After the Close - The U.S. stock market opened lower, spent much of the session paring its losses, but ultimately, ended on a weak note. At the close of the session, the Dow Jones Industrial Average ended down 47 points (-0.4%); the S&P 500 Index was off six points (-0.4%); but, the NASDAQ, which was the better performer, closed virtually unchanged. The tone was largely negative, as declining issues were slightly ahead of advancers on the NYSE. Considerable weakness was found in the energy, financial, and consumer non-cyclical names. On the other hand, there was some relative strength in the capital goods and consumer cyclical stocks.

Technically, the market has been looking to add to its recent gains, lately, but took a pause today. Trading volumes have been light for the past few sessions, probably due to the shortened holiday week. The S&P 500 Index may run into some resistance at the 1,370 mark, which was an area of congestion earlier.

The markets on the Continent put in a mixed session today. Britain’s FTSE-100 ended in positive territory, but there were considerable losses on France’s CAC 40. The ECB lowered its interest rates, in an effort to provide liquidity in the region. However, the market’s reaction to the move was less than enthusiastic. This may have had to do with some remarks by bank officials accompanying the rate decision. The Bank of England also announced that it will be expanding its asset purchase program, which is also a stimulus measure.

Meanwhile, the economic news released in the United States was mixed today. The ADP Employment Change Report showed 176,000 jobs being added in the private sector in June, which was better than both the consensus view and the May figure. Further on the employment front, initial jobless claims for the week ended June 30th came in at 374,000, which was a lower number than many had anticipated. Conversely, we saw a somewhat slower growth rate in non-manufacturing on the ISM Services Index. Now, traders will be looking to the Government’s Employment report for month of June.

In corporate news, retailers were in the spotlight today, as many of the big names posted monthly same-store sales figures. As a result shares in the retail sector were active today. Notably, Kohl’s (KOHL) had a good session. Elsewhere, large upside moves were seen in Netflix (NFLX) and Arena Pharmaceuticals (ARNA). In contrast, there were some declines apparent in JPMorgan Chase (JPM - Free JPMorgan Stock Report), Cato Corp. (CATO), and Goodrich Petroleum (GDP).  - Adam Rosner 

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 stock market is off its session-lows as traders get back into the groove following the midweek July 4th holiday. Just after noontime on the East Coast, the Dow Jones Industrial Average was off 19 points, but the NASDAQ was up slightly. The Dow at one point had been off over 90 points. Decliners lead advancers by a narrow eight-to-seven margin on the New York Stock Exchange.

The session began with a trifecta of monetary policy stimulus measures on the part of the Bank of England, the European Central Bank (ECB), and the Peoples Bank of China as backdrop. Those moves did little to spark buying interest, though, with stock markets in Asia closing mixed and with most of the European bourses trading lower. The concern is that central bankers are seeing slowing global growth as an ongoing problem. The euro fell against the dollar as interest-rate support eroded with the ECB’s move.

Back home, the economic data pointed in different directions. On the job front, the news was upbeat, with weekly initial jobless claims coming in less than expected, and at a level that suggested modest gains in employment. A report from Automatic Data Processing (ADP) also showed a better-than-expected 176,000 private sector jobs were added in June.

Data from the Institute of Supply Management showing that its non-manufacturing index did not advance as much as expected was less uplifting, though. The silver lining is that the figure still pointed toward expansion, rather than contraction, with growth in the employment component being encouraging.
But disappointing June sales on the part of several major retailers is keeping spirits in check, too. Discounters Costco Wholesale (COST) and Target (TGT), as well as Macy’s (M) and teen specialist Buckle (BKE) came up short of expectations, owing to lackluster demand by shoppers. Bucking the trend were high-end retailer Nordstrom (JWN), TJX (TJX), and Limited Brands (LTD).

