After The Bell - Wall Street got off to a good start in this holiday-shortened trading week, with the bulls in control from the get-go—and at times rather decidedly. The U.S. equity market was up sharply only minutes into the trading session, highlighted by a nearly 160-point gain in the Dow Jones Industrial Average. Trading was helped by news from Europe, particularly Greece (more below). Then, following a disappointing report on consumer confidence (issued at 10:00 A.M. EDT), a good portion of the earlier gains were pared before the equity indexes stabilized early in the second half, and buying once again intensified in the final hour of trading to push the indexes within shouting distance of their intra-day highs. At the closing bell, the Dow-30, the NASDAQ, and the broader S&P 500 Index were 126, 33, and 15 points higher, respectively. Advancing issues led decliners by a sizable margin on both the Big Board and the NASDAQ.

As noted, the tidings from Europe were on the minds of investors today. The investment community appeared pleased with some election polls in Greece that suggest the conservative parties may be receiving some more support as new elections near. A favorable outcome for the conservative parties would ease concerns that the financially struggling nation would default on its debt obligations and may be forced out of the euro zone, as austerity measures put in place earlier this year to tackle the country’s sovereign-debt problems would probably continue. This news helped divert attention from Spain, which has its own share of sovereign-debt problems—yields on Spain’s debt continue to rise. The major European bourses were up nicely today, with gains of more than 1% recorded by Germany’s DAX and France’s CAC-40. The euro, which has struggled mightily over the last fortnight, however, was once again weaker versus the dollar.

Meanwhile, a heavy week of economic news on these shores did not get off to a great start. Specifically, the Conference Board reported that confidence dropped in May, falling to a reading of 64.9 for the month. The May figure was well below the 68.7 survey result for April and the consensus expectation of 70.0. Later on this week, we will get the latest revision to first-quarter GDP, a report on manufacturing activity, and the much-anticipated data on employment and unemployment.

Sector-wise, leadership was shown by capital goods, basic materials, energy, and technology groups. Within the technology space, the shares of industry giants Apple (AAPL), Microsoft (MSFT - Free Microsoft Stock Report), Google (GOOG), and Intel (INTC) were all higher. Conversely, the defensive-minded sectors, including utilities and healthcare, only recorded modest gains.

There were some signs that investors were willing to take on a little more risk today. Demand for small- cap stocks—the Russell 2000 outperformed its larger-cap brethren in terms of percentage gains—would suggest such. Still, despite this positive equity market data, our sense is that many investors remain rather hesitant about going all in on equities, especially with the drama in the euro zone still very much on their minds. In addition to equities, investors are still showing a desire for fixed-income holdings. In fact, the yield on the 10-year Treasury note, which moves in the opposite direction to the price, fell slightly today, ending the session at 1.73%, a sign that investors have not yet abandoned fully their desire for the better-assured returns of the bond markets. – William G. Ferguson

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


12:20 PM ET - The U.S. stock market is rallying today, although the idexes are now well off of their earlier highs. Hopefully, the move can sustain itself through the session. Continued buying through the day would be a sign of commitment on the part of the bulls. We will also be watching the day’s volume, as a decent showing here would be a further sign of conviction. Technically, the S&P 500 Index had been consolidating after the large up day logged a few sessions ago. Today could well represent some material follow through on that move, and hopefully dispel some of the fear that stocks are headed for a bear market.

At roughly noon in New York, the Dow Jones Industrial Average is up 92 points (0.7%); the S&P 500 Index is ahead by nine points (0.7%); and the NASDAQ is up 17 points (0.6%). Market breadth suggests broad-based support for stocks. Advancing issues are ahead of decliners by about 3 to 1 on the NYSE, with a decent showing on the NASDAQ, as well. Most of the major market sectors are making contributions. There is leadership in the basic materials, energy, and capital goods stocks. Strength here makes sense, as these sectors have largely led the market higher in the current bull market. In contrast, relative weakness can be found in the utility and healthcare shares.

Traders on our shores may be getting some help from the overseas markets. In Asia, the markets rallied last night on the idea that China will continue to encourage expansion. In Europe, the bourses are finishing up a decent session. Recent meetings seem to have calmed fears that Greece would exit the euro zone. 

Meanwhile, traders are looking past a weak economic report today. The Conference Board’s Consumer Confidence Index registered a reading of 64.9 for May, which was well below the 70.0 figure that many had been expecting. The remainder of the week will be busy, culminating in the May Non-farm payroll report on Friday.

