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After The Close - The stock market opened higher this morning, and managed to extend its gains through the late afternoon. Of note, traders seemed to be feeling a bit better about the economy today. The September jobs report, while not overly encouraging, probably helped calm investor fears about a worse outcome. By the end of the session, the Dow Jones Industrial Average was ahead 372 points; the broader S&P 500 Index was up 41 points; and the NASDAQ was higher by 110 points.

Market breadth showed widespread support for stocks, as winners outpaced losers by a wide margin on the NYSE. From a sector perspective, the utilities, consumer, healthcare, and technology names displayed leadership. Meanwhile, the basic materials issues lagged somewhat, but were still higher for the day.

In economic news, this morning the government released the September employment report. Specifically, nonfarm payrolls increased by 136,000 last month. Although a slightly higher reading had been anticipated, this result was likely good enough to satisfy Wall Street. Furthermore, it should be mentioned that the headline unemployment number fell to 3.5% for the month, which was better than had been expected, and may have helped put a positive spin on the report. In addition, the lukewarm employment numbers still leaves room for the Federal Reserve to reduce interest rates, quite possibly at its meeting later this month. Elsewhere, in another report, the nation’s trade gap widened to $54.9 billion in the month of August, which was in line with the consensus view, and not too surprising.

In the corporate arena, few major profit reports were released over the past 24 hours. Nonetheless, shares of Costco (COST) traded modestly higher after the retailer issued a respectable release. Elsewhere, shares of HP Inc. (HPQ) sank after the technology company announced a restructuring plan, including a large round of employee layoffs.

Technically, the month of October has earned a reputation for volatility, and that seems to be the case again this year. Looking ahead, investors will be watching, as the trade talks between the U.S. and China take place next week. In addition, the third-quarter earnings season will be starting up. Finally, the political landscape, which has become quite divided, will also be an area of concern.  - 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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Before The Bell - It certainly has been a rocky start to the fourth quarter on Wall Street. To wit, after the stock market moved to and fro through the summer months, culminating in a mixed three-month performance, equities plummeted to begin the final stanza. In all, the Dow Jones Industrial Average fell 344 points on Tuesday, tumbled another 494 points on Wednesday, and shed more than 330 points in the early going yesterday. The precipitating factor in all this was a set of dour economic numbers. Here, we saw a contraction in manufacturing, a weak reading in private-sector payroll growth, and a slowing rate of non-manufacturing activity. 

This last item was a shocker. After comparatively strong readings during much of this year and expectations that this index, put out by the Institute for Supply Management, would come in at a solid 55.3--or well into expansion territory--the survey showed just a 52.6 score. True, that was notably above the manufacturing outcome of 47.8, which affirmed a contraction in the industrial sector, but it also was a worrisome slowdown in the services arena. So, stocks faltered badly in the early going. However, traders soon saw this weak outcome as an opportunity for the Federal Reserve to more aggressively reduce interest rates.

This shifting sentiment allowed the market to stage an about face as the morning wore on and as we reached the two-hour mark of trading, the Dow Industrials, the S&P 500 Index, and the NASDAQ all had turned positive, while the small-cap Russell 2000 was still lagging. In the meantime, the odds of a recession evolving in the next year are rising, although our sense is that such a reversal will not occur over that span. In any event, the pressure will likely increase on the Fed to make further monetary accommodations--and perhaps to do so at the next meeting later this month.     

The comeback would continue throughout the remainder of the morning and into the afternoon, with the Dow's advance moving into triple digits as traders returned from lunch. The recovery was especially strong in the NASDAQ, with technology being among the leaders on the upside. The strength then would persist into the final hour, before some caution ahead of the just-released jobs report (see below) would be seen. However, this was just a slight hiccup and as the session concluded, the market's upturn was back on track, with the final numbers showing that the recovery reached its high point at the close.

In all, the Dow would finish ahead by 122 points; the S&P 500 would add 23 points; and the NASDAQ, leading the way, would rise 87 points. However, yields on the 10-year Treasury note fell, easing back to just 1.54%, as recession fears have started to rise. Now, after this big turnaround in New York, we see that shares in Asia were lower in overnight dealings, especially in Hong Kong, while in Europe, the key bourses are now edging upwards. Elsewhere, oil prices are higher, but still set for another weekly loss and Treasury yields are now edging upward, helped by a somewhat reassuring jobs report.  

As to that employment issuance, the government has just reported that non-farm payrolls rose by 136,000 in September; an uptick of 145,000 had been the consensus forecast. In other aspects of the report, the unemployment rate fell further, clocking in at 3.5% for September -- a 50-year low. Also, the labor-force participation rate held steady as 63.2%. Moreover, total employment growth for July was revised up from 159,000 to 166,000; it was revised up for August from 130,000 to 168,000. Finally, average hourly wages eased by a penny after rising by $0.11 in August.

Overall, this was a reasonable report, but clearly shows the deceleration now under way in the economy. Yesterday, recession fears were increasing and so were expectations that the Federal Reserve will cut interest rates again this year. We think the latter has a good chance of coming true. We are not on board about a recession evolving in the next year, however. As to the stock market, the futures, off modestly before the report, are now edging somewhat higher, presaging a decent opening when live trading begins.   - Harvey S. Katz, CFA 

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