At the sector level, shares of energy and financial companies are trailing the pack. Energy stocks, including ConocoPhillips (COP) and Halliburton (HAL) are being hurt by dimmer prospects for global economic growth. Meanwhile, banking stocks, such as Citigroup (C) are being looked at in a dimmer light after the fallout with the LIBOR rate-fixing revelations.

This afternoon’s trading should be relatively calm ahead of Friday’s big employment report. Prospects for a positive surprise from tomorrow’s important nonfarm payrolls number, given today’s better-than expected ADP report and initial weekly jobless claims, should keep a floor under market activity.   - Robert Mitkowski    

At the time this article was written, the author did not have positions in any of the companies mentioned. 

Stocks to Watch from The Survey Traders returning to work from the July 4th holiday will likely be eyeing the stocks of retailers today, as a host of companies are scheduled to report comparable-store sales for the month of June. At first blush, results appear to have been largely lackluster. Retailers of all stripes failed to live up to investors’ expectations, including department store Macy’s (M), general retailer Target (TGT), warehouse club Costco Wholesale (COST), and teen-apparel shops Wet Seal (WTSLA) and The Buckle (BKE). Persistently high unemployment, waning consumer confidence, and a volatile stock market seemed to weigh on shoppers. However, a few companies, such as apparel retailers The Gap (GPS) and Limited Brands (LTD), delivered better-than-expected 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 bull seems to be back--at least the action over the past few trading sessions would appear to suggest that. Indeed, following an outsized stock market gain last Friday on hopes that the European Union was finally serious about getting its weakened house in order, the U.S. stock market inched higher--save for the Dow Jones Industrial Average--on Monday. Our market then posted a very strong pre-holiday shortened session on Tuesday, with the Dow gaining another 72 points and the NASDAQ chipping in with better than a 20-point gain--in just the three-and-a-half hours of trading.

All told, the Dow is now up close to 13,000, while the NASDAQ is within two dozen points of 3,000. What is really impressive about the recent performance is the fact that it is coming in the face of disquieting economic news on the home front, where, on Monday, the Institute for Supply Management (ISM) chimed in with data showing the first decline in its closely tracked monthly manufacturing survey since July of 2009. Now, later on this morning, that same Arizona-based trade group will issue its keenly anticipated survey on non-manufacturing activity. Here, by comparison, a further expansion is forecast to have occurred in June, albeit a slightly lesser one than in May.

Then, tomorrow, the U.S. government will issue its monthly reading on employment and unemployment. For this report, the guessing is that 100,000 jobs were created in June--up modestly from the 69,000 new positions that were estimated to have been added in May. The jobless rate, meantime, is expected to have remained unchanged at a distressingly high 8.2%.

Encouragingly, though, ahead of that report, the Automatic Data Processing Corporation (ADP) has just within the past half hour, or so, reported that in its survey of private sector jobs, it found that 176,000 positions were added in June. Expectations had been that this survey would have seen just 105,000 jobs created last month. That news then caused optimism to leap forward, and the U.S. equity futures, which had been slightly lower before that report, jumped up nicely in the minutes subsequent to that metric's release. However, since then, pessimism has returned, and the market is now indicated to open somewhat lower when trading begins in less than an hour from now.

As to other news, there has been some relief that the European Central Bank, as expected, has cut its key interest rate by a quarter of a percentage point to a record low of 0.75 percent. The move followed a similar-sized rate reduction by China's central bank and new stimulus measures by the Bank of England. The ECB rate cut could mean lower borrowing costs for banks, and is a further piece of evidence that the euro-zone nations are finally serious about working together to help out a difficult situation on the Continent.

Overall, things are, as noted, have been looking up for those who are long the U.S. stock market. We caution, though, that tomorrow's key employment report could be a game changer. In the past, there has not always been a notable correlation between the ADP survey and the U.S. employment report. Should the U.S. survey come in near the ADP number, the markets could continue their winning ways. A much less hopeful report, however, or a dour ISM reading on non-manufacturing later this morning, could bring in the bears--as we have seen in the past few minutes. – Harvey S. Katz

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