There have been only a few small corporate news items released today. Shares of Chesapeake Energy (CHK) are trading higher on reports that Carl Icahn has built a large stake in the company. Shares of Vertex (VRTX) are off sharply on drug-related news. LeCroy (LCRY) stock is soaring on a merger announcement. Meanwhile, Facebook (FB) is lower, having fallen below the $30 mark. - Adam Rosner

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

11:00 AM ET - The bulls are out in force today, and encouragingly, this push to higher ground comes in the face of disquietingnews from abroad and at home. So, in effect, Wall Street seems to be climbing the proverbial wall of worry this morning.

Specifically, U.S. stocks are surging, even as Spain has indicated that it will need to pump billions into its troubled lender, Bankia SA. At the same time, there was an economic release earlier this morning on our shores, which showed an unexpected sharp drop in consumer confidence. Here, the Consumer Confidence report registered a reading of 64.9 for May. That was down from April's 68.7 and from an expected survey result of 70.0.

These news items notwithstanding, as we reach the 90-minute mark to the trading day, we find that the Dow Jones Industrial Average is now up 150 points; the Standard and Poor's 500 Index is ahead by 16 points; and the tech-heavy NASDAQ is better by 39 points. All three of these closely watched indexes are near their highs for the session, moreover. Also, gainers easily top losers on both the Big Board and the NASDAQ, while the small and mid-cap indexes, specifically the Russell 2000 and the S&P Mid-Cap 400, are racing ahead to the tune of 12 and 13 points, respectively. It is a clear rout of the bears so far.

Helping the market today, we sense, is that there is some optimism about upcoming economic reports due out this week, notably on non-farm payrolls and manufacturing activity--both of which are set for release on Friday. Also, there is optimism that China will be adding some stimulus to its economy in hopes of avoiding a slowdown in the months to come. Whatever the reasons, equities are racing ahead, to the satisfaction of the bulls, and the Dow has climbed back above 12,600.   - Harvey S. Katz

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– With earnings season winding down, corporate boards have started to turn their attention to other matters. A case in point is that discount retailer Dollar Tree (DLTR) announced that its Board of Directors has approved a 2-for-1 stock split in the form of a common share dividend. The number of DLTR shares outstanding will jump to 232 million.

In acquisition news, transportation and logistics specialist FedEx (FDX) has agreed to purchase rival cargo hauler Rapidao Cometa of Brazil. Financial terms were not disclosed. – Sharif Abdou

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


Before The Bell 

Wall Street will begin a new trading week in about a half hour from now after what we hope was a safe and happy Memorial Day Weekend for our many readers. And judging by the current action in the equity futures, it should be an upbeat opening if you are long equities. That is because in spite of rising bond yields in Spain, we are seeing solid improvement in the Standard and Poor's 500 Index futures (up nine points) and in the NASDAQ futures (up 17 points).

This likely higher opening follows a generally stronger showing by the bulls in the prior five-day stretch. Helping stocks last week was a succession of positive economic reports at home, with the better data ranging from improvement in sales of existing homes and newer residences, to better news on jobless claims and durable goods orders, to a more solid reading than expected in a University of Michigan consumer sentiment survey.

Now, as noted, a new week dawns, and with even more dire news out of Spain, as that nation pours billions of additional dollars into its troubled lender Bankia SA, fears of a Greece contagion grows by the day. Meanwhile, there is some good news from the overseas markets this morning, as many bourses around the world are moving higher, with even some selective improvement taking hold in parts of Europe, notable in Germany's DAX, which is sprinting ahead at this time. As for the better news overseas, there are hopes at this time that China, facing the prospect of slower economic growth, may be ready to unleash more spending measures. Also, there are some election polls in Greece that suggest the conservative parties may be receiving some more support as new elections near.

Now, at home, we will be getting data later this morning on consumer confidence for May from the U.S. Conference Board. That survey is expected to show a slight firming in such sentiment. Then, on Thursday, we are due to get reports on both new weekly jobless claims and revised first-quarter GDP. A month ago, the initial opening-quarter GDP estimate had been an increase of 2.2%. Now, expectations are that the rate of growth was only 1.9%. Then, on Friday, the government will issue its monthly reading on May payrolls. An increase of 150,000 jobs is the forecast there. The jobless rate, also reported at that time, is expected to have stayed unchanged at 8.1%. Also, that day, the government is due to report on personal income and spending. Modest gains are forecast in that dual survey. Finally, the Institute for Supply Management is due to report on manufacturing activity across the country. A modest easing in growth is the expectation there for the month of May.

So, there is plenty for investors to focus on over the next four days. How well we do at home and the further goings on in Europe and perhaps in China will have plenty to say about how our markets perform over here. The bulls and the bears are in a standoff, with one side winning one day and the other the next. We have, for the most part, managed to withstand a full-scale assault on the bull market, and stocks seem reasonably valued at this juncture, based on relatively favorable earning trends. However, the bulls will need some support to keep things from breaking down over time. We will see if they can get this assistance in the days and weeks ahead. – Harvey S. Katz

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