After The Close - Volatility continues to rise on Wall Street after a stretch where equities had tracked an orderly path higher. Indeed, much like last week, it has been a rollercoaster thus far this week, with yesterday’s sharp gains giving way to some profit taking today. The heaviest selling took place in the Dow Jones Industrial Average and the small-cap Russell 2000.  The NASDAQ and the broader S&P 500, after trading close to the neutral line for most of the afternoon, also sold off some in the final hour, but not as noticeably. There was clearly a negative tone to trading today, with declining issues outnumbering advancers by a sizable margin on both the New York Stock Exchange and the NASDAQ.

The investment community’s attention turned to the corporate world today, as earnings season heated up. Investors were greeted by mostly disappointing news on that front. After yesterday’s market close, we received lackluster reports from technology giants International Business Machines (IBM) and Intel (INTC). IBM missed its revenue forecast, while Intel’s quarterly results failed to impress many traders. Both issues were weaker today and weighed on the performances of the technology and conglomerate sectors. Conversely, shares of oil services giant Halliburton (HAL) and Internet search giant Yahoo! (YHOO) rose after both companies reported a jump in revenues. After the close of trading, fellow Dow-30 component American Express (AXP) was due to release its latest quarterly figures.

There was other noteworthy news from Corporate America today in addition to the bevy of earnings reports. Specifically, SXC Health Solutions (SXCI) announced that it plans to buy pharmacy benefits manager Catalyst Health Solutions (CHSI) for roughly $4.4 billion. Shares of both companies finished higher on the merger and acquisition news.

It was a quiet day on the U.S. economic front after a busy start to the week. But that will change tomorrow as reports on initial weekly unemployment claims, the leading indicators, and March existing home sales are due. The Philadelphia Fed is also scheduled to release its latest reading on manufacturing activity for the greater Philadelphia region.

However, we did get some economic news on Europe, including reports showing weaker-than-expected construction data for the European Union. Eyes are also on the ongoing sovereign-debt problems of Spain, though most prominent European finance leaders believe that struggling country is not in need of any external support for now. As noted in our earlier commentary, the major European bourses finished in the red during the latest session.

Looking ahead to tomorrow, our sense is that earnings news will remain the primary focus of investors, with five Dow-30 companies on the docket. Before the market opens, we will receive the latest quarterly results from DuPont (DD), Bank of America (BAC), Verizon Communications (VZ), and Travelers (TRV). Then after the close of trading, software giant Microsoft (MSFT) takes center stage. – William G. Ferguson

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


12:30 PM ET - The U.S. stock market is taking a breather, after a strong session yesterday. As we pass the noon hour in New York, the major averages are still near their session lows, suggesting some weakness. The Dow Jones Industrial Average is off 47 points (-0.4%); the S&P 500 Index is down four points (-0.3%); and the NASDAQ is lower by 11 points (-0.4%). Market breadth is negative, but not overwhelmingly so, as declining stocks are outnumbering advancers by about 2-to-1 on the NYSE.

The market is being led lower by the technology sector. Notably the Philadelphia Semiconductor Index (SOX) is off roughly 1% with weakness in Cree (CREE). The financial stocks are also quite weak today, with losses in the insurers. The transports are bucking the downward move, and there is some relative strength in the consumer names.

Traders got little encouragement from the international markets today. In Europe, the major bourses put in a weak session. Frances’ CAC-40 was lower by about 1.5%, with smaller declines on Germany’s DAX and on Britain’s FTSE-100.

There has been little economic news out today. Tomorrow is a full day, though, as we get a look at the weekly initial and continuing jobless claims data, existing home sales, the Philadelphia Fed’s regional report, and the Conference Board’s leading Indicators issuance. 

Meanwhile, traders are looking at the parade of corporate earnings reports. In the technology sector, we heard from a few leaders today. Specifically, shares of IBM (IBM Free IBM Stock Report) are off sharply, after that company posted disappointing top-line results. Intel (INTC Free Intel Stock Report) stock is also a bit weaker, although the semiconductor giant posted decent figures. Elsewhere in technology, Seagate (STX) stock is up after the disk drive maker posted solid results. Yahoo! (YHOO) stock is also trading higher on a decent issuance. Ultimately, the quality of the earnings season will play a major role in determining the direction of the stock market for the next few weeks, so it is important to keep an eye on the results as they come out.

