After The Close - Sometimes a few words of encouragement go a long way. Today was one of those days on Wall Street, when European Central Bank President Mario Draghi affirmed his commitment to maintaining the euro zone. That swept away, at least for today’s trading session, the worries that were becoming ever-more deeply engrained in investors about the fate of the European Union. There were enough positives in the economic data released this morning to support the rally, as well.

At the close, the Dow Jones Industrial Average was up 212 points, and the NASDAQ had gained 39 points. Market breadth was broadly bullish, with advancers outpacing decliners by better than a two-to-one margin on the New York Stock Exchange. All ten stock market sectors were nicely in the plus column.

Upon closer inspection, the ECB President’s backing of the euro as a currency simply confirms the ambition that political and financial leaders in Europe have had since the euro was initiated more than 13 years ago. The vision is for the numerous countries in Europe to be able to compete on more equal footing with the world’s other leading economies.

Of course, sticking to that goal has become much more difficult with the sovereign-debt crisis in Europe leading to a global business slowdown. When push has come to shove, though, the feeling of a need to keep the euro zone intact has had grassroots support, as evidenced by the results of election of a euro-leaning government in Greece earlier this year. Overall, ECB President Draghi’s vow to see the euro through these tough times provided some reassurance, although the road ahead will undoubtedly be rocky and long drawn out. Meanwhile, over here...  

Tomorrow brings a fresh round of earnings reports to digest from the likes of Chevron (CVX - Free Chevron Stock Report), Merck (MRK - Free Merck Stock Report), Newmont Mining (NEM), and Weyerhaeuser (WY). Profits have been a mixed bag this earnings season, owing to the euro-zone-based economic slowdown, and more unevenness is likely on that front.

More telling for Friday’s stock market could be the release of a report on second-quarter GDP in the United States. Not much is expected, with a reading of around 1.2% likely. Anything slower than that would put extra pressure on the Federal Reserve to initiate some sort of monetary stimulus when it meets next week. The University of Michigan’s consumer index is also due out, and no big number looks to be on tap there, either. Unless the data surprise materially to the upside, it will be tough to duplicate today’s strong gains. - Robert Mitkowski    

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

12:30 PM ET - The U.S. stock market opened higher this morning, and has been able to hold most of the gains, so far. At just past noon in New York, the Dow Jones Industrial Average is ahead 167 points (1.3%); the S&P 500 Index is up 16 points (1.20%); and the NASDAQ is adding on 27 points (1.0%). The market’s breadth shows widespread buying of equities, as advancing issues are ahead of decliners by over 2 to 1 on the NYSE. All the market sectors are participating in the up move, with notable leadership in the consumer non-cyclical names. The conglomerates and transports are also up sharply.  There is no group that is showing any real weakness.

Technically, today’s move is encouraging, and suggests that there is still support for equities. Ultimately, we will have to wait until the close of the session to see if the current buying campaign continues through the day, which would indicate that traders are committed to the rally- at least for now.

Overseas, the markets are closing out a strong session, as well, and that is likely giving our markets a boost. France’s CAC 40 ended up about 4%, with similar gains on Germany’s DAX, and on Britain’s FTSE 100. Comments from the ECB President vowing to do whatever is necessary to protect the euro zone were likely the cause for the rally. Notably, the euro, which has fallen sharply over the past several months, was rising today, as well. Further, the yields on Spain’s debt has started to retreat, suggesting investors feel a bit better about the situation, for now.

The economic news in the United States was generally positive today. According to the Department of Labor, initial jobless claims for the week ended July 21st came in at 353,000, which was a much better reading than was widely expected. Also, according to the Department of Commerce, durable goods orders increased 1.6% for the month of June, which was above the consensus view. However, it should be noted that essentially all of the increase was due to transportation orders. In a less favorable release, pending home sales for June slipped 1.4%, where analysts had been looking for a small improvement.

Meanwhile, the corporate earnings reports keep coming in. Today, we head from Exxon Mobil (XOM Free Exxon Stock Report). The oil giant posted somewhat lackluster results, and that stock is up just slightly. Also, 3M (MMM Free 3M Stock Report) is seeing its stock rise on a decent release.  In technology, Akamai Technology (AKAM) stock is rising, after the company put in a good profit showing and issued an upbeat outlook.   – Adam Rosner

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


10:15 AM ET -  It is all coming up roses for Wall Street this morning, as the U.S. stock market is surging in the early going today, rising on a fairly decent report on durable goods orders, a surprisingly sharp drop in first-time weekly jobless claims, and, most of all, on calming words from the European Central Bank President Mario Draghi.

Specifically, the Commerce Department earlier this morning issued mildly reassuring data on orders for durable goods in June, with that key sector's demand showing an overall increase of 1.6% last month. That was more than twice the forecast increase for the month of 0.6%, and followed an upwardly revised increase of 1.6% in May.

More important, given the highly critical nature of the employment market, the Labor Department reported that first-time jobless claims had fallen sharply in the latest seven-day period to 353,000. A week ago, that metric had stood at 388,000. Claims are now down to a level that could well spark a greater increase in new job creation than we have seen in recent months.

