After The Close - The bulls were out in full force today, and in the process made it a winning week on Wall Street. Emboldened by a couple of reports on the economy—most notably the latest data on U.S. employment—investors gobbled up equities, with each of the 10 major sectors booking big gains (more below). By the closing bell, the Dow Jones Industrial Average, the NASDAQ, and the broader S&P 500 Index had added 217, 58, and 26 points, respectively. Advancing issues led decliners by a significant margin on both the Big Board and the NASDAQ, to the tune of more than four-to-one on the former. 

As noted, the primary catalysts behind today’s buying spree were a couple of better-than-expected snapshots of the domestic economy. The investment community cheered the latest employment data, which showed that the nation added 163,000 jobs in July, far surpassing the expectation of an advance of some 90,000 positions. Then, shortly after trading commenced, a report from the Institute for Supply Management showing that non-manufacturing activity expanded for the 36th consecutive month in July added to the current bullish sentiment on Wall Street. While there were some disconcerting aspects to the latter report, when taken in combination with the employment picture, investors couldn’t helped but to be a bit more encouraged about the economy than they were a few days ago.

The decent data on these shores provided a nice boost to those sectors most closely tied to the health of the economy. Not surprisingly, the energy, industrial, financial, consumer cyclical, and basic materials sectors provided leadership throughout the session. Most of Dow 30 companies were comfortably in positive territory, with notable gains turned in by the stocks of blue chips Caterpillar (CAT - Free Caterpillar Stock Report), International Business Machines (IBM - Free IBM Stock Report), and United Technologies (UTX - Free United Technologies Stock Report). Shares of Procter & Gamble (PG - Free Procter & Gamble Stock Report) and Kraft Foods (KFT - Free Kraft Stock Report) moved notably higher as well, on the strength of solid quarterly results—Kraft reported after yesterday’s market close. The NASDAQ, meantime, got a nice boost from technology issues. Of note were advances by LinkedIn (LNKD), Cisco Systems (CSCO - Free Cisco Stock Report), Microsoft (MSFT - Free Microsoft Stock Report), Apple (AAPL), and Google (GOOG).

The gains stateside, though, were still not as formidable as those booked on the Continent. When traded concluded on the other side of the Atlantic, Germany’s DAX, France’s CAC-40, and London FTSE-100 were an eye-catching 3.9%, 4.4%, and 2.2%, higher. Those gains retraced yesterday’s losses and then some. European stocks were weaker on Thursday and during the early stages of trading today, as investors reacted disappointingly to the European Central Bank’s decision to not provide any additional stimulus measures, at least right now, for the struggling euro-zone economies. However, their tune changed quickly after the U.S. economic reports surfaced. Leading the charge were the stocks of European banks, which moved higher on the U.S. data and yesterday’s pledge from European Central Bank to tackle the region's debt crisis. In all, European bourses rose to their highest level in four months today.

It was also a very good day for those long commodities. The aforementioned decent U.S. economic data, along with the pullback in the value of the dollar, which makes commodities more attractively priced in overseas markets, pushed most of the categories higher. Oil posted its biggest intraday price gain in more than one month, finishing the session more than 4% higher on the New York Mercantile Exchange. Gold, the other most closely watched commodity, also turned in a good showing, finishing the week above the $1,600-an-ounce mark. 

Looking ahead to next week, the economic news will be very light, which will probably shift the focus of the investment community back to the ongoing earnings season—with the volume of reports due next week still very high, but lacking the heavy hitters, other than Dow-30 component Walt Disney (DIS - Free Disney Stock Report)—and  the ongoing soap opera in the euro zone. Our sense is that good—or at the very least supportive—news on both fronts will be needed to keep the profit takers at bay. At slightly less than 16, the S&P 500 Volatility Index (or VIX) suggests that the market may be a bit overbought at the moment.   - William G. Ferguson

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 opened higher this morning, and has managed to build on these gains. At just past noon in New York, the Dow Jones Industrial Average is up 244 points (1.9%); the S&P 500 Index is higher by 28 points (2.0%); and the NASDAQ, which is once again showing leadership, is adding on 62 points (2.1%). Market breadth shows substantial support for equities, as advancing stocks are ahead of decliners by over 6 to 1 on the NYSE. All of the market sectors are heading higher, with particular strength in the energy, financial, and conglomerate stocks.  While there is no real weakness today, the utilities are advancing a bit less than some of the other sectors.

Technically, with today’s move up, the S&P 500 Index is successfully making progress on the rally that started in June. If the S&P 500 can head higher from here, it might encounter some resistance at the 1,400 mark, an area that also might carry some psychological impact. However, if the Index can move past 1,400, we could well see higher levels later in the year.

Traders received some good news today, meantime, which helps explain the rally. Specifically, according to the Department of Labor, non-farm payrolls rose by 163,000 jobs in July. This figure was well ahead of the consensus view, and better than the downwardly revised 64,000 jobs added in the prior month. Traders were willing to look past the slightly higher, 8.3%, unemployment rate.  We also received adecent figure on The ISM Services Index, which came in at 52.6 in July, slightly ahead of expectations.

The corporate reports are still getting some notice. Today, shares of Kraft Foods (KFT Free Kraft Stock Report) are trading higher, even though the company posted strong profits on a mixed top-line. Proctor & Gamble (PG Free P&G Stock Report) also put out decent profit report, and that issue is moving higher, as well. Meanwhile, Knight Capital (KCG) is rebounding, as that company, which has been in the news lately, may be looking for outside investors.

