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After The Close - The U.S. stock market got off to a slightly weaker start this morning, and turned sharply lower in the afternoon. At the close of the day, the Dow Jones Industrial Average was off 101 points; the broader S&P 500 Index was lower by nine points; and the NASDAQ was down 30 points. Notably, the Russell 2,000, which is a leading small cap index, declined over 1.5%, as well. This suggests that investors were feeling cautious, and were unwilling to buy the more obscure names.

Market breadth was largely unfavorable, as declining stocks outnumbered advancers by about two to one on the NYSE. Most market sectors slipped into negative territory. Weakness was apparent in the industrials. The consumer cyclical names and technology stocks also declined quite a bit. In contrast, the utilities, which have done well in recent months, advanced nicely. Also, the basic materials names moved higher, helped by selective strength in the metals area.

Technically, the stock market took a small step back today. This is not surprising, as the market has been very volatile, and making sustained progress has proven difficult. From here, it remains to be seen if the bulls can mount a durable buying campaign, especially with the first-quarter earnings season largely over and the summer months fast approaching. Meanwhile, any selling which took place today was quite orderly. While the VIX moved up slightly, the current reading of 12.19 is still quite low.

Today’s economic news was largely uneventful. Specifically, producer prices jumped 0.6% during the month of April, advancing more than had been expected. However, core producer prices were a bit more restrained. Tomorrow will be a busy day. We will get a look at consumer prices, industrial production, and a couple of regional economic reports. This wealth of information should provide traders with plenty to concentrate on.

Even though the first-quarter earnings season is largely over, some key reports are still being released. We recently heard from Fossil (FOSL). That stock moved more than 10% lower after the watchmaker tempered its outlook. Shares of Deere and Co. (DE) also slipped, as investors were not too pleased with that company’s figures. After the closing bell today, we will hear from networking giant Cisco (CSCOFree Cisco Stock Report), while tomorrow Wal-Mart (WMTFree Wal-Mart Stock Report) is set to report. - Adam Rosner

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

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12:10 PM EDT - With the Dow Jones Industrial Average and the S&P 500 Index entering today’s session at all-time highs, it is not overly surprising that there was some profit taking at the start of the day. The lack of any headline grabbing news from the earnings and economic fronts is not giving investors additional ammunition to push the equity indexes—where valuations are frothy—higher, at least so far today. So, at the midday hour on the East Coast, the Dow Jones Industrials, the NASDAQ, and the S&P 500 Index are all modestly lower. The selling in the small-cap market is a bit more pronounced, with the small-cap Russell 2000 off more than eight points (0.7%). Overall, there is a definite negative undertone to the trading session, as declining issues are outpacing advancers by a decent margin on both the New York Stock Exchange and the NASDAQ.

From a broad perspective, it is pretty much an even split between up and down arrows among the top-10 groups. Some leadership is coming from the basic materials, utilities, and telecommunications groups. Our sense is that with valuations looking stretched, investors are rotating some of their money out of riskier equities and into some of the more-defensive areas. Conversely, the industrial, consumer discretionary, and consumer staples stocks are under some mild selling pressure today. We think the consumer stocks are being hurt somewhat by the higher-than-expected producer (wholesale) pricing data for the month of April. Specifically, the Labor Department reported this morning that producer prices rose 0.6%, well above the consensus expectation of 0.2%, with most of the inflation coming in the foods category.

As noted, the earnings news lacked the headline grabbers this morning, but we did get a potpourri of news from the corporate world. On the earnings front, Deere& Co. (DE), SodaStream (SODA), and Fossil Group (FOSL) beat expectations on the bottom line, but the stocks of the former two companies fell on other aspects of the quarterly reports. For Deere & Co. it was softer-than-expected sales, while investors did not like the weaker second-quarter earnings guidance from Fossil. Elsewhere, investors are keeping an eye on SearsHoldings (SHLD), Krispy Kreme (KKD), and Anadarko Petroleum (APC). Sears is said to be exploring selling its 51% stake in Sears Canada, while Anadarko is raising its quarterly dividend and Krispy Kreme has named a new chief executive officer. Shares of all three companies are modestly higher at the noon hour on the East Coast.

Speaking of Sears, the attention of the investment community is likely to shift toward the retailing stocks over the next few days, as many of the major players are scheduled to report their latest quarterly results, including Macy’s (M) after the close of trading today. The consumer sector—which is very vital to the health of the economy, as it accounts for about two-thirds of the nation’s output—is very much on the minds of investors with yesterday’s retail sales report, today’s producer price data, and the aforementioned slew of forthcoming earnings reports from the retailers. So far, the reaction has not been great to the retailing and pricing data. Will the earnings news change the near-term sentiment toward that sector? Stay tuned. - William G. Ferguson

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

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Stocks to Watch from The Survey Earnings reports are still flowing in, albeit more slowly. This latest batch of reports was not very impressive, and investors took issue with a number of releases. One of the biggest disappointments came from watch and accessories retailer Fossil (FOSL). March-period financials were actually better than expected, but management’s outlook did not live up to expectations, and the stock is down notably ahead of the bell, in response. Other equities indicating lower openings this morning on earnings news include video game developer Take-Two Interactive Software (TTWO), electronics company Sony (SNE), farm and heavy equipment manufacturer Deere & Co. (DE), and SodaStream International (SODA), a maker of home beverage carbonation systems. 

