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After the Close -  The U.S. stock market put in a weak session today. The averages lost considerable ground in the late morning and early afternoon, before paring their losses toward the end of the session. Although unable to reverse the situation completely, it was still good to see some bargain hunting. At the close of the day, the Dow Jones Industrial Average was off 92 points (-0.7%); the S&P 500 Index was down 10 points (-0.7%); and the NASDAQ, which actually held up a bit better, was lower by 10 points (-0.4%). Market breadth was generally unfavorable, as declining stocks outnumbered advancing issues by just about 2 to 1 on the NYSE. Essentially all of the market sectors ended in negative territory, and that was certainly not encouraging. There were severe losses in the energy, financial, and utility stocks. In contrast, there was some relative strength apparent in the transportation names.

Technically, the S&P 500 Index is pulling back, in keeping with the choppy trading that has dominated the market for the past few months. Hopefully, if the S&P 500 moves lower, it will find some support near its 50-day moving average, located at roughly 1,340, which is just about 2% lower than the current level of 1,365.

Ultimately, traders were not too enthusiastic about the international news today. After some encouraging comments from the ECB President several days ago, traders may have been expecting an aggressive package to be announced. While the ECB left interest rates unchanged, concrete measures to stimulate the economy in Europe, and shore up finances there, were not as forthcoming as had been hoped. The news also followed yesterday’s announcement from the Fed. Many had looked for some stimulative action there, as well, but were disappointed.
The economic news on our shores did little to help the situation. We started out with a report on the employment situation. Initial jobless claims for the week ended July 28th came in at 365,000, as expected, but up slightly from the prior week’s reading.  In the broader economy, factory orders for the month of June slipped 0.5%, where analysts had been looking for an uptick. Meanwhile, tomorrow we get a look at government’s employment report for July. Given the lackluster reading on jobs today, traders may have opted to stay out of the market, as well.

The corporate reports are still coming in as we work our way through the second-quarter earnings season. Shares of General Motors (GM) were trading lower, after the automaker reported results, noting problems in Europe. In retail, Abercrombie & Fitch (ANF) saw its stock sink after the apparel maker lowered its guidance. Things went better for The GAP (GPS), though, that stock was rising on decent sales and 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. 

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2:30 PM ET - Europe remains front and center on the minds of global investors--especially on our shores. Specifically, after the European Central Bank President Mario Draghi had pledged late last week to do "whatever its takes" to keep the troubled European Union and its ailing currency, the euro, intact, the U.S. and global markets rallied strongly, with a two-day gain of approximately 400 points in the Dow Jones Industrial Average alone.

Now, we are seeing the other side of the coin. To wit, yesterday's disappointment that the Federal Reserve did not do more to ensure that the domestic economy would resume a stronger growth path had caused just a muted reaction in our markets. Now, though, the bears have gotten back into the driver's seat in a much bigger way today.

Indeed, after a trio of half-hearted setbacks for the market earlier this week, equities are really skidding today, with the Dow now off by 160 points. The immediate precipitation was the fact that the ECB President disappointed investors hoping for immediate steps to contain the euro-zone debt crisis. 

What set off the fresh concerns was an indication by Mr. Draghi that any ECB intervention would start no earlier than September. In addition, there are some fresh earnings and forecast disappointments being issued over here and some natural uneasiness ahead of tomorrow's scheduled twin reports on employment and unemployment. 

So, as we enter the final 90 minutes of the trading day, the market is on course for its fourth losing session in a row, with the Dow now off by 160 points, and even steeper proportionate losses being suffered by the smaller-cap indexes. As to advancers and decliners, they show an unfavorable edge of better than two-to-one for declining issues on the Big Board and a three-to-two ratio on the NASDAQ. It is not very pretty, as we sense that few traders want to be long going into tomorrow's key employment reports by the government.   - Harvey S. Katz 

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

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12:00 PM ET - Stocks are off sharply today as investors are disappointed that European Central Bank President Mario Draghi failed to announce tangible steps to address the region’s debt crisis. Wall Street was cheered one week ago when the ECB chief vowed to defend the euro zone financially. Many had thought those words would be followed up by the purchase of bonds offered by Spain or Italy. Aggressive actions on the part of the ECB are not materializing right away, though.

For the moment, too, the feeling that the Federal Reserve is getting ready to initiate another round of monetary stimulus has moved to the background. There are rising expectations that Fed Chairman Ben Bernanke will make an announcement detailing new policy at the central bank’s annual retreat at Jackson Hole, Wyoming at the end of the month. But the four weeks from now until then might seem like an eternity for stock traders, especially if the economic data come in weak, like today’s figures on factory orders.

Against that backdrop, the Dow Jones Industrial Average is off 134 points just after noontime on the East Coast. The Dow had earlier pared its losses, but is now back near the lows of the day. Meanwhile, the NASDAQ is off 16 points, but not nearly as much as the Dow on a percentage basis. Decliners are outpacing advancers by a two-to-one margin on the New York Stock Exchange.

