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After The Close - A disappointing jobs report set the stage for daylong profit taking on Friday. The back-and-forth was broad-based, but mostly modest. The consumer non-cyclicals and telecommunications sectors were among the biggest laggards. Energy, impacted more by industry-specific developments than the Labor Department’s release, shed more-than 1% in aggregate value. Overall, breadth was negative, with the number of declining issues nearly double that of gaining shares.

The pre-market nonfarm payroll report revealed a 33,000 job decrease in the month of September, a far cry from the forecasted gain of 90,000.  Moreover, a slight increase to last month’s figure was overshadowed by a 51,000 reduction to the July figure. A series of hurricanes in the Southeast and Gulf regions was a major factor in the downward trend. In the same report, however, the unemployment rate dipped to 4.2%, while salaries advanced 0.5%. So, we’re inclined to believe today’s skittishness is temporary.

Meanwhile, U.S. crude oil prices slipped nearly 3% as concerns over inventory levels reemerged. Russia modified comments made by Vladimir Putin on Thursday that seemed to indicate the extension of OPEC’s drilling accord would run through the end of next year. While that possibility is by no means off the table, traders took advantage of the added uncertainty and the elevated prices. The reopening of Libya’s largest oil field’s reopening also weighed on valuations today. At the end of the day, the price for domestic U.S. crude was $49.29, perhaps snapping the recent streak of bullishness.

When the closing bell rang, only the tech-centric NASDAQ 100 managed to finish in positive territory (the technology sector was also the only gaining market sector today). As third-quarter earnings season approaches, we see that the Dow Jones Industrial Average and S&P 500 are also sitting near their recently-set highs after paring some of their losses in the final minutes.

Looking forward, small-cap issues figure to see some selling pressure in the coming weeks as the performance outlook there is less sanguine. But while there may be some tug-of-war between the bulls and bears as it related to market breadth, strong expectations for larger corporations and a cautious optimism for tax reform ought to help this bull market advance over the near term. - 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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12:10 PM EDT - The stock market opened modestly lower today, and has been unable to meaningfully reverse course, so far. At just past the noon hour in New York, the Dow Jones Industrial Average is down roughly 35 points; the broader S&P 500 Index is off seven points; and the NASDAQ is lower by eight points. Market breadth is negative, with losers easily ahead of winners on the NYSE. From a sector perspective, the cyclical energy and basic materials issues are quite weak, while the healthcare names are managing to make some progress.

Traders received a key economic release this morning, and some may have been caught off guard. Specifically, nonfarm payrolls decreased by 33,000 during the month of September, while most analysts had been expecting an increase in jobs of some 90,000. The weakness during the month was largely attributed to disruptions stemming from hurricanes in Texas and Florida. Meanwhile, the nation’s headline unemployment rate actually dipped to 4.2%, while hourly wages moved up 0.5% during the month. Many on Wall Street seem to be viewing this report as a temporary setback, and are likely looking for the job markets to rebound by later this year.

Finally, a few corporations weighed in with their financial results over the past 24 hours. Shares of Costco (COST) are retreating today, as investors seem to have concerns about the retail giant’s business outlook. In addition, we heard from Yum China Holdings. That stock is up nominally, as the restaurant operator delivered a respectable report.

Technically, the stock market has been quite strong lately, and has rebounded quickly from periodic pullbacks. Traders seem to be betting that the corporate sector will continue to expand and that the Administration in Washington will be able to make progress with its business-friendly agenda, notably tax reform.

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 - The long-running, but suddenly rejuvenated, bull market continues to roar. In fact, following a solid September and a rather upbeat third quarter, overall, equities began the fourth quarter on a roll, as record highs were set by the three main large-cap composites,  specifically, the Dow Jones Industrial Average, the S&P 500 Index, and the NASDAQ. What's more, after a strong Monday, and fairly decent performances on Tuesday and Wednesday, the Street started out Thursday on a further run higher, with additional records being set as the morning moved along. 

Much of this latest surge, which saw the Dow surpass 22,750 on heavy buying in a range of issues, reflected optimism that tax reform, a popular, but somewhat contentious, issue will get done. Also, of note, the market has been lifted early this period by a strong late-third-quarter economic performance in several areas. Of note, a survey issued to start the week showed a solid further increase in manufacturing activity across the country in September. This was followed on Wednesday by another good showing in non-manufacturing. With both areas firing on all cylinders, optimism about growth in the months to come is increasing.  

To be sure, the toll exacted by the deadly trio of hurricanes that struck Texas, Florida, and Puerto Rico in recent weeks did exact a penalty on third-quarter GDP growth, perhaps limiting that period's increase in output to around 2%--not the 3% expected before those devastating events. That deceleration in business activity should be comparatively short-lived, as rebuilding efforts in the current quarter, but more extensively, in 2018 should nudge GDP growth forward, with growth perhaps topping 3% for a time in the new year. 

Then, there is earnings. Here, expectations remain fairly positive, with forecasts generally calling for a better-than-4% increase in third-quarter postings. So, the market would seem to have reasons to continue rising, the rich earnings multiples now in place notwithstanding. As such, yesterday's glowing early performance was somewhat logical. In fact, the gains continued coming as the morning concluded and the afternoon got under way, with the Dow sporting a triple-digit point advance as we reached the noon hour in New York. This composite continued to do well in the afternoon, as it battled to stay in that 100-point plus neighborhood.

Meanwhile, the S&P 500 Index and the NASDAQ did proportionately better, with the latter composite climbing by some two-thirds of a percentage point by mid-afternoon. All told, the S&P 500 ascended the 2,550 mark, while the NASDAQ approached 6,600. As the session wound down, the big uncertainty was the pending release of the September employment report. That issuance, which was made minutes ago, showed that the nation had surprisingly lost 33,000 jobs last month (more below), a total that was kept well below the recent monthly trend by the aforementioned succession of hurricanes. A gain of 90,000 had been the forecast.

In all, the market sustained its mid-session gains and then some. Indeed, with a modest late burst of buying, the Dow closed up shop with a gain of 114 points. Also, of note, the S&P 500 ended matters above 2,550 with a final advance of 14 points, while the NASDAQ, which led the way on a comeback in some technology stalwarts, added 51 points, putting that index within 15 points of 6,600. Small gains were tallied by the S&P Mid-Cap 400 and the Russell 2000. Now, the test will be to complete a big first week of October with a strong close.

And on that score, we see that stocks in Asia were higher overnight ahead of the employment report in the United States, while in Europe, the bourses are mixed at this hour. Meanwhile, on the labor front, in addition to the dour hurricane-affected job decline in September, the Labor Department reported that the job growth estimate for July was revised down from 189,000 to 138,000. In August, the estimated tally was revised up from 156,000 to 169,000. Additionally, the unemployment rate was pared from 4.4% in August to 4.2% last month, most likely because fewer people were looking for work last month.

The Department additionally noted that the late-summer and early fall hurricanes reduced the payroll levels for September; but it also opened that there was not an effect on the unemployment rate. Further, the labor-force participation rate rose from 62.9% in both July and August to 63.1% in September. Also gleaned from the report were the following: the average workweek was unchanged last month and average hourly earnings rose by a solid $0.12 in September. This last item was somewhat reassuring. In all, this was a sobering report, but given the weather impact one that probably will not have much of an effect on the Federal Reserve. As to the futures, the early read is now modestly lower.   - Harvey S. Katz 

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