After The Close - Stocks put in a choppy session today. Specifically, equities opened higher, pulled back later in the morning, and then advanced in the afternoon. At the end of trading, the Dow Jones Industrial Average was ahead 94 points; the broader S&P 500 Index was up 12 points; and the NASDAQ was higher by 31 points. Market breadth showed a largely divided session, with advancers just ahead of decliners on the NYSE. Many market sectors settled in positive territory, with notable gains in the consumer noncyclical names and in the utility stocks. Meanwhile, the basic materials issues retreated.
In economic news, initial jobless claims came in at 231,000 for the week of March 3rd, which was a less-favorable result than had been anticipated. Of note, the nation’s employment situation will be in the spotlight again tomorrow morning when the government publishes its monthly employment report. Traders will be paying close attention to that release, especially given the concerns about higher interest rates. The FOMC will meet later this month to discuss the economy and weigh in with a rate decision – most likely an increase.
In the corporate arena, a few companies issued their results today. Specifically, shares of Kroger Co. (KR) came under pressure, after the retailer provided an unimpressive outlook.
Furthermore, shares of Tech Data (TECD) also plunged after the technology company put out a disappointing report.
Technically, the stock market has been looking for direction. Today’s trading puts the S&P 500 Index just at its 50-day moving average, located just below the 2,740 level. From here, it remains to be seen if the market can cross this key technical mark. - Adam Rosner
At the time of this article’s writing, the author did not have positions in any of the companies mentioned.
11:00 AM EST - The stock market, reeling from tariff worries for much of last week, before getting a respite to start out the current five-day span, was back at its losing ways yesterday morning. And the reason again was fear about the suggested imposition of sharp increases in tariffs on steel and aluminum. True, there was no change in Administration policy announced within the last 24 hours. That said, the announced resignation the night before, of the President's chief economic advisor, Gary Cohn, a staunch free trader, brought fresh worries that the hard liners in his Administration would now have the ear of the President.
So, stocks faltered at the open, with the Dow Jones Industrial Average quickly dropping by more than 200 points. However, as there was no full-fledged rout in place at the outset, and as the market held its ground during the first hour of trading, there was something of a recovery getting under way. Thus, the Dow's loss, which had swelled to just over 300 points early on, eased to some 150 points after the first hour, with the NASDAQ, erasing all but 10 points of an early loss. Among the early gainers was software design maker Autodesk (ADSK), which reported a smaller-than-expected loss and saw its stock jump almost 15% during the session.
So why is the market not doing worse? That, we think, is mainly due to the strength of the economy and earnings. That one-two punch, we sense, could be enough for the bulls to weather the potentially higher global tensions ensuing from the stiffer trade approach. Nevertheless, the market has taken a psychological hit from both the evolving trade situation and the Cohn resignation, which will likely take effect later this month. Meanwhile, on the economic front, Automatic Data Processing (ADP) released its survey on private-sector payrolls yesterday morning, and that number was stronger than forecast, at 235,000 last month. (The expectation had been for 195,000 new jobs.) That number is considered a precursor for tomorrow's U.S. jobs issuance.
As to the market, it continued to improve as the morning wore on, with the Dow's loss easing to fewer than 100 points as we passed the 90-minuite mark of trading, while the NASDAQ and the small-cap Russell 2000 both went positive. Also, bond yields edged back toward their session highs. This recovery, though, was soon followed by a minor further selloff, with the Dow moving back to a loss of more than 200 points as the morning concluded. The selloff increased somewhat as the afternoon began, with the Dow's deficit moving past 320 points as traders returned from lunch. The other indexes also worked lower, with consumer stocks, such as Campbell Soup (CPB), leading the way downward.
However, that early afternoon dip would prove to be the session's low point. Indeed, after the Dow had come back to show only about a 245-point loss, the Federal Reserve's Beige Book was released, and that issuance detailed further modest-to-moderate economic growth, tightening labor markets, and some upward pressure on prices, in general. But as there was little of any notable surprise in this economic summation, the market came back further, and with some enthusiasm. Indeed, the Dow's loss appeared for a time as if it would be totally erased. And, in fact, we did come fairly close to breakeven in that composite before we fell back to close down by 83 points. The S&P 500 was just nominally lower, but the NASDAQ, boosted by nice gains in some tech issues added 25 points; the Russell 2000 jumped 12 points on strength in the small-cap category.
Looking ahead to the penultimate session of the week, we see that stocks were higher in Asia overnight, on word of possible tariff exemptions for Canada and Mexico; in Europe, meantime, the key bourses are moving slightly higher, too, ahead of the ECB meeting. Also, oil, off notably yesterday, is now trading pennies lower a barrel and yields on the 10-year Treasury note are at 2.88%. Finally, after yesterday's up-and-down session, U.S. markets are moving a little higher at this hour, with eyes on tariffs and tomorrow's jobs report. – Harvey S. Katz, CFA