After the Close -  The equity markets remained in schizophrenic mode Thursday, continuing a pattern of up days following down sessions. As such it’s no real surprise that the VIX, the S&P 500 Volatility Index, has been edging ever higher over the last week or so.

In the wake of yesterday’s selloff, U.S. markets appeared to shrug off this morning’s announcement that unemployment claims for last week edged up slightly. Indeed, it would appear that that bit of news, combined with the Labor Department’s report that consumer prices fell 0.3% in May, actually emboldened traders to get back into the market. Namely, the data suggests that the Fed has more wiggle room to consider additional monetary easing. And that, in turn, would generally be considered favorable for equities.

After a slight nudge upwards early in today’s session, equities generally remained in a steady holding pattern heading into the final hour of trading. A late afternoon surge lifted the Dow 30 Industrials as much as 1.6% above their opening low. However, some last minute profit taking took back some of those gains, and the index closed the day up 156 points, or 1.2%. The chart action for the broader S&P 500 told a similar story, with that index retreating from a peak 1.5% advance to end the session up 14 points (1.1%). Meanwhile, the NASDAQ composite kept to a tighter range, ending the day fairly close to its peak, with a gain of 18 points, or 0.63%.

European markets weren’t quite so lucky, with the FTSE 100 and DAX spending most of their sessions in the red, and each ending down a fraction of a percent. The CAC 40 fared marginally better, managing to eke out a tiny gain at the end of the day.

All in all, it wouldn't be surprising to see little major movement on the global markets Friday. Namely, the one event that seemingly has investors worldwide holding their collective breaths is Sunday’s upcoming elections in Greece, and the uncertain ramifications for that country’s future in the euro zone, and, perhaps, for the euro itself. Taking the big picture view, if the past is prologue, we would expect further monetary easing and additional rolling bailouts worldwide until the global economy rights itself. Until then, market volatility is likely to remain elevated.  -Mario Ferro 

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 pushing higher today, after yesterday’s selloff. At about noon in New York, the Dow Jones Industrial Average is up 106 points (0.9%); the S&P 500 Index is ahead 10 points (0.7%); and the NASDAQ is tacking on 17 points (0.6%). Market breadth shows a positive bias, as advancing issues are ahead of decliners by over 2 to 1 on the NYSE. Strength is distributed throughout the market’s various sectors. There is leadership in the capital goods stocks and conglomerates. Nonetheless, some sluggishness can be found in technology shares. Notably, the Philadelphia Semiconductor Index is just slightly in positive territory.

Technically, the stock market has spent the past few sessions moving sideways with considerable volatility. This may suggest that traders are looking for direction. Volumes have been a bit weak lately too, and that may suggest that there is a lack of commitment, or at least a more tentative attitude. Hopefully, the S&P 500 Index, which pulled back in May, won’t decline lower than the 1,280 level, which roughly marked the low of the current correction.

On the Continent, the major bourses are putting in another mixed session. No doubt, investors are troubled by the situation in Spain. That country's bond yields have been moving higher, with the 10-year note now at the 7% mark. Traders are likely demanding a greater reward for taking on risk. Further credit rating agencies have also been reviewing the situation. Meanwhile, there is uncertainty concerning the upcoming election in Greece but investors appear to be more optimistic today.

Further, traders received mixed news at home today. The employment situation remains weak. Initial jobless claims for the week ended June 9th came in at 386,000, which was higher than the prior week’s reading and also higher than analyst expectations. Elsewhere, the Consumer Price Index declined about 0.3% in May, which met consensus views.

In corporate news, shares of Nokia (NOK) dropped sharply after the telecom giant reported plans to trim 10,000 jobs in an effort to cut costs. The stock is now at roughly $2.30, down from its 52-week high of over $7.00 a share. Elsewhere, Kroger (KR) stock is trading higher after that company issued a strong outlook. In technology, Lattice Semiconductor (LSCC) is seeing its stock sink on a weaker outlook. - 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 Shares of cellphone maker Nokia (NOK) are lower in pre-market trading this morning. The company has announced plans to lay off 10,000 workers globally and close a number of manufacturing plants in an effort to cut costs.

