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After the Close - The stock market today performed as if the summer doldrums were upon it, meandering in and out of positive territory, and ultimately closing not far away from where it opened the session. The market had a hard time building on the gains it had made since the correction it endured in May ended, since there was no major news to push it in either direction.

At the end of the day, both the Dow Jones Industrial Average and the NASDAQ were little changed, although the bias was slightly positive in the Big Board’s advance-decline line. Indicative of the market’s recent strength, though, was that there were many more stocks hitting fresh 52-week highs than lows.

Recent investor optimism has been lifted by the thinking that central banks on both sides of the Atlantic will invoke their powers to provide monetary stimulus. Clearly, there is a push in that direction by some members of the Federal Reserve Board. And, with inflation contained, the path seems clear for the Fed to initiate a third round of quantitative easing (QE3). At this point, too, many on Wall Street would likely be disappointed if a QE3 doesn’t materialize. Similarly, there are rising expectations for the European Central Bank to take more aggressive steps to boost the regional economy.

Meanwhile, the day’s most active issues on the New York Stock Exchange included shares of Bank of America (BAC - Free Bank of America Stock Report), Sprint Nextel (S), Hewlett-Packard (HPQ - Free HP Stock Report), and Advanced Micro Devices (AMD). All of the above were fractionally higher, with the exception of Bank of America stock, which was unchanged. Among Dow-30 stocks, Hewlett-Packard was the day’s biggest gainer, while McDonald’s (MCD - Free McDonald's Stock Report) fell the most, percentage-wise.

Tomorrow brings a fresh batch of economic reports, the first of which is the weekly initial jobless claims data. There, a number similar to the level that has been coming in lately, and one suggestive of moderate job growth, is expected. Also on tap for Wednesday is the June figure for the balance of trade, where lower oil prices are seen to have reduced the deficit modestly. A third report, on wholesale inventories for June, is projected to match May’s advance.

There are also more earnings releases on the way, including those of retailers Kohl’s (KSS) and Nordstrom (JWN), where some slippage might be in evidence. But the tone of tomorrow’s economic data and the feel of the news out of Europe will probably take center stage.  - Robert Mitkowski

 

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

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12:00 PM ET -The U.S. stock market opened lower today, but then managed to pare its losses, and head into positive territory by the noon hour on the East Coast. Some of the initial weakness may have been due to renewed concerns about Europe’s financial stability. Notably, traders received another batch of mixed economic data for the region. Nonetheless, at this point, the bourses on the Continent are trading with only modest losses.

Meanwhile, the corporate reports here in the U.S. keep streaming in. Dow component McDonalds (MCD - Free McDonald's Stock Report) is seeing its stock trade lower, after the hamburger chain posted weaker-than-expected same-store sales for the month of July.  However, another member of the Dow, Walt Disney (DIS - Free Disney Stock Report) put out decent results, and that stock is rising. In retail, Macy’s (M) put out a good report, sending that issue higher. Elsewhere, shares of Soda Stream (SODA) are up on strong results. Further, Dean Foods (DF) continues its recovery, as that stock is soaring on solid quarterly profits.

Although the economic news was light today, we did get a good reading for second-quarter productivity, as that measure increased 1.6%, just a bit better than many had expected. Tomorrow, all eyes will be on the employment numbers, as the weekly initial and continuing jobless claims data are set to be released before the market opens.

At just past noon in New York, the markets seems to be on the mend. The Dow Jones Industrial Average is up 27 points (0.2%); the S&P 500 Index is ahead two points (0.2%); and the NASDAQ is now higher by three points (0.1%). Market breadth suggests that the tone is slightly positive. Notably, rising stocks are just mildly ahead of decliners on the NYSE. The market sectors are still mixed, but there is some strength in the basic materials and energy issues. The fact that oil is trading higher, now at $94 a barrel, is likely helping. Weakness can be found in the utilities and technology groups.