In Europe, the markets are all set to close sharply higher. The rebound there probably reflects the gains in the U.S. The euro is up sharply today, now at $1.23 against the dollar. In commodities, oil is up too, and is back above the $90-a-barrel mark, which may reflect the suddenly better economic outlook.  - Adam Rosner

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


10:45 AM ET - It is all coming up roses for the bulls this morning, as the U.S. stock market is surging after strong gains across Europe continue today.

Several things are helping the bullish case. For openers, there seems to be some reappraisal of the comments made yesterday by European Central Bank President Mario Draghi. Initially, the verdict had been negative on that score, as no concrete steps to rescue the euro zone had been put forth at that time. However, there may now be some reality creeping in, as many are finally warming to the idea that this troubled situation will not go away anytime soon no matter what is decided upon. There does seem to be a greater conviction emerging on the part of the European Union members that something must be done, though, so there is clear progress being made.

Meanwhile, on our shores, we have received some-back-to-back doses of good news today. First, the Labor Department reported at 8:30 AM (EDT) that the nation created 163,000 new jobs in July, or nearly twice the 90,000 gain forecast. That was, moreover, the first substantial increase in that series since March. Then, 90 minutes later, the Institute for Supply Management reported that its survey on non-manufacturing activity nudged forward to a reading of 52.6 last month, up from 52.1 in June. A survey result of 52.0 had been expected. Thus, the services sector continues to pick up speed incrementally. That gain in activity, meantime, stands in stark contrast to a manufacturing survey issued by that same group on Wednesday, in which such activity had contracted slightly.

As a result of these positive factors, stocks are soaring in the early going. Indeed, as we pass the one-hour mark on Wall Street, we find that the Dow Jones Industrial Average, which had been backtracking all week, is now up by 220 points, while the Standard and Poor's 500 Index is in the black to the tune of 26 points, and the NASDAQ is 60 points better. The small and mid-cap indexes are likewise surging, and advancing issues are beating declining stocks by more than eight to one on the NYSE and by better than five to one on the NASDAQ. Also, up volume is a large multiple of down volume on both exchanges. The bull is thus back--at least for one morning.  - 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 While today’s surprisingly good jobs report is in the spotlight, the drumbeat of earnings news has not relented. Indeed, investors are going over a number of quarterly reports, including two from Dow-30 components. Kraft (KFTFree Kraft Stock Report), the world’s second-largest food company, has reported solid second-quarter earnings, despite rising commodity costs and lingering weakness in Europe. The stock is trading modestly higher in the premarket. Shares of Procter & Gamble (PGFree Procter & Gamble Stock Report) are also climbing in pre-market trading, as investors appeared pleased with June-quarter results from the household products giant. Moreover, the company reiterated its fiscal 2013 (years end in June) earnings guidance, which should be supported by roughly $4 billion in share repurchases. Too, investors cheered a quarterly report from social network operator LinkedIn (LNKD), which delivered strong revenue growth and increased its forward-looking guidance.

It was not all good news on the earnings front, however, and shares of media and entertainment company Viacom (VIAB) and audio technology developer Dolby Labs. (DLB) are both trading notably lower in the premarket. The stock of Zipcar (ZIP) is getting hit even harder today, after the car rental company released second-quarter results and issued a weaker-than-expected outlook. – 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 made it four losing sessions in a row yesterday, but the final setback, which included a 92-point decline in the Dow Jones Industrial Average, was nowhere near as sizable as the deficits that had been suffered earlier in the session, when the Dow had been in the red by almost 200 points.

The immediate cause for the latest setback was disappointment that the European Central Bank President Mario Draghi had not proposed any tangible plans to rescue the ailing euro zone and its troubled currency, the euro. Last week, Mr. Draghi had said that the ECB stood ready to do whatever was necessary to come to the aid of the economies on the Continent and their currency. Now, investors want to see concrete proposals.

Also weighing on stocks over here yesterday was a downbeat report issued early in the session on factory orders. In the report, the Commerce Department indicated that new orders for factory goods had fallen in June, suggesting that the current listless pace of U.S. business activity was not yet ready to run its course, further underpinning the contention by most that the domestic economy will continue to struggle in the second half of this year. Our sense is that GDP growth, which meandered about at respective rates of 2.0% and 1.5% in the first and the second quarters will, at best, average about 2% in the current half.

In addition, investors were a little jittery ahead of this morning's release by the Labor Department on non-farm payrolls in July and the accompanying unemployment rate. A better-than-expected report on private-sector job growth last month that was issued by Automatic Data Processing (ADP) on Wednesday gave some hope going into this morning's critical release. But a report on new jobless claims released yesterday morning, in which the Labor Department reported an increase in such filings in the past week, dimmed those hopes somewhat.

As to that widely anticipated monthly survey, the government has just reported that the nation added 163,000 payrolls in July, which was well ahead of the forecasted increase of 90,000 jobs. At the same time, the U.S. reported that the unemployment rate edged up from 8.2% to 8.3%. That rate had been expected to hold steady at 8.2% last month.

Now, later this morning, the Institute for Supply Management will issue its closely watched survey on non-manufacturing activity. A flattish reading, indicating just a modest expansion in the services sector in July, is expected to be the result there.

Meantime, getting back to the employment report, the aggregate payroll gain, which matched the aforementioned ADP increase, was greeted warmly by Wall Street, where the equity futures already rallying strongly, perhaps in anticipation of a better jobs report, added to those gains. Now, with the Standard and Poor's 500 Index futures up by almost 16 points and the NASDAQ futures gaining better than 33 points, a strongly higher opening for stocks is anticipated when trading begins in less than an 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.