving global equities higher.

There was definitely a greater appetite for risk on Wall Street yesterday, despite the market looking quite overextended. The small-cap stocks, as reflected by the nearly 1% rise in the Russell 2000, led the market higher yesterday, which is a good indication that the latest bull run may have some staying power. Earlier this morning, we learned that U.S. small business sentiment hit its highest level in more than six-plus years in May. This is the latest sign that U.S. economic growth has shifted into a higher gear after a difficult weather-related start to 2014. 

Not surprisingly, the economically sensitive industrial, financial, and technology sectors were the leaders yesterday, and may be so once again today. Within the technology space, investors gobbled up shares of the computer hardware makers. Conversely, the more-defensive groups, including the utilities, consumer staples, and healthcare issues, were out of favor yesterday.

As noted, there was little negative news to slow the momentum of the bulls. Investors continued to focus on last week’s positive data on employment, and manufacturing and nonmanufacturing activity. Too, the aforementioned strong report on small business optimism from the National Association of Independent Business, the highest reading since September, 2007, is more fodder for the already emboldened bulls. Furthermore, the positive economic data stateside, along with interest rates near-zero percent stateside and the European Central Bank trying to stimulate the sluggish economies of the 17-nation euro zone, is making investors opt for more high risk, high reward stocks in their portfolios. Over the next four days, we see little from the business beat or from the earnings front to derail the momentum of the bulls.

Elsewhere, the major indexes in Asia were mixed overnight. China’s major indexes were up on many of the same reasons that are pushing stocks higher in the United States, while Japan’s Nikkei fell almost one full-percentage point. Meantime, as trading enters the second half of the session on the Continent, the major European bourses are mostly higher, with the only notable detractor being Germany’s DAX.

With less than an hour to go before the commencement of trading on these shores, the S&P 500 and NASDAQ futures are indicating that we may be in for some mild profit taking at the outset of trading. However, if we have learned anything from the last fortnight of trading, it will probably be hard to keep the bulls in check for the entire session, especially with recent data suggesting that the U.S. economy is perking up. Stay tuned. - William G. Ferguson

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