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After The Close - The stock market opened sharply higher this morning, and managed to maintain most of these gains through the afternoon. In addition to a favorable batch of economic reports, traders were hopeful that relations with China, our largest trading partner, might soon improve. At the close of the day, the Dow Jones Industrial Average was ahead 147 points, the broader S&P 500 Index was up 15 points; and the NASDAQ was higher by 59 points. Market breadth was clearly supportive with winners outpacing losers by a comfortable margin on the NYSE. From a sector perspective, the technology and healthcare names displayed leadership, while the consumer non-cyclical issues lagged the pack.

Traders received some encouraging economic news this morning. Specifically, initial jobless claims dipped to 204,000 during the week of September 8th, which was a healthy reading. Continuing claims also moved lower. The employment situation remains in good shape. Meanwhile, the Consumer Price Index (CPI) rose just 0.2% in August, which was in line with expectations. Of note, the core number, which excludes food and energy prices, rose only 0.1% for the month. Even so, it seems likely that a 0.25% hike will be in store when the Federal Reserve meets later this month.

In the corporate arena, shares of The Kroger Co. (KR) sank in price today, in response to a weak report. However, shares of Tailored Brands (TLRD) gained ground after the apparel retailer posted encouraging results.

Technically, the stock market continues to hold up well, with the many of the widely followed averages near record high ground. Looking ahead, the third quarter will soon draw to a close, and traders will be sifting through the numerous corporate reports being released for guidance.  - 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 - After an uneven first two trading days of the week, stocks opened the session yesterday on a similarly mixed note, with the Dow Jones Industrial Average rising in early dealings, while the tech-heavy NASDAQ fell back somewhat on concerns in the tech sector. Then, as we passed the one-hour mark of trading, stocks pulled back in unison, with the Dow easing by some 25 points, but the NASDAQ, already weak, tumbling by more than 80 points, or just over 1%. Leading the NASDAQ lower were some high-profile tech names, including Apple (AAPLFree Apple Stock Report), which is launching new phones, and had led the NASDAQ's advance on Tuesday.

Joining the move lower were the S&P Mid-Cap 400 and the small-cap dominated Russell 2000. Bucking the generally weaker trend were the food processing stocks, which featured nice gains by Kraft Heinz (KHC), which had been under pressure for months. Then, after that brief sojourn into negative territory, the Dow quickly righted itself, so that as we approached the noon hour in New York, the blue chip index was back comfortably in the plus column, with better than a 100-point gain. All of this was taking place as we headed into the afternoon and the lead bank's issuance of the Beige Book economic summation.

What turned the equity market around in late morning was a report that the United States was proposing new trade talks with China. It has been the growing rift between the two nations that has contributed to the choppiness in the market at times over the past several months. On the other hand, stocks were being pressured on the NASDAQ and the small-cap indexes by concerns in the semiconductor space. These latter issues have been under pressure of late due to heightened worries about of slowing memory-chip demand. Meantime, the Dow continued to gain traction as the morning concluded.

In other news, the government reported, before the stock market opened, that the Producer Price Index had shown a 0.1% drop in August; a gain of 0.2% had been the forecast. That showing allayed some of the fears engendered by last Friday's sharp rise in average hourly wages, an increase that had some fearing a jump in inflation. That report likely helped sentiment somewhat, but judging by the turnaround in the Dow, which continued into the lunch hour, the big issue was still trade and our tense relationship with China. Onrushing Hurricane Florence, seen as a threat to the Carolinas, was another concern.

The market would then continue higher, but lose some of its mid-morning steam, as we headed toward the Beige Book's release. True, there was a brief rally after the noon hour, but the gains in the Dow would fully disappear as we reached the 2:00 PM (EDT) hour of that issuance. Interestingly, the earlier large deficits in the NASDAQ eased off somewhat, even as the Dow softened, thereby attesting to the sector rotation now at work. Regarding the Beige Book, which is a Feral Reserve published look at the economy, noted that most of the 12 regions of the nation were expanding at a moderate pace through the end of August.

Specifically, consumer spending and manufacturing were expanding at a moderate pace. Transportation activity, too, grew, with some areas seeing stellar improvement. Commercial real estate, however, was mixed, although lending activity grew throughout the nation. Finally, labor markets were characterized as tight, with resultant shortages, and prices rising at a modest to moderate rate. In all, the report signaled that the economy was still doing quite well as we move through the final weeks of the third quarter, with our sense continuing to be that growth would comfortably exceed 3% this quarter.

The impact of the Beige Book was minimal, meanwhile, and the market continued on its slightly lower path until the final half hour when the Dow strengthened for a second time in the session. The upturn in that index helped the other composites, driving stocks forward modestly. The developments on trade were factors on the late turn, even as fears about Hurricane Florence dimmed optimism somewhat. In all, the Dow ended the session up 28 points, while the NASDAQ finished off 18 points in another bifurcated session. A late assessment by 3M Company (MMMFree 3M Stock Report) that higher materials costs would crimp margins hurt sentiment a bit.

Looking ahead to a new day and the penultimate session of the week, we see that shares were strongly higher in Asia in the overnight hours, while in Europe, the leading bourses are tracking a slightly positive trail. In other key markets, oil, up about 1.4% yesterday, is off more than 1% this morning, while yields on the 10-year Treasury note, which eased to 2.96%, in late dealings yesterday, are now at 2.97%. Finally, our equity futures are pointing to a higher opening when trading resumes later 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.