After The Close - The U.S. stock market put in a mixed performance today, after rising for several consecutive sessions. At the end of the day, the Dow Jones Industrial Average was ahead 95 points, while the broader S&P 500 Index was down two points. However, it was the technology-heavy NASDAQ that was really hit, being lower by 54 points. Market breadth was neutral, with advancers about even with decliners on the NYSE. There were considerable losses in the technology and basic materials issues. However, the energy stocks managed to stage a sizable advance, helped by higher crude oil prices.
The employment situation was back in the spotlight today. Specifically, initial jobless claims declined to 222,000 during the week of June 2nd, which was a constructive reading. Tomorrow will be a light day for economic news. The wholesale inventories report for the month of April is the only notable item set to be released.
In corporate news, a few companies posted quarterly results today. In the retail sector, shares of Five Below (FIVE) and Conn’s (CONN) edged higher, in response to upbeat reports. In the food area, shares of J.M. Smucker (SJM) moved lower after the company posted disappointing results.
Technically, the stock market has made considerable progress in the first week of June. It remains to be seen if the bulls can keep their buying campaign in place during the coming weeks. Coming up next week, the Federal Reserve will weigh in with an interest rate decision and a summit with North Korea’s leader is set to take place. - Adam Rosner
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 notable back-to-back wins this past Friday and Monday, and a narrow victory on Tuesday, moved out to a sizable advance early yesterday morning. As before, optimism on the home front contributed mightily to the early gains that saw the Dow Jones Industrial Average move out to a better-than-100-point rise in the first minutes of trading. Strength in technology issues led the initial charge. The other large-cap indexes, namely the S&P 500 and the NASDAQ, joined the parade. Tech has been the market leader in recent weeks, and this has propelled the NASDAQ to one all-time high after another.
The good news stateside, which has been embellished in recent days by constructive reports on employment, manufacturing, and non-manufacturing, has served to counter the worrisome developments globally, especially on the trade front. Canada and Mexico, for example, have said that they plan to counter moves by our nation to put tariffs on an array of goods, by levies of their own. This back and forth has helped to limit some of the market's gains in recent weeks. Such concerns aside, equities have managed to push nicely higher over the past few sessions.
Meanwhile, after that first strong upsurge yesterday morning, the gains moderated somewhat for a brief spell, with the NASDAQ, on profit taking in the tech group, reversing gears and pressing lower as the first hour of trading concluded. Still, the bulls continued to have the ball firmly in their court for the remainder of the morning. Meantime, in addition to optimism over the trio of economic reports noted above, the market also received several releases yesterday morning. On this count, we saw reports showing that productivity had risen by 0.4% during the first quarter, while unit labor costs had gained 2.9% in the initial period.
These issuances, however, likely had little impact on trading, and the market would show a second round of strength later on in the morning, with the session led, for a change, by the Dow Industrials, which rose by better than 220 points as the morning wound down, climbing past the 25,000 level. The NASDAQ, meantime, returned to the profit column as did the Russell 2000 and the S&P Mid-Cap 400. This strength would then continue as the afternoon got under way. Leading the advance were the basic materials and financial issues. Interestingly, though, gaining stocks had only a narrow lead on decliners on the NYSE at midday.
That narrow plurality of gaining stocks can be a bad omen for the market. But as the afternoon began, the market showed no ill effects of that unimposing ratio. In fact, as the afternoon progressed, the Dow maintained its gain of more than 200 points. In the meantime, a third economic issuance, the April trade gap, which narrowed to a seven-month low, likely helped the bulls along to a degree. Helping the trade gap was another increase in U.S. exports. Note that this report was before the imposition of new tariffs. In addition, the market benefited from some possible easing in trade tensions with China.
The stock market then proceeded to build on those early afternoon gains, as the Dow Industrials, led by some of its financial issues, climbed to a session-best gain of 346 points at the close. Advances of 24 and 51 points, respectively, were tabulated by the S&P 500 Index and the NASDAQ. Among the big individual gainers on the Dow 30, were aerospace giant Boeing (BA – Free Boeing Stock Report), which soared by more than 11 points. Also advancing strongly were shares of Dow DuPont (DWDP – Free Dow DuPont Stock Report) and JPMorgan Chase (JPM – Free JPMorgan Chase Stock Report). All of the 10 major equity groups rose on the day save for the utilities, which tumbled, as Treasury yields stormed ahead.
Now, a new day begins, and we see that shares in Asia were higher in overnight trading, while on the Continent, the good news for the bulls in the United States yesterday has helped to lift stocks in the early going in Europe. Also, oil, off yesterday, is now moving back up this morning, while Treasury yields, which climbed yesterday to a close on the 10-year note of 2.98%, are now at 2.99% on expectations of higher interest rates from the Federal Reserve, so far this morning. Finally, as the bulls seek to extend their modest winning streak, the equity futures are now pointing to a generally higher start on our shores. – Harvey S. Katz, CFA