After The Close - The last day of June—and the first half—did not provide much fireworks in this Independence Day holiday-shortened trading week. Indeed, it was another ho-hum session, very similar to the ones witnessed last week. Investors should note that the broader S&P 500 Index has not finished with a percentage gain or loss exceeding 1% in the last 50 days. The lack of any major economic and earnings news did not give investors many reasons to add to or subtract from their positions. (The economic reports will pick up tomorrow with data due on manufacturing activity for the month of June at 10:00 A.M. EDT.) Overall, it was a mixed session with a slight positive bent, as advancing issues led decliners on both the Big Board and the NASDAQ.

The spotlight was once again on the technology sector, which, like last week, provided some leadership, along with the utilities. Within the technology space, the stocks of the computer hardware and semiconductor companies were in demand today. In particular, interest in Apple (AAPL) stock, as investors look forward to a slew of new product introductions later this year, is leading the technology sector’s push higher. The technology stocks had some companionship today, with more up arrows among the top-10 groups.

On a quiet day for both earnings and economic news—though we did get some encouraging news on pending home sales and manufacturing activity in the greater Chicago area—there was some more mergers and acquisitions in Corporate America. Specifically, food processor Treehouse Foods (THS) is buying industry peer Flagstone Foods for $860 million; paint and coatings maker PPG Industries (PPG) is acquiring Mexico-based Consorcio Comex SA de CV for over $2 billion; and Linn Energy (LINE) is buying the non-core U.S. assets of Devon Energy (DVN) for $2.3 billion. The global M&A activity, which is a sign of a strong equity market, has been brisk in 2014 and the most since 2007. In a separate note, investors should note that shares of General Motors (GM) were temporarily halted this afternoon after reports surfaced that the automobile maker is facing six new safety recalls (approximately 8.5 million vehicles) and more lawsuits.

As noted above, the economic news will dominate the U.S. headlines this week. On the docket over the next three days are reports on manufacturing activity, vehicle sales, manufacturing orders, nonmanufacturing activity, the trade gap, employment, and unemployment. The job creation data can be a game changer for the market and, given that it is due on a day when activity could be light as traders get started on the holiday weekend. Indeed, major surprise on the employment front could produce a bigger-than-normally move for the equity market.

Elsewhere, the tensions in Iraq continue to escalate. However, it should be noted that worldwide oil prices fell as reports surfaced that the oil-production in Iraq remains secure and has not been disrupted by the sectarian violence in the war-torn nation. It finished at $105.33 a barrel on the New York Mercantile Exchange today. The falling price of oil when tensions in Iraq and Ukraine remain elevated is a sign that there is little fear in the equity and commodity markets right now. The S&P 500 Volatility Index (or VIX) still sits below 12. - William G. Ferguson

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


12:20 PM EDT - The U.S. stock market in putting in another choppy session today. At roughly noon in New York, the Dow Jones Industrial Average is off 13 points; the broader S&P 500 Index is up just slightly; and the NASDAQ, which is showing some leadership, is tacking on nine points. Market breadth suggests a mixed climate, too, as rising stocks are just about even with decliners on the NYSE. Nonetheless, some equity sectors are making progress, which is encouraging. The utilities are moving higher today. Also, the technology issues are making strides, helped by gains in the semiconductor area. Nonetheless, the basic materials group is an area of weakness.

Technically, stocks have been moving sideways for the past week, or so. This is not surprising, as the market made large strides in May and early June, and may be due for a rest, as traders reassess the situation.  Meanwhile, the second-quarter is now coming to a close, and traders will be watching, as corporate reports start to stream in. This should commence in about a week. Notably, the larger companies tend to lead the earnings parade, issuing results in mid-July. This will be followed by the smaller names, many of which report in August.

Meanwhile, traders received a couple of supportive economic reports this morning. Specifically, the Chicago PMI, which measures the economic activity in that region, came in at 62.6 for the month of June. While lower than the May reading, this result was just a bit better than had been expected. The real estate market seems to be making strides, too. Pending home sales for the month of May rose 6.1%, while economists had anticipated a more modest increase. Tomorrow, we kick off the month of July with a few economic issuances. The lineup includes, the ISM manufacturing report for June, the construction spending figures for May, and the monthly auto and truck sales.

