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After The Close - The major U.S. indexes, which began Friday higher before dipping into negative territory, struggled to maintain the gains registered during its mid-afternoon rally. The day began with more positive news on the business beat, but ensuing optimism was bogged down by the reaction to the Federal Reserve’s announcement on Wednesday that it intended to enact three interest rate hikes in 2017, rather than four. And while the bulls regained control of the market heading into the closing hour, an active political news cycle may have also sowed some uncertainty as the closing bell neared.

Market breadth was helped by mid- and small-cap stocks. Advancing issues outnumbered decliners by a 1.5-to-1 ratio. As for the sectors, healthcare was down today. The grouping remains tied to the prospects of a newly proposed healthcare bill, as well as expected scrutiny from the Administration on drug pricing policy. Energy saw its daylong improvement fade by the close. And, due to the aforementioned updated monetary outlook of the central bank, the financial sector was the biggest laggard today. Conversely, that news has stoked gains in utility and industrial stocks. The rest of the market groups commemorated St. Patrick’s Day by spending most of the session in the green.

Meanwhile, oil also settled higher for the week, albeit by a small margin. U.S. crude oil gained $0.03 per-barrel in the five-day period. Though pressure from domestic stockpile levels continues to loom over trading, a weaker U.S. dollar helped to support the commodity. Moreover, with OPEC’s drilling accord boasting a 98% adherence rate through February, we wonder if the inevitable reduction will spell more selling on the market. A late-in-the-day report that non-OPEC nations boasted a comparatively underwhelming 64% of cuts ought to provide a test to sentiment when next week’s trading opens.

Then, in the final half hour of trading, each of the three major indexes dipped into negative territory. Even the NASDAQ, which has benefited from a string of successful IPOs, had trouble holding onto daily gains by the ringing of the final bell. Today’s successful offering of MuleSoft, as well as contributions from blue chips Microsoft (MSFTFree Microsoft Stock Report) and Adobe (ADBE), helped the tech-laden group set an intraday trading high earlier in the afternoon. The index managed to add one-fifth of a point on the day. The S&P 500 and Dow Jones Industrial Average impacted by a sudden selloff in the final five minutes, losing, 3 and 20 points, respectively. Each of these groups, it bears noting, remained higher for the week.

In all, we believe the bullish market remains intact, with plenty of upside on the horizon. Profit taking will continue to keep gains in check, but we see no reason for the rally to correct itself as long as the economy expands gradually and Wall Street continues to view the Trump Administration’s fiscal policies as business friendly. - Robert Harrington

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

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12:00 PM EDT - Stocks were modestly in the green at the beginning of trading on this St. Patrick’s Day, but have since moved slightly into the red.  At the noon hour on the East Coast, the Dow Jones Industrial Average is down 13 points; the NASDAQ is off five points; and the S&P 500 is lower by a couple of points. In terms of market breadth, there is a firmer tone on the New York Stock Exchange, where advancers are outpacing decliners, but losers are ahead of gainers on the NASDAQ.

In contrast to stocks, the morning’s business news was clearly biased to the upside. The Conference Board’s Index of Leading Economic Indicators reading came in better than expected for February, signaling positive underlying trends will likely continue.

Similarly, the University of Michigan consumer sentiment index came in strong, and ahead of expectations. In addition, manufacturing production rose for the sixth straight month, according to a Federal Reserve report.

The upbeat economic data normally would be expected to push up bond yields, as investors look for inflationary trends to pick. But that is not happening today. The yield on the benchmark 10-year Treasury note is down to 2.49% from 2.54% yesterday. Apparently the Federal Reserve’s assertion on Wednesday that it expects to raise interest rates three times in 2017, instead of the four times that some on Wall Street had thought possible, is trumping the day’s good economic news.

Prospects for a less-rapid-than-thought rise in interest rates is having a positive effect on the utilities and consumer staples sectors today, although it is proving a negative for financial stocks.

The healthcare sector is also lagging, partly owing to a report that a cholesterol drug in Amgen’s (AMGN) lab had somewhat disappointing results. Amgen stock is being hurt as a result.

Elsewhere, we note that the recovery in oil prices over the past year has led to some activity in the IPO market for energy stocks.ProPetroopened for trading this morning. The company helps drillers in the Permian Basin of Texas.

The stock of software company MuleSoftis also debuting today. The strong support the NASDAQ has enjoyed will probably lead to more tech-related IPOs in the coming months.

Overall, trading is fairly subdued heading into the afternoon session. - Robert Mitkowski

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

 

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Before The Bell - The stock market, which soared on Wednesday, in the wake of the Federal Reserve's decision to raise short-term interest rates by 25 basis points, came back to earth late yesterday morning, following an early further rise in the key indexes. The prior day's gains came as investors seemingly were relieved that the lead bank did not markedly alter its monetary language. There had been some fear that the Fed might adopt a more hawkish stance. However, there was no surprise that the bank actually raised rates, but left its accommodative language intact.

The market's late-morning shift to a more bearish posture reflected, in part, weakness in the health care category, where shares of some big drug makers floundered. Also hurting sentiment was the fact that oil, which rose strongly on Wednesday and early again yesterday, reversed course near lunch time, and dipped back somewhat. In other news, jobless claims eased back to 241,000 in the latest week, while housing starts and home completions rose sequentially in the latest month, while building permits pulled back modestly.

These economic barometers, though, had little impact of note on the market's behavior. Meanwhile, as far as the early pullback went, it did not amount to much. To wit, what had been just over a 50-point gain in the Dow Jones Industrial Average at the outset, which brought that 30-stock composite up to 21,000 again, and then a 57-point drop around mid-session, moved back to just a nominal change in that index for a time after lunch. Elsewhere, the other composites marked time.   

The equity market then proceeded to drift somewhat lower as the afternoon progressed, although a selloff of note never evolved. Wall Street, it appears, remains satisfied with the state of monetary affairs for the time being, with sentiment seemingly in pace that the moderate tightening pace the Federal Reserve is wedded to at this time will not affect the business expansion in any noteworthy way. Then, as we moved toward the final hour of trading, equities started to pull back a little further.

But the final hour then saw little additional change, as the larger-cap averages stayed modestly lower, led down by the health care and the utilities sectors. All told, however, there was an fairly even split between groups gaining in price and those contracting, while more stocks rose than fell on the Big Board at that time. The positive differential on the NYSE was somewhat more pronounced on the NASDAQ, leading to a mixed market close in the aggregate. In all, the advance from Wednesday was retained.

At the close, the Dow closed off 16 points and the S&P 500 Index was down by just under a handful of points. The NASDAQ was flat, as were the small- and mid-cap composites, while gaining stocks retained a small lead over those issues contracting in price. The market will now attempt to close higher on the week and perhaps end matters above 21,000.  

Now, a new day begins, and as we look out to Asia, we see that the principal indexes in that part of the world ended matters to the mixed. Stocks in Europe, meantime, are also charting an uneven course. The futures in our country are now mixed, as well. Elsewhere, oil is ticking a bit higher; and bond prices are off slightly; Looking at data that will be issued today, the reports of note will be on industrial production, factory usage, and consumer sentiment.   - Harvey S. Katz

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