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After the Close - The U.S. stock market put in a weak session today, as traders digested some mixed economic news.  According to the Department of Commerce, retail sales declined 0.5% during the month of June, which was a weaker reading than the slight increase in sales that many analysts had expected. The shortfall was apparent in numerous categories, as well. Notably, retail sales had slipped in April and May, and clearly the most-recent reading showed no improvement. However, not all the news was negative. The Empire State Manufacturing Survey, which measures economic health in the New York region, provided a reading of 7.4 in July, which was better than anticipated.  Tomorrow, we get a look at the June Consumer Price Index, as well as June industrial production and factory usage figures. 

Meanwhile, earnings season is gradually heating up. We heard from struggling bank Citigroup (C) today. Generally, analysts were pleased with the report, as that stock traded higher. A few big names are slated to post results tomorrow, including some Dow components. So, clearly earnings reports will be playing a large role. There has been some further merger and acquisition-related news, particularly in the medical area. Shares of Par Pharmaceutical (PRX) were up sharply, as that company has agreed to be taken private. Also, Human Genome Sciences' (HGSI) stock was trading higher on news that it will be purchased by GlaxoSmithKline (GSK). Ultimately, acquisitions suggest that some companies are thriving, and that there are some stocks trading at attractive valuations.

At the close of the day, the Dow Jones Industrial Average was down 50 points (-0.4%); the S&P 500 Index was off three points (-0.2%); and the NASDAQ ended lower by 12 points (-0.4%). Declining issues were modestly ahead of advancers on the NYSE. Most of the market sectors lost ground today, with weakness in the capital goods and consumer names. There was some strength in the financials and energy issues.

Technically, the S&P 500 Index has been volatile lately. Today’s move lower was not unexpected given a strong session on Friday. That move put the Index back above its 50-day moving average at 1,332. Notably, the S&P 500 has been able to drift higher, over the past month, and that is a good sign. However, the market has been choppy, and with earnings soon coming out en masse that probably will remain the case. - Adam Rosner 

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

 

12:15 PM ET - U.S. markets opened on the downside this morning, as Friday’s rally was temporarily derailed by a somewhat weak report on retail sales. Specifically, the June numbers from the Commerce Department indicated a decline of 0.5%, versus consensus for growth of around 0.2%. Moreover, this marked the third consecutive month of contraction, and the first such streak since late 2008. Consumer spending is a particularly closely watched figure, as it has historically accounted for around two-thirds of GDP.

Also announced today was that the International Monetary Fund had trimmed its global economic growth forecast for 2013, underscoring continued concerns over developments in the euro zone.

These latest news items apparently have only added to the pile of economic worries mounting in recent weeks, including weaker jobs creation and a contracting manufacturing sector in the U.S. Meanwhile, there’s a growing view that second-quarter earnings season may be less than stellar. One indication that this might be the case is that negative profit warnings have outnumbered positive guidance at a ratio of more than three-to-one, a ratio not seen in several years. As such, investors will be giving careful attention to corporate outlooks for the second half of the year, as the current reporting season rolls out.

At the noon hour, the Dow Jones Industrial Average, S&P 500, and NASDAQ had regained enough lost ground to all be trading within a quarter percentage of the breakeven mark. Much the same could be said for European trading, as, after a late afternoon dip into negative territory, all the major bourses had recovered to right around the flat line.   - Mario Ferro

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

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Stocks to Watch from The Survey This morning, investors received another earnings report from one of the nation’s largest banks. Citigroup (C) delivered better-than-expected earnings, though revenues fell short of expectations. Investors, however, were generally pleased with the news, and the stock is up nicely in pre-market trading. Newspaper publisher Gannett (GCI) also released second-quarter results this morning, and that stock is up marginally in the premarket. Finally, the stock of Human Genome Sciences (HGSI) is up moderately in pre-market trading. The biotechnology company is scheduled to report second-quarter results today, but investors appear more interested in speculation that drug company GlaxoSmithKline (GSK) is close to finalizing a deal to buy it after a long pursuit. – 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 stock market, off for the first four sessions last week, abruptly reversed course on Friday, and in a burst of buying managed to more than offset the cumulative losses for the week to date. In all, the Dow Jones Industrial Average, emboldened by a better-than-expected earnings performance from JPMorgan Chase (JPM - Free JPMorgan Stock Report), soared by 204 points, with that composite of 30 mostly blue chip stocks climbing to 12,777 in the process. The Standard and Poor's 500 Index gained 22 points and the NASDAQ was better by 42 points.

This impressive start to second-quarter earnings season, though, should not be taken as a green light for the remainder of this three-to-four week affair. It is not that we are pessimists by nature. It is just that in addition to this banking behemoth, we have also seen lackluster reports from Alcoa (AAFree Alcoa Stock Report), Advanced Micro Devices (AMD), and Applied Materials (AMAT). Also, there has been a steady chorus of profit warnings issued recently. This drumbeat, in fact, is the worst it has been since 2008--when we were mired is a severe recession.

Meanwhile, in the days to come, the reporting schedule will be heating up in earnest, with data expected from a number of key household names, including investment banking giant Goldman Sachs (GS), semiconductor maker Intel (INTC – Free Intel Stock Report), drugmaker and medical supplies stalwart Johnson & Johnson (JNJ - Free J&J Stock Report), software star Microsoft (MSFTFree Microsoft Stock Report), tech-mainstay IBM (IBMFree IBM Stock Report), and softdrink giant Coca-Cola (KOFree Coca-Cola Stock Report). In addition, we will be treated to major Congressional testimony by Federal Reserve Chairman Ben S. Bernanke both tomorrow and Wednesday. At that time, he will issue his semiannual monetary policy report to the House and Senate, respectively.

Finally, there is the economy, which will also be front and center this week, with reports due out on consumer prices, industrial production, and factory usage tomorrow, housing starts and building permits on Wednesday, and jobless claims and existing home sales on Thursday.   

Meantime, the Commerce Department has just released its monthly report on retail sales, where it was noted that such activity declined in June, falling by 0.5%. Expectations had been for an increase of 0.2%. In May, activity had decreased as well, falling by 0.2%. Such data bode poorly for GDP growth in the just-concluded three months.

Taking it all in, the markets are in a bit of a holding pattern this morning, with the S&P 500 Index and NASDAQ futures both off modestly in the pre-market, suggesting that when trading does get under way in less than an hour from now, it will do so with a negative bias. From there, it could be an earnings and economics driven week. And it may continue to be a volatile trading pattern, as such. – Harvey S. Katz

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