Market Close - Wall Street bounced back from a slow start today after digesting a batch of generally favorable economic news this morning. At the close, the Dow Jones Industrial Average was up 109 points and the NASDAQ had tacked on 12 points. Market breadth was not convincing, though, with slightly more stocks falling than rising on the New York Stock Exchange.

The day didn’t start off on the right foot, with traders still smarting over what appeared to be a slightly more aggressive stance on interest rates on the part of the Federal Reserve after the close of yesterday’s FOMC meeting. Recently installed Fed Chair Janet Yellen’s increased precision in the language as to how long it would be before interest rates would begin to rise wasn’t what investors wanted to hear, although, in truth, it was not a big surprise.

However, the tide turned within a half-hour of the opening bell, as one supportive piece of business data after the other came in. Upbeat news on manufacturing in the Philadelphia region and in the nation’s leading indicators was particularly helpful. In general, signs pointed to a stronger economy after some weather-related issues had created concerns.

Among the market’s various sectors, financial stocks fared the best. That was partly on the feeling that a resumption in the climb in long-term interest rates from their historic lows about a year ago would boost lending margins for banks and lift yields on new bonds purchased by insurance companies. Shares of Citigroup (C) and Prudential (PRU) rose nicely as a result.

Speaking of interest rates, the yield on the 10-year Treasury note moved up modestly, to 2.78%, with prices easing, and the rise in rates over the past year is very clear. According to government agency Freddie Mac, the average rate on the 30-year mortgage is up more than a full percentage point, to 4.32%, from this time in 2013. Rates are still excellent for homebuyers, although indications are that less-than-desired inventory levels are pushing up house prices.

Technology stocks also fared well, led by stalwarts, such as IBM (IBM - Free IBM Stock Report) and Microsoft (MSFT - Free Microsoft Stock Report). Investors seem to remain impressed about Microsoft’s prospect for picking up business with a version of its software being written for Apple’s (AAPL) iPad.

Tomorrow brings the first full day of spring, although there are no significant economic reports scheduled to indicate how the weather may have affected the economy. Earnings reports on tap include results from high-end retailer Tiffany (TIF) and struggling restaurateur Darden (DRI). - Robert Mitkowski

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


12:30 P.M. EDT - The U.S. stock market headed lower earlier this morning, but has since firmed up considerably. While encouraging for the bulls, it remains to be seen if this latest move will have staying power through the late afternoon. At just past 12:30 P.M. (EDT) in New York, the Dow Jones Industrial Average is up about 100 points; the broader S&P 500 Index is higher by nine points; and the technology-heavy NASDAQ is ahead 14 points. Market breadth suggests a somewhat divided session, with advancers now moderately ahead of decliners. The market sectors are still mixed. Weakness can be found in the healthcare stocks, with losses in the biotechnology area. In addition, the utilities are struggling. In contrast, strength can be seen in the technology sector, as the semiconductors continue to show leadership. The financials, too, are advancing. Notably, the banks are trading higher, offsetting declines in the real estate issues. No doubt, some of these moves reflect recent remarks from the Fed, suggesting that higher interest rates could be on the horizon.

Technically, the market did not react well to the Fed’s statement yesterday afternoon. However, it seems that traders, who enjoy low-cost capital, are now getting used to the idea that the Fed’s policy will gradually become less accommodative. The good news is that this likely suggests that the economy is in better shape and in need of less assistance. For now, the S&P 500 Index is holding up well, all things considered. We will still need to see some follow through buying to push the averages higher, and this may prove challenging.

Investors received quite a few economic reports this morning. In the employment area, initial jobless claims came in at 320,000 for the week ended March 15th, which was a bit higher than the prior week’s figure, but below expectations. On the housing front, existing homes sales came in at 4.60 million units, annualized, which met the consensus view. Elsewhere, the Philadelphia Fed’s report on business conditions in that region was better than many had anticipated. Also, the Conference Board’s leading economic indicators figures for February showed progress.

We received a few important earnings releases this morning. We heard from ConAgra (CAG). That stock is up slightly, after the food processor issued decent results. Lennar (LEN) stock is trading slightly lower, however, even though the homebuilder issued better-than-expected results. After the bell, we will hear from Nike (NKE - Free Nike Stock Report). - 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 Survey Earnings reports remain in the spotlight. On the bright side, investors appeared pleased with quarterly reports and/or updated outlooks from packaged foods company ConAgra (CAG), homebuilder Lennar (LEN), electronic manufacturing services and solutions provider Jabil Circuit (JBL), and furniture designer and manufacturer Herman Miller (MLHR). Indeed, all of these equities are indicating higher openings this morning, with MLHR leading the pack.

It was not all good news, however. Notably, Guess, Inc. (GES) delivered solid January-period results, but investors were spooked by the apparel company’s outlook, which calls for an unexpected loss in the April quarter due to weak traffic at its stores in North America. The stock is trading notably lower ahead of the bell, as a result. Shares of fellow retailer Tilly’s (TLYS) are also down sharply in the premarket on earnings 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 bulls, who had raced ahead to a pair of wire-to-wire wins on Monday and Tuesday, apparently mollified that the tense situation between Russia and the West would not deteriorate into a full-fledged conflict with some military consequences, saw those brief good feelings come undone yesterday, but not in a very big way.

However, it was not geopolitics that took the measure of these perennial market optimists this time, but, instead, sudden concerns about the Federal Reserve, following the conclusion of the lead bank's latest FOMC meeting. To wit, it wasn't an immediate reaction to the meeting's conclusion that rattled the equity market, as the accompanying statement brought no particular surprises. In fact, in the hour, or so, following the FOMC statement announcing the Fed would pare another $10 billion monthly from its popular bond purchase program, the market just drifted incrementally lower.

But after Fed Chair Janet Yellen further intoned, in response to a question, that we can expect the bank to start raising short-term interest rates, which the Fed controls directly, from their near zero level some six months after the conclusion of the Fed tapering program, the market sold off. In all, the Dow Jones Industrial Average raced quickly to a loss of just over 200 points. That the market should have fallen so decisively after this rather benign musing by Ms. Yellen is somewhat surprising as the contention all along has been that rates would start to climb next year. But the selloff speaks volumes about how high stocks are and how potentially vulnerable they remain to a selloff at anytime. And, regrettably for the bulls, yesterday was one of those times.

To be sure, the market did not stay down there very long, and as the final half hour wound down, a notable reversal came into play, with the Dow and the NASDAQ, which had been off by some 50 points, itself, at its nadir, paring their losses by more than 50%. In all, by the end of trading, the market, albeit lower, was by no means off dramatically, with the Dow down 114 points, the Standard and Poor's 500 Index off 11 points, and the NASDAQ lower by 26 points. The small- and mid-cap averages also moved downward, as well, but in contained fashion, for the most part.

All of this took place within the backdrop of a veritable news vacuum yesterday, with the Fed policy statement being the only item of note. However, things quicken a bit today, with pending data issuances on sales of existing homes, the leading indicators, and the Philadelphia Fed, which will issue data on manufacturing in that locale. Those reports conclude the week for key issuances.

As to the day ahead, we saw that the equity markets in Asia were lower overnight, in a likely response to our selloff. Here, the Nikkei 225, Japan's key index, lost about a percentage point and a half. In Europe, meantime, the principal bourses are all tracking lower at this hour. And over on our shores, even with some welcome news just issued moments ago that weekly jobless claims had risen less than expected in the latest week, going from 315,000 to 320,000, the futures are tracking a bit lower with less than an hour to go before the start of the new trading day. - Harvey S. Katz

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