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After The Close - After shaking off the morning cobwebs on their way to record highs mid-session, the three large-cap indexes pared gains on Wednesday afternoon. The NASDAQ 100 registered the biggest swing when it fell swiftly into the red a little after lunch, before gradually climbing back into positive territory as the closing bell approached. The Dow Jones Industrial Average and S&P 500 both followed less severe, but similarly fated paths, wrapping up the day respectably above their respective breakeven lines.

The selling of mid- and small-cap equities led to a roughly even spread of advancing and declining shares. This weakness may reflect some skittishness ahead of the upcoming quarterly earnings season. Smaller issue shares are not expected perform as well as their large-cap counterparts when they report results in the coming weeks. This mixed tone was echoed among the major market sectors. Overall strength in the utilities and consumer cyclicals sectors was offset by weakness in the energy, telecommunications, and technology industries.

Meanwhile, oil prices slipped for the third consecutive day and now sit just below the $50 per-barrel mark. A larger-than-expected rise in U.S. crude exports spurred the afternoon’s downturn, despite optimistic overtures earlier in the day from Vladimir Putin. Russia’s President indicated OPEC’s drilling accord could be extended through 2018. Trading this time of the year is usually low ahead of the winter heating season, so we suspect some profit taking contributed to the recent softness.

Looking forward, Friday’s employment report from the Labor Department will be closely watched. The September data are expected to be lower, in large part due to impactful hurricanes in Florida and Texas. Noting the recent evidence from the Institute for Supply Management that the economy is strong (this week’s service and manufacturing updates were both well-received), we believe the fallout from a modestly lower jobs figure could be muted. Thereafter, corporate earnings season will play a larger role in influencing trade as a number of companies prepare to unveil updated quarterly data. - Robert Harrington

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

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12:00 PM EDT - Stocks today are edging higher following a slow start after the major averages rallied for more than a week to one record after another. Right around the noon hour on the East Coast, the Dow Jones Industrial Average is up 29 points, and the NASDAQ and the S&P 500 are up a few points. Market breadth is tilted modestly to the upside on both the New York Stock Exchange and the NASDAQ.

As far as the economy goes, investors got another piece of good news this morning when the Institute for Supply Management released a report showing that its non-manufacturing index came in above expectations. The report covers the service sector, which comprises the largest part of the economy. Combined with the favorable ISM report on manufacturing earlier this week, the economy would appear to be running on all cylinders.

On Friday, an important gauge of the labor market will come in the form of the Labor Department’s employment report for September. Expectations are low for job creation last month, though, in the wake of notable hurricane disruption in Texas and Florida.

Today’s less-than-stellar job report from Automatic Data Processing (ADP) gave an indication of the recent weakness in the labor market. ADP showed a slim 135,000 positions were added in September. Friday’s government data could come in even lower, at perhaps even less than 100,000 new jobs added. But there is little reason to believe hiring won’t pick up again, given the overall strength of the economy.

In the oil market, statistics released by the Energy Department this morning showed a big draw in oil inventories, providing support for crude oil prices. In addition, statements by Russia’s President Putin seemed to indicate support for a continuation of a pact with OPEC to maintain off-peak production levels through 2018. That is also helping to keep oil quotations above $50 a barrel, during what is typically a slow period for energy demand ahead of the winter heating season.

Among individual stocks, shares of Mylan (MYL) are soaring after the company received FDA approval for a generic drug to treat multiple sclerosis. On the downside, TEVA Pharmaceutical (TEVA) ADRs are down notably. TEVA makes the nongeneric version.  - Robert Mitkowski

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

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Before The Bell - Wall Street started the fourth quarter on a definite up note on Monday, with the major averages all advancing in lockstep, led by the Dow Jones Industrial Average, which soared by 153 points. Moreover, following this early month advance, which resulted in a trio of all-time highs for the large-cap Dow, S&P 500, and the NASDAQ, the stock market began yesterday's session likewise to the upside. Indeed, save for a few wrinkles during the morning, most notably the NASDAQ, this trio stayed in positive territory for the most part. However, the smaller-cap indexes, namely the S&P Mid-Cap 400 and the Russell 2000 were a bit under water early on.

As for the market's influences, one day after the Institute for Supply Management reported a strong gain in manufacturing activity for September, investors remained upbeat about third-quarter earnings on the eve of reporting season. Expectations are that profits for the just-ended three months will have increased by 4.2%. But the recent experience shows that early net estimates usually are surpassed by several percentage points. With equity prices as extended as they are, the Street probably is banking on this upbeat outcome once again.       

Also, there is the Federal Reserve, which seems determined not to dispatch the long bull market by aggressively lifting interest rates anytime soon. In fact, we continue to believe that the fast-concluding year will see at most one more rate hike--and that increase is unlikely to come until the December FOMC meeting. As such, stocks rallied anew yesterday, with the Dow's gain briefly topping 75 points as the morning drew to a close. Leading the way higher in the early going were shares of Intel (INTC - Free Intel Stock Report) and Verizon (VZ - Free Verizon Stock Report), with both stocks coming on strongly since the start of the third quarter following unimposing first-half performances. 

The positive beat then continued, with the Dow's advance exceeding 85 points by mid-afternoon. Improved showings likewise were made by the other large-cap indexes, while the smaller-cap composite, weak before the lunch hour, firmed up, too. Breaking the advance down as we moved inside the final hour, there were eight sectors gaining among the 10 categories, with basic materials and telecom leading the way, while advancing issues were ahead of declining stocks by about a 15-to-13 margin on the Big Board. A similar ratio was seen on the NASDAQ.  

Things did not change all that much as the final hour began, and as we moved toward the close, the averages were all holding near the day's high, with the Dow ascending to the 80-point mark to close at a record 22,641. Modest gains, meantime, were tallied by the S&P 500, the NASDAQ, and the S&P Mid-Cap 400. In addition to the strong ISM manufacturing issuance, traders were emboldened by a solid reading on September car sales. The gains there were realized in spite of the damage and lost business from the recent hurricanes. Now, Wall Street will gear up for additional economic numbers this week, highlighted by Friday's employment issuance. 

Now, a new day starts, and as we peer overseas, we see that stocks were mostly higher in Asia overnight, while in Europe, the key bourses are trading with early losses on concerns about Catalonia. At the same time, in other markets, Treasury yields, off slightly yesterday, are now down again; gold is falling again after recent weakness; and oil prices are lower once more. Finally, the equity futures point to a somewhat softer start when trading commences at 9:30 (EDT) this morning.   - Harvey S. Katz, CFA 

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