After The Close - The first two trading days of this week proved to be a rollercoaster ride for those invested in the world equity markets, with the geopolitical tensions between the Ukraine and Russia leading to pronounced swings in the direction of trading. It was yet another Monday/Tuesday reversal on display the last two days, with this one proving to be the biggest of 2014. The markets, which sold off sharply yesterday as Russia increased its troops at the Ukraine border, reversed course in a big way today after Russia’s President Vladimir Putin ordered 150,000 troops along that border to make their way back to Russia. Market investors also were pleased to see that a conflict may now be averted through diplomatic means.

When all was said and done, it was a very productive day for those long equities, as yesterday losses and then some were retraced. By the closing bell, the Dow Jones Industrial Average, the tech-heavy NASDAQ, and the broader S&P 500 Index had added 227, 75, and 28 points, respectively. Unlike yesterday, investors showed an appetite for risk. The small-cap Russell 2000 was the biggest gainer stateside among the major U.S. equity indexes, surging more than 2.5% in the latest session. Likewise, the S&P 500 Volatility Index (or VIX) retreated today and safe-haven instruments like gold (see below) and bonds lost some of their appeal during the latest session. The yield on the 10-year Treasury note, which moves in the opposite direction to the price, jumped six basis points, to 2.69%.

Overall, the buying was pretty encompassing, with each of the 10 major sectors comfortably in positive territory. In fact Monday’s big laggards (i.e., financials, healthcare, and industrials stocks) were today’s big winners. Bargain hunting after yesterday’s setback was most prominent in those sectors. Not surprisingly, advancing issues led decliners by a whopping margin on both the New York Stock Exchange and the NASDAQ.

The rollercoaster ride was not only confined to the equity markets. It was a volatile two days for the commodity markets, as well. Not surprisingly, with some easing of tensions in Eastern Europe, at least for the moment, the price of gold and oil fell sharply. Gold, which is viewed as a safe-haven instrument, was in less demand today. Meantime, some investors took the latest diplomatic developments as a sign that a major conflict in the Ukraine may be avoided and there would be no interruptions to the world oil supplies. Crude oil is a major commodity for Russia and is shipped to several other oil countries in Europe and Asia. Accordingly, crude oil prices fell more than 1.5% on the New York Mercantile Exchange. Conversely, agricultural futures, including contracts for soybeans, corn, wheat and oats, soared during today’s session.

Finally, there was some notable non-geopolitical news to hit the newswires today. On the earnings front, we received the latest quarterly results from Ascena Retail Group (ASNA), AutoZone (AZO), McDermott International (MDR), and RadioShack (RSH). Investors should also note that shares of Qualcomm (QCOM) hit a 52-week high today after the technology company announced that it is raising its dividend and increasing its share-repurchase program.  Overall, it was a quiet day on the economic front, save for a report from research firm CoreLogic showing that home prices rose by 12% in January, the 23rd consecutive monthly year-over-year gain for the metric.   - William G. Ferguson

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


12:15 PM EST - The U.S. stock market continues to move higher, building on this morning’s gains. Initially, traders were pleased to learn that Russian troops were retreating from the Ukraine, and that the situation there was less tense. However, at this point the rally seems to have taken on a force of its own.  At just past noon in New York, the Dow Jones Industrial Average is up 209 points; the broader S&P 500 Index is ahead 25 points; and the technology-heavy NASDAQ is surging 75 points. There is a clear upward bias to today’s trading, as advancing stocks are ahead of decliners by about seven to one on the NYSE. Strength can be found in the healthcare, industrial, and technology issues. There are no notable lagging sectors.

Technically, the stock market is showing resilience, as the bulls take control once again. Today’s push higher puts the S&P 500 Index at roughly 1,870, and back into new high ground. From here, we will have to wait for additional follow through to confirm that today’s breakout carries conviction. The VIX is sharply lower, suggesting traders are feeling a bit better about the market.

Meanwhile, there were no economic reports issued this morning. However, tomorrow we get a look at the ADP Employment report for January, the ISM Non-manufacturing Index for February, and the Fed’s Beige Book summation.