Among sectors, utilities are having a rough day. The group is seeing some profit taking this week after a nice run from the beginning of May, when the market turned defensive. Financial stocks are also struggling on renewed concerns about Europe and as a result of Knight Capital’s (KCG) trading problems. Insurer MetLife (MET) is bucking the trend, though, after having produced better-than-expected profits.

It will be tough, but not impossible, for the bulls to regroup this afternoon. Tomorrow brings the month’s big employment report, and trading is often subdued ahead of that release. But there are a couple of factors that suggest cautious optimism regarding the employment report is in order. Yesterday’s Automatic Data Processing (ADP) job report was more impressive than expected. Moreover, the latest report from outplacement consultancy Challenger, Gray, & Christmas indicated that layoffs in July were down 2% from June, to the lowest level the year, and down 45% from the prior year. Still, after a few unimpressive payroll reports, investors now appear to be in a show-me state of mind.    - Robert Mitkowski
    

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

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Stocks to Watch from The Survey Investors will have plenty to keep them busy today, as the earnings parade continues and retailers jump in the spotlight with comparable-store sales figures for the month of July. Two of the nation’s most prominent teen apparel retailers delivered starkly different reports. Abercrombie & Fitch (ANF) stock is trading sharply lower this morning, after the company released disappointing July comps and issued forward looking guidance that fell short of investors’ expectations. On the other hand, American Eagle Outfitters (AEO), which generally sells at lower price points than Abercrombie and does not typically report monthly sales, increased its July-quarter earnings guidance due to higher-than-expected sales during the interim. AEO stock is trading moderately higher in the premarket. The Gap (GPS) also delivered good numbers and is poised for a higher opening this morning.

Turning to earnings, investors appeared particularly pleased with quarterly results from coffee roaster and distributor Green Mountain (GMCR) and renewable energy company First Solar (FSLR). However, the stocks of automaker General Motors (GM), cereal and packaged food giant Kellog (K), and oil and gas producer Apache (APA) are all lower in pre-market trading.

In other news, yesterday’s plunge in the stock price of market maker Knight Capital Group (KCG) appears set to accelerate today, as the company said that its losses from Wednesday’s trading glitches would reach roughly $440 million. The stock is freefalling in pre-market activity. – Matthew E. Spencer

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

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Before The Bell - Expectations were high on Wall Street yesterday that the Federal Reserve would decide to introduce a third round of quantitative easing, or QE3, if you will, as the economy has been decelerating and worries abound that the travail in Europe will spread here, perhaps even stopping the fragile U.S. business expansion in its tracks.

However, when the Fed concluded its two-day FOMC meeting just after 2PM (EDT) yesterday, it issued a statement saying that it was just maintaining current interest-rate levels and only continuing the present program of bond swapping in place through yearend, as scheduled. It did not opt for a QE3, saying only that it would watch the economic situation closely and was prepared to act if the now-slowing economic recovery would falter further in the months to come.

If the bears were cheered by this status quo and if they had expected such a move would invite heavily selling in the markets, they were sadly disappointed. True, a modest gain in the leading averages going into the Fed statement quickly reversed and in just a few minutes became a 55-point loss in the Dow Jones Industrial Average. However, calmer heads soon prevailed, and in a matter of a half hour, or so, stability again reigned and stocks headed back to a largely neutral reading in the major averages, before some last-minute selling put the market back modestly on its heels.

In all, by the close, the aforementioned Dow was off 37 points; the Standard and Poor's 500 Index was down by four points; and the tech-heavy NASDAQ was lower by 19 points. The small- and mid-cap indexes did somewhat worse, proportionately, with the S&P Mid-Cap 400 Index off nine points, or nearly one percent, and the small-cap Russell 2000 Composite in the red by 16 points, or 2.0%.

Nevertheless, the bears could not have been pleased by this turn of events. In fact, even the lone economic report of note that was issued yesterday, the ISM manufacturing survey for July, which showed a second month in a row of contracting industrial activity, could not dent the market's resilient armor.

The main explanation for the matter-of-fact performance on Wall Street may have been the ongoing expectation that the Fed will do something--possibly later in the year--and that such action, along with the further passage of time and some apparent resolve to address the current economic woes in the euro zone, will keep our up cycle alive. If that is the case, the bull market may have further to run, as we sense it does.

Finally, the Fed's non-action may have been overshadowed by the irregular trading activity resulting from an electronic trading glitch in nearly 150 stocks early in the day. That glitch sparked confusion among traders, likely further damaging already falling confidence in the basic machinery of the financial markets. But even this mishap could not dent the market's even-keel approach yesterday.

In conclusion, the markets are mixed across the board as hopes rise and fall on expectations that the European Central Bank will further support the euro and the euro zone as the EU President starts his address on economic policy this morning. Over here, meantime, our futures had been rallying strongly earlier, but now have moved lower with the S&P 500 Index futures off eight points and the NASDAQ futures down by almost 13 point, presaging a weaker start when the trading day commences in about a half hour from now. – Harvey S. Katz

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