The stock of Quest Software (QSFT) is trading higher in the premarket after the provider of enterprise systems management products received a takeover bid in the amount of $25.50 a share. This most recent offer is superior to the $23.00-a-share deal that the company agreed to with Insight Venture Partners back in March.

Investors appeared pleased with quarterly financial results from Pier 1 Imports (PIR), a retailer of decorative home furnishings, and Kroger (KR), the nation’s largest grocery store operator by sales. Both stocks are trading higher in the premarket. On the other hand, shares of Smithfield Foods (SFD) are down in early morning trading after the world’s largest hog producer and pork processor released weaker-than-expected April-period results. – 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 name of the game on Wall Street these days is volatility. Monday’s outsized losses were followed up by gains on Tuesday, before the markets reversed course once again yesterday. By the closing bell, the Dow Jones Industrial Average, the NASDAQ Composite, and the broader S&P 500 Index were down 77, 24, and nine points, respectively.

In recent sessions, sentiment about the euro zone’s sovereign-debt problems appears to be the driving force behind trading—and it looks like it will be the case again today (more below). Yesterday, continued worries about Greece, Italy, and Spain, three nation’s struggling with escalating debt problems, were compounded by less-than-ideal economic news on the homeland. Specifically, the Department of Commerce reported that retail sales fell in May and also revised an earlier estimate of a gain for April to a loss. We also learned that producer (wholesale) prices for the month of May fell 1.0%, the largest decline in three years. Both reports painted a discouraging picture of current U.S. economic conditions. Meanwhile, just minutes ago data were released showing that unemployment claims for the week ending June 9th came in at 386,000, an increase of 6,000 from the previous week's revised figure of 380,000. We also received another tame report on inflation from the Labor Department, as consumer prices fell 0.3% in May on a seasonally adjusted basis. The tame reading may raise the calls for additional economic stimulus on the part of the central bank in the coming months.

Yesterday, the market was pulled lower by weakness in the technology and energy sectors, two areas that account for a large weighting. Within the tech space, shares of Apple (AAPL), Microsoft (MSFTFree Microsoft Stock Report), Cisco Systems (CSCOFree Cisco Stock Report), and Google (GOOG) were weaker, while the stocks of Exxon Mobil (XOMFree Exxon Mobil Stock Report) and Chevron (CVXFree Chevron Stock Report) were notable laggards among the energy concerns. Not surprising, consumer cyclical stocks were also hit hard following the release of the aforementioned weak retail sales data. Shares of Nike (NKE), Deckers Outdoor (DECK), lululemon Athletica (LULU) were notable decliners in the retailing space.

The new day brings more worries about Europe. This morning, news surfaced that Germany, Europe’s largest economy, refused to underwrite or guarantee bank deposits in the euro zone. The rebuff of the “miracle solutions” plan that is backed by French President Francois Hollande and Italian Prime Minister Mario Monti raises the possibility that the situation could deteriorate further on the Continent. German Chancellor Angela Merkel said the plan violates Germany’s constitution. Meanwhile, Spain is once again in the news, as its 10-year bond yield hit an all-time high earlier today after a major credit rating agency cut its debt rating by three notches. Not surprisingly, the major European bourses are in the red today and the euro is slightly weaker versus the dollar.

The continued worries about the global economy and the sovereign-debt problems in the euro zone—reflected in the sharp rise in the S&P 500 Volatility Index (or VIX) of late—has investors revisiting a “flight-to-safety” strategy on these shores, with U.S. Treasuries in demand. The yield on the benchmark 10-year Treasury note, which moves in the opposite direction to the price, finished the session six basis lower. Given the lingering uncertainty about Europe—especially with the presidential election in Greece still to be decided—we expect safe-haven instruments to remain in high demand.

With less than an hour to go before trading commences on these shores, the futures are pointing to a lower opening for the U.S. equity market. Our sense is that investor sentiment will be a bit bearish, given the turmoil in Europe and the aforementioned jump in initial weekly unemployment claims today. Stay tuned. – William G. Ferguson 

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