We also received a few corporate news items worth noting. In retail, shares of Radio Shack (RSH) are trading sharply lower, after that ailing company issued weaker-than-expected results and said it would be closing over 1,000 locations. Things look a bit better for JC Penney (JCP). That stock is up after a major credit rating agency upgraded its outlook. - Adam Rosner

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


10:20 AM EST - The U.S. stock market is heading sharply higher this morning, on news that tensions in Ukraine may be easing. At about 10:15 AM (EST) in New York, the major averages are all roughly up 1%, and at their session highs. The Dow Jones Industrial Average is ahead 190 points; the broader S&P 500 Index is up 22 points; and the technology-heavy NASDAQ is tacking on 63 points. Market breadth shows widespread buying of equities, with advancing issues well ahead of decliners on the NYSE. Further, all of the major market sectors are participating in the rally, with leadership in the industrial and technology stocks. Sentiment looks much more bullish today, too, with the VIX lower by 11%, to just above 14.  - 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 Retailers, many of which have fiscal years that end in January, are giving earnings season a second wind. One of the most notable reports out this morning is from RadioShack (RSH). Indeed, shares of the electronics seller are plunging ahead of the bell, after the company reported weaker-than-expected fourth-quarter financials and announced plans to close stores. Other equities moving lower ahead of the bell on earnings news include women’s apparel and accessories retailer Ascena Retail Group (ASNA) and McDermott International (MDR), an engineering, procurement, construction, and installation company. One bright spot, however, came from automotive parts retailer AutoZone (AZO). That stock is indicating a higher opening this morning, as investors seemed pleased with the company’s most-recent results. – 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 - January was down for Wall Street; February was up; and March started out yesterday as if it were a replay of January. That is, stocks tumbled at the opening bell and they never fully reversed course. To be sure, the bulls did try to make a stand on several occasions, and they did succeed to an extent, as they pared the market's worst losses of the day before finally closing well to the downside. In all, by the end of trading, the equity market was broadly lower, although, as noted, well off of their worst levels of the session.

What told the tale of the tape for much of the session yesterday was the unnerving situation in the Ukraine, as that former member of the erstwhile Soviet Union was once more under pressure from Russia, with the latter having sent several thousand troops into that region following a government upheaval there. Concerns that Russia's posturing could lead to a shooting war and a possible attempt to take over parts of the Ukraine, especially in the eastern zone, and its coal mines and factories, with all of the ramifications involved in that unfortunate result, had investors understandably on edge. And, they sold stocks en masse, especially in Europe, where the key bourses were sharply lower throughout day. The more outsized reversals on the Continent, reflected, obviously, the closer proximity of western Europe to the region in question.

And, on our shores, the market started the day notably to the downside, and then took a further step downward around lunch time in New York, when the Dow Jones Industrial Average tumbled to a session low that saw this composite press 16,100. At its nadir, that 30-stock composite was off by some 250 points. However, the buyers tiptoed back in by the mid-afternoon and soon the losses on this blue-chip composite had been pared by better than 50%. A similar occurrence took place on the NASDAQ, where a session low that had seen this tech-laden composite tumble by almost 70 points, was more than halved. The Standard and Poor's 500 Index also saw its worst losses of the day cut by more than 50% by the close.

However, the sellers did make one final attempt to push stocks lower, and met with some success for a time, but they could not finish the job and the market ended the day off notably, as indicated but still off of its lows. All told, the Dow ended the day down 154 points; the Standard and Poor's 500 Index shed 14 points; and the NASDAQ fell 31 points. The small -and mid-cap indexes likewise tumbled, but they, too, did not end near their respective lows. In fact, given the dour international news background, the market held up as well as could reasonably be expected, especially in light of the extended valuations.  

Meanwhile, in other news, the Institute for Supply Management reported a nice pickup in manufacturing activity in February, easily surpassing January's tepid reading in spite of the heavy snows and frigid temperatures recently blanketing much of the nation. This key metric will now be followed tomorrow morning by data on non-manufacturing activity. Then, on Friday, the Labor Department will post monthly data on non-farm payrolls for February and the unemployment rate for that month. Notwithstanding the tense global situation, this latter report will be closely watched and likely reacted to in possibly a material way.

Now, looking to a new day, we find a whole new mind set, with our equity futures bounding ahead and indicating a dramatically higher opening when traders get down to business in less than an hour from now. To wit, the appetite for riskier assets apparently is again in play after the release of a report that Russia's President Vladimir Putin has ordered his troops back to base after the completion of military exercises. This apparent diminution in tensions seems to be clearly behind this change in mood on Wall Street this morning.

Meanwhile, the futures in Asia were again mixed overnight, which has become a familiar pattern with both red and green arrows becoming the norm on a daily basis. But in Europe, where there is much greater proximity to the Ukraine, the markets are notably higher thus far this morning. Thus, we seem to be now setting up for another Monday-Tuesday reversal, which has become a frequent event this year. Finally, with no news on the economic front of note, the influences figure to be totally global today. - Harvey S. Katz  

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