It was not all bad news however, and investors appeared pleased with quarterly results from apparel company Kate Spade (KATE), department store operator Macy’s (M), and fragrance and cosmetics company Coty (COTY).

On the M&A front, Yahoo! (YHOO) stock is up slightly in the premarket, after the Internet company struck a deal to acquire Blink, a mobile messaging app that competes with SnapChat. The stock of Sears Holdings (SHLD) is also up modestly ahead of the bell, on news that the retailer is exploring strategic alternatives for its 51% stake in Sears Canada. – 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 - After starting the new week out on a uniformly positive note, with a stellar gain for the stock market on Monday, the pre-market futures again suggested that a strong day would be upcoming yesterday. After all, much of Asia and Europe had pressed higher during the night and early morning, with Europe moving up to near a six-year high. However, some resistance was provided early in the form of a disappointing retail sales report that was issued for April on our shores.

To be sure, the futures did not turn negative on that news, as the scant 0.1% increase in such spending, albeit less than the 0.4% rise that had been forecast, came along with an upward revision in the March result. Specifically, we went from an earlier estimated gain of 1.1% to a much stronger uptick of 1.5% in March--the highest monthly gain in four years. The latest month's results, thus, came against a modestly higher sales base. Moreover, much of the other recent economic metrics have been supportive, and we continue to believe the nation's gross domestic product will increase to about 3% this quarter, from a meager 0.1% gain in the opening period.

Still, the euphoria felt after Monday's market gains, which had been helped along by a pickup in merger news, unsustainable. Such goings on typically encourage equity buying, as they suggest some undervaluation in the market, although at current levels that is a stretch. However, stocks did initially head higher, with the Dow Jones Industrial Average making yet one more all-time intraday high, its third in succession, with an early gain of 40 points. That brought this 30-stock blue-chip composite up to 16,735. The Standard and Poor's 500 Index also tracked higher, gaining a handful of points in the early going.

But this modicum of strength did not last, although the Dow and the S&P 500 did stay in the black for much of the day. However, it was another story for the Russell 2000 (the chief small-cap benchmark), the S&P Mid-Cap 400, and the tech-heavy NASDAQ, all of which spent most of the day in the red. By the close, the Dow was ahead by 20 points; the Standard and Poor's 500 Index was up less than a point; but the NASDAQ was off 14 points, and the small-cap Russell 2000 was in the red by 12 points, or more than a full percentage point.        

Interestingly, it was these latter two indexes that had led the way higher on Monday. Accordingly, the group rotation seen to start the week, went the other way in the latest session. It has been these more speculative indexes that have been underperforming of late, as investors have been seeking less risky sectors to place their bets in this pricey backdrop. Indicative of this shunning of risk was the further fall in the VIX, or the fear gauge, to a near 52-week closing low of 12.13. The year's nadir has been 11.69.

As to other influences besides the economy to affect the market yesterday, there was some earnings news, and like the market, that was largely mixed, with recently pressured Rackspace Hosting (RAX) seeing its stock rise nicely yesterday, as that e-commerce provider exceeded its bottom-line forecast. Also, on the plus side, was McKesson Corp. (MCK), which saw its stock rise nicely after the pharmaceuticals distributor likewise posted better-than-expected earnings in the latest quarter. But it was another story for Elizabeth Arden (RDEN), as the cosmetics provider recorded a large quarterly loss and that issue fell more than 20% on the day. The day ahead should see a few additional reports, although the vast majority of companies have posted their quarterly data. 

Meanwhile, in market action overnight in Asia, we saw some choppiness, with a modest setback in Japan's Nikkei leading the way, while in Europe, the principal bourses are heading lower thus far this morning. Over here, the futures are likewise suggesting a softer opening when trading gets under way in less than an hour from now, with the S&P 500 futures off by more than three points and the NASDAQ futures in the minus column by almost eight points. Also, bond yields are headed down as well, with the 10-year Treasury note returning just 2.57% at this hour.  

Finally, with regard to the nation's economy, the Labor Department a short while ago put out data on the Producer Price Index for April. That gauge of wholesale inflation showed that prices advanced by a stronger-than-expected 0.6% last month. Expectations had been for a gain of just 0.2%. The big uptick came from escalating food prices, most likely evolving from the damage to crops caused by the unrelenting winter. Energy prices rose just 0.1%. Excluding food and energy, the so-called core PPI gained 0.3%, which hardly suggests a serious inflation problem at the producer or wholesale level. - Harvey S. Katz  

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