Technically, the stock market put in a strong session yesterday, with broad-based gains. Trading volumes were not as heavy as they could have been. However, it should be noted that low trading volumes in general have been a source of worry for some traders over the past few months. The S&P 500 Index is still above its 50-day moving average, located at 1378, and for technicians that remains a key area to watch. - Adam Rosner 

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

Stocks to Watch from The Survey – IBM(IBMFree IBM Stock Report) and Intel (INTCFree Intel Stock Report), two technology companies that are also Dow-30 components, reported first-quarter results last night. Both companies delivered better-than-expected earnings, but investors took issue with other aspects of their reports, and bid both stocks lower in premarket trading this morning.

After the market closed yesterday, Berkshire Hathaway (BRKB) CEO Warren Buffett disclosed that he has been diagnosed with stage 1 prostate cancer. Although his condition was described as “not remotely life-threatening or even debilitating in any meaningful way”, the news raised new questions about the famed investor’s succession plans.

Shares of Genworth Financial (GNW) are down sharply in the premarket, after the insurance and financial services company said that it was delaying the planned IPO of its Australian mortgage insurance business due to difficult conditions in that market.

We are now in the thick of earnings season, and a number of companies are on the calendar today, including financials BlackRock (BLK) and Bank of New York Mellon (BK), drug maker Abbott Laboratories (ABT), and energy services provider Halliburton (HAL). After the market closes, Dow-30 component American Express (AXPFree American Express Stock Report), restaurant chain Yum! Brands (YUM), and online auctioneer eBay (EBAY) are scheduled to report. – Matthew E. Spencer

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


Before The Bell - The bulls were out in force yesterday, driven by a drop in yields on short-term fixed-income instruments in Spain and a succession of generally better-than-expected earnings from such high-profile Dow stocks as Coca-Cola (KOFree Coca-Cola Stock Report) and Johnson & Johnson (JNJFree J&J Stock Report). By the close of trading, the key averages were all strongly higher led by the tech-heavy NASDAQ, which added 54 points, or 1.82%. The Dow jumped by 194 points (or 1.50%), meanwhile, after being about 210 points higher at one point, while the Standard and Poor's 500 Index rose by 21 points, or a slightly better percentage increase than for the Dow, but trailing the NASDAQ gain.

Then, after the close, two tech stalwarts, IBM (IBMFree IBM Stock Report) and Intel (INTCFree Intel Stock Report), reported their first-quarter results, and while the latter beat most forecasts, and the IBM profit gain of 7% was certainly respectable, both stocks are indicated lower this morning, as each, it would seem, failed to top the so-called whisper number. In IBM's case, there also were some concerns about lagging hardware sales.

Meantime, this mixed picture carried over to the economic arena yesterday, as data were issued showing a surprise decline in U.S. housing starts in March, but a welcome, if surprising, gain in building permits, which are a more telling metric due to their forward looking nature. At the same time, a report from the Commerce Department showed that industrial production had flattened out last month, while capacity utilization had eased a touch. Neither of these latter reports was especially uplifting, but with blue chip earnings on the rise at Coke and at J&J, and with investment banking giant Goldman Sachs (GS) putting out solid results as well and raising its quarterly dividend, the focus was clearly on the bottom line in the latest trading session, and not on the economy.

That focus on earnings, moreover, is likely to continue in the days to come, as a succession of high-profile names will be issuing their results over the next couple of weeks, with financial services behemoth and Dow-30 component American Express (AXPFree Amex Stock Report) on the docket after the close of trading this afternoon. That will be followed by reports from five Dow stocks tomorrow and a good number of other well-known companies over the balance of the week, as earnings season really gets going.

As for the day ahead, in addition to earnings news, we have seen the European bourses give back some ground on the eve of Spain's latest debt auction, after some strong gains in yesterday's trading on the Continent and in London. For the most part, the market declines in the euro zone this morning have been modest, but Madrid's benchmark IBEX has tumbled by about three percent, while the principal index in Milan was off by a percentage point and a half earlier. Over here, however, some earlier sharper losses in our futures have been pared a bit, and with about a half hour to go before the start of the new trading day, the S&P, the Dow, and NASDAQ futures are all off modestly, with much of the setback in the Dow futures being occasioned by a presumptive four-point initial drop in IBM shares.

Finally, there is the economy. There, after some fireworks the past two days, with the aforementioned housing and industrial output data yesterday and Monday's solid report on retail sales, the economy will take a break today. But tomorrow, the business beat will pick up with the release of reports on first-time jobless claims, the leading indicators, existing home sales, and the Philadelphia Fed. All in all, there is the potential for continued stepped-up volatility in the equity market following months of reduced gyrations, as equities had tracked an orderly path higher. Now, with prices more elevated, it may take some really good news to propel stocks materially higher. – Harvey S. Katz

At the time of this article's writing, the author had positions in INTC.