Most of all, the markets are soaring on words from ECB President Martio Draghi. Specifically, he intoned that the ECB would do whatever was necessary to protect the euro zone from collapse, including fighting what he termed to be unreasonably high government borrowing costs. Following his comments, global markets surged as did commodity prices worldwide. True, doubters immediately surfaced saying that we have heard these words before, and that little has come of such pronouncements in the past. However, for now, at least, the global markets are clearly betting that this time will somehow prove to be different.

Thus, as we pass the half hour mark of the new trading day, we find that the U.S. markets are surging across the board, with the Dow Jones Industrial Average currently up 245 points, and with respective gains in the Standard and Poor's 500 Index, the NASDAQ, and the Standard and Poor's Mid-Cap 400 Index of 23, 48, and 15 points. Also, gainers are swamping losers on both the Big Board and the NASDAQ, as computer screens are green almost across the board. Now, the task for the bulls will be to keep this welcome momentum in place following a succession of weaker performances over the past week.  - 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 The earnings parade continued after the market closed yesterday, with Zynga (ZNGA) garnering most of the headlines. The stock plunged after the game developer released disappointing second-quarter results and slashed its outlook for the balance of 2012, citing delays in new game releases, among other things. The weak report also pulled down shares of social network provider Facebook (FB), the primary platform for players to use Zynga's games. Facebook is scheduled to release quarterly results after the market closes today. On the bright side, shares of grocer Whole Foods Market (WFM), hard drive manufacturer Western Digital (WDC), and e-commerce outfit Akamai Technologies (AKAM) are all trading sharply higher in the premarket on earnings news.

This morning, investors received earnings reports from three Dow-30 components, diversified manufacturers 3M (MMM - Free 3M Stock Report) and United Technologies (UTX - Free United Technologies Stock Report) and energy giant Exxon Mobil (XOM - Free Exxon Stock Report). Thus far, investors have had a somewhat subdued reaction to the reports. UTX stock is indicating a moderately higher opening, but shares of Exxon and 3M are little changed in the premarket.

A host of other companies have also announced quarterly earnings this morning, such as consumer goods providers Colgate-Palmolive (CL) and Kimberly-Clark (KMB). Both of those stocks are trading modestly higher in the premarket. On the other hand, garbage and recycling concern Waste Management (WM), medical supply company Hill-Rom Holdings (HRC), and Dow Chemical (DOW) are all indicating lower openings this morning.

Finally, in addition to Facebook, online retailer Amazon.com (AMZN) and coffee shop Starbucks (SBUX) are also scheduled to release earnings after the market closes today. – 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 received a timely respite yesterday, as the bears rested following three straight losing sessions for the U.S. stock market. Upbeat earnings and generally positive comments from two Dow components, Boeing (BAFree Boeing Stock Report), the aerospace and defense giant, and Caterpillar (CATFree Caterpillar Stock Report), the earthmoving behemoth, managed to overcome a less-than-stellar earnings result and revenue picture by iconic computer maker Apple (AAPL) and a downbeat forecast from Netflix (NFLX).

The gains from Boeing and Caterpillar, meantime, helped the Dow Jones Industrial Average to a gain of 59 points. However, the aggregate market was little better than mixed on the day, as the Standard & Poor's 500 Index marched in place and the tech-heavy NASDAQ, hampered by the notable losses in Apple and Netflix shares, lost nearly nine points on the day. Further underscoring the unprepossessing character of the day was the fact that advancers beat out decliners on the Big Board by an eight-to-seven margin. Still, following losses of at least a hundred points a day in the Dow last Friday, and on Monday and Tuesday of this week, yesterday's mildly positive day was truly welcomed by those who are long equities.

Now, this morning, there is some additional good news, but it is not necessarily coming from our markets, or from earnings on these shores. Rather, it is emanating from the euro zone, where Europe's central bank chief, Mario Draghi, earlier today said that the bank would do all it can to protect the floundering euro zone from collapse. Already, there is, by some accounts, overwhelming sentiment in place that beleaguered Greece will be exiting that loose federation by 2013. Those comments helped to turn around the European bourses, which are now higher, and it is doing wonders for our futures, which are showing sterling gains in the Standard & Poor's 500 Index (in the plus column by some 18 points), in the Dow (up by better than 150 points), and in the NASDAQ (ahead by more than 35 points), with less than an hour to go before the start of the new trading day in New York.

Then, there is the Federal Reserve, which is holding its upcoming FOMC meeting next Tuesday, and which is expected to then unveil some new monetary stimulus efforts, perhaps putting into place a third installment of its quantitative easing program, a QE3, if you will. Expectations on that score have helped the markets to avoid an even sharper setback over the past week, a stretch that has seen some less-than-perfect earnings results. Overall, second-quarter reporting season has been unspectacular. Although many U.S. corporations have been beating expectations, the degree of that outperformance appears to have been less than in earlier quarters. What's more, many of those expectations had been lowered over the past few weeks.

Going forward, in the very near term, then, we would expect the markets to be watching the Fed. The good news out of Europe is clearly uplifting in the immediate term. Still, there is no assurance as yet for skittish investors over here that the Fed will act and if it does that the central bank's presumptive moves will be enough to light a badly needed fire under our weakening economy. – Harvey S. Katz

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