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After The Close - Early in trading, the Dow Jones Industrial Average reached another all-time high, hitting 26,951.81 (up 177.87 points from yesterday’s close). In addition, the S&P 500 and NASDAQ both started the day off strongly, likely helped by the good private-sector jobs report from Automatic Data Processors (ADP) and non-manufacturing data (more below). Later in the day, the markets reversed course with the S&P losing all of the day’s gains at one point, as the 10-year Treasury note broke out of its trading range today, hitting a multi-year high at 3.18% before retreating some. These surging rates spooked the investment community. This was probably a result of good economic data causing investors to switch out of bonds into the stock market. The market showed little breadth with advancers and decliners largely even on the day. Financial and energy stocks outpaced the broader market, while interest-rate sensitive utility and REIT issues fell on the day. 

Additionally, the jobs report stated that 230,000 jobs were added in the private sector in September, which is the highest figure in seven months. Too, a retail group stated that it expects holiday sales to be up between 4.3% and 4.8% year over year, suggesting that retail spending will show solid improvement in the coming quarters. Too, it augurs well for holiday hiring. Meanwhile, the ISM non-manufacturing PMI rose to 61.6 in September, which was the highest level since April, 2006, suggesting that the service-sector economy is booming.

In other news, Acuity Brands (AYI) fell sharply on the day, after its fiscal fourth-quarter results underwhelmed the Street. Meantime, Tempur Sealy (TPX) rose on rumors that a major private competitor is facing immediate bankruptcy risk.

Looking ahead, initial jobless claims will be reported before the market opens tomorrow, as will factory orders for August. In addition, Costco Wholesale Corp. (COST) and Constellation Brands (STZ) are expected to report earnings results before the bell.  - John E. Seibert III

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

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Before The Bell - Following a mixed performance on Monday to start a new week, month, and quarter, Wall Street began yesterday's session on a further uneven note, with the Dow Jones Industrial Average, benefiting from strength in the shares of Intel (INTCFree Intel Stock Report) and the lingering positive sentiment from the earlier trade deal with Canada, jumped out strongly in the early going, with the blue chip composite rising by some 135 points as the morning concluded. Conversely, the S&P 500 Index was ahead just modestly; the NASDAQ was fairly flat; and the S&P Mid-Cap 400 and the small-cap Russell 2000 both were lower.

Meanwhile, the advance in Intel was matched by improvement in several other chipmakers. The big news continued to be trade, however, as the deal with Canada (which joined with Mexico in a replacement for NAFTA) increased optimism among some traders that a deal could eventually be made with China, a far more consequential import threat to our nation. At this time, though, there seems to be no breakthrough at hand. Elsewhere, investors were still digesting the slightly slower place of manufacturing activity in August and awaiting this morning's companion report on non-manufacturing activity.

The large-cap indexes, with some belated help from the NASDAQ, then strengthened further as the afternoon began, with the Dow climbing to more than 180 points. That put the index at an all-time intra-day high above 26,820. The S&P 500 advanced to within 10 points of a record, but the NASDAQ just could not muster much sustained strength, alternating between modest gains and small losses. The smaller-cap composites stayed in the minus column for much of the afternoon. Once more, optimism about global trade overcame concerns about political discord at home and rising interest rates.

As has been the case on days in which the Dow has advanced strongly of late, the other composites have often lagged. That was so on Monday and again yesterday. Sector rotation and profit taking after a long run have been at work in most of those instances. In other news yesterday, Fed Chair Jerome Powell, said that should inflation, which has been quite tame throughout the long business expansion, start to move materially higher, the lead bank would respond aggressively. Up until now, the Fed has taken a cautious monetary stance, even as it has raised interest rates three times this year.

Regarding the market, it did weaken as the afternoon wound down, with the NASDAQ falling to quite a substantial late-day loss. The Dow's advance also lessened, although it remained comfortably in the black for the duration. Losses of some note continued among the smaller-cap indexes. Meantime, in other news, car sales came out and they were rather undistinguished, especially for U.S.-based companies as has been the case for some time now. As was the case with the Powell musings, the car sales data had little immediate impact on trading.

This split decision lingered into the close, so that when all the tallies were in, the Dow had gained 123 points, after briefly sinking to a gain shy of 100 points. The S&P 500 was nominally lower, while the NASDAQ surrendered 38 points. The Russell 2000 also hit the skids in late dealings. Further, most of the key sectors fall on the day as did stocks on the NYSE by a ratio of three-to-two. Looking ahead to a new day now, we see that stocks were generally lower in Asia overnight. In Europe, the major bourses are trending higher. In other markets, oil is flat; Treasury yields are gaining ahead of U.S. economic data; and U.S. futures are suggesting a higher opening this morning. – Harvey S. Katz, CFA

At the time of this article’s writing, the author held positions in one or more of the companies mentioned.