Technically, the S&P 500 Index broke through the 1,400 level yesterday, extending the three-day rally. Traders may need some time to digest the move and get comfortable with the Index at this level. So, hitting some resistance here would not be that unusual. It will be important to watch traders’ behavior as the session draws to a close. Hopefully for the bulls, we will see further bargain hunting, suggesting some strength.   - 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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Stocks to Watch from The Survey– Investors are getting more information regarding the state of the consumer, though the picture remains mixed. Entertainment giant and Dow-30 component Walt Disney (DISFree Walt Disney Stock Report) has reported better-than-expected June-period earnings, thanks to its blockbuster movie The Avengers and strength at the Parks and Resorts segment. However, investors may have been looking for more on the top line, and DIS shares are trading modestly lower in the premarket. In the retail world, shares of Macy’s (M) are indicating a higher opening this morning, after the department store released solid second-quarter results and offered an upbeat outlook. Meanwhile, apparel company Ralph Lauren (RL) announced better-than-anticipated June-quarter earnings, but said that sales and margins would likely be under pressure in the September term, causing the stock to fall notably in pre-market trading. Turning to travel, both Orbitz Worldwide (OWW) and Priceline.com (PCLN), two of the dominant players in the online travel business, disappointed investors with their second-quarter results and outlooks, and the two issues are trading sharply lower in the premarket. Finally, shares of McDonald’s (MCDFree McDonald’s Stock Report) are set to open lower this morning, after the restaurant released July sales figures that missed the mark.

In other news, the stock of Dean Foods (DF) is soaring in the premarket, after the dairy company released June-quarter results and announced plans to spin off its WhiteWave-Alpro division, a rapidly growing business that sells Horizon Organic dairy products and Silk soy milk. – 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 - The bulls made the hat trick yesterday, which in sports lore, means that there were three in a row, in this case stock market advances. To be sure, the last two of that trio were modest gains. Nevertheless, the latest uptick brought the Dow Jones Industrial Average--a 51-point winner yesterday--ever closer to the high point of the past year, and put the Standard and Poor's 500 Index and the tech-heavy NASDAQ above psychologically significant levels of 1,400 and 3,000, respectively.

Helping the markets again yesterday was some further follow-through from Friday's surprisingly good employment report and words from a Federal Reserve official, namely Federal Reserve Bank of Boston President Eric Rosengren, calling for additional, and very aggressive, central bank stimulus as a way of getting the jobless rate down materially. Expectations that the European Central Bank will come to the aid of economically slumping Spain and Italy was also a factor.   

Meanwhile, earnings season is rolling along to a decent conclusion, with now some 425 of the 500 companies in the S&P 500 Index having reported their quarterly results. And to date, nearly two-thirds of them have exceeded consensus expectations. That is slightly higher than the historical average. Of course, many of these companies have beaten lowered expectations, as forecasts had come down rather notably before the actual onset of second-quarter reporting season.

As for other news this week, there has been a lull in the pace of economic releases over the past few days, following an active stretch in the previous five-day period. Moreover, another busy week is on tap for the subsequent five days. As to the week at hand, we will be getting weekly data on jobless claims tomorrow, along with the international trade figures. As for claims, the guessing is that such filings ticked up by 5,000 in the latest week, from 365,000 to 370,000. At the same time, expectations are that the international trade gap came down a bit in June, from May's $48.7 billion. Lower average oil prices during the late spring may well have been a factor there. Oil has rebounded in recent days, however, so that the trade gap figures over the summer may not be as favorable.

Finally, the markets have seen some selling in Europe this morning, pressured, in part, perhaps, by a forecast from the Bank of England that Britain's emergence from its current recession later this year will be very understated. Also, Walt Disney (DIS - Free Disney Stock Report), a member of the Dow-30, reported its latest quarterly results after the stock market closed for trading yesterday, coming in with a 24% profit gain, thanks to a strong showing by its theme parks and resorts division. However, those results, while positive, are apparently not up to snuff as far as investors are concerned, as that stock, which has done well so far this year, is easing back modestly in the pre-market, as we prepare for what shapes up as a lower opening for Wall Street, in general, in less than an hour from now.  

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