Elsewhere, there were few important corporate releases to sift through today. Nonetheless, that is soon to change. – 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 SurveyCorporate news is very light this morning, as we enter an abbreviated trading week. Indeed, second-quarter earnings season will not kick off until after the July 4th holiday. Nonetheless, shares of TreeHouse Foods (THS) will likely see active trading today, after the packaged foods company struck a deal to acquire industry peer Flagstone Foods for $860 million. Investors appear pleased with the agreement, and THS stock is up moderately ahead of the bell, as a result. General Motors (GM) will probably be in the spotlight too, as the automaker is scheduled to unveil a compensation plan for victims of its defective ignition switches later this morning. GM stock is down just slightly in the premarket. – 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 - It was a dull and largely directionless early summer Friday on Wall Street to close out the latest week in the equity markets. In all, the penultimate session of the first half did little to inspire much new confidence or reduce the existing good feelings among traders and investors alike. However, there was a modicum of buying during the final half hour that brought out a few smiles among those bulls who did not opt to start their summer weekend early.

All told, the half, which concludes today, has been a reasonably reassuring one for those long equities. That is because after a weak January, the major averages have consistently tracked higher. Indeed, save for a few wrinkles along the way, any profit taking of note has been held at bay, and there has been no correction even hinted at. The lack of investment alternatives in a historically low interest-rate environment has eased the path for the bulls, even as challenges have proliferated, especially overseas, where turmoil in Iraq and Ukraine have been frequent sources of angst among some traders.

As to Friday's showing, it was unimposing, to say the least. For example, the Dow Jones Industrial Average stayed mainly in the red until the final few minutes, held in check by a near 4% loss in the shares of chemicals giant DuPont (DD - Free DuPont Stock Report) on a downward quarterly and annual profit guidance revision. Conversely, the NASDAQ was in the black almost throughout the session, boosted by selective buying in the tech sector. The small- and mid-cap indexes also did well, as a constructive half for the equity bulls is now on the cusp of ending.       

Meanwhile, it was a quiet end to a mostly frenetic opening half, with just one economic item of note (a better reading on consumer sentiment from the University of Michigan) issued during the session, little in the way of earnings news to spice things up, as we are still a couple of weeks from the start of second-quarter earnings season, and no new items of note on the contentious international scene. Given the tenor of the developments off shore lately, this must be considered a positive. 

So, after anything but a compelling Friday, in which the final numbers show that the Dow Jones Industrial Average was up a scant six points; the S&P 500 Index was up four points, but the NASDAQ, showing some steady strength, was ahead by almost 19 points, we are about to enter the second half. This is a pending six-month term in which equities are likely to again outperform bonds and cash--unless the recent step up in consumer price inflation is the wave of the future. We doubt that this is the case, but such a change in course would likely shift the investment equation to a degree.

At this stage, we still think Wall Street still is in a secular bull market of a most formidable nature. And while the easy money has been clearly made for both this year and the extended up cycle, there could well be additional incremental improvement going forward over the next six months or so. At this stage, most cases of profit taking, or even a correction, could well produce a new buying opportunity.

Now, a new week beckons, and within 24 hours, we will be looking at a new half. As to the upcoming four days in this holiday shortened week, with our nation's Independence day looming on Friday, we are due to get some economic metrics of note, starting out tomorrow with data on construction spending, auto sales, and U.S. manufacturing. Then, on Wednesday, Automatic Data Processing (ADP) will be out with its private-sector payroll report for June. That will be followed some 24 hours later with reports on the trade gap for May, employment and unemployment for June, non-manufacturing, or the services sector for June, and jobless claims for the latest week. The big report, and the one that is potentially market moving, is the issuance on job creation and the jobless rate for the just-ending month.

As to the investment situation globally, we find that stocks in Asia were generally higher overnight, with Japan posting its best gain since January. Hong Kong also did well. Meanwhile, in Europe, stocks were also better, on average, with a notable gain in the Frankfurt DAX. Finally, on our shores, the futures are pointing to a mixed opening at present, but a solid first-half advance in now in sight, with the Standard and Poor's 500 Index up by just over 6% for the half. - Harvey S. Katz

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