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After the Close - The U.S. stock market traded sharply lower today, after some half-hearted attempts to pare the losses. At the end of the session, the Dow Jones Industrial Average was off 107 points (-0.8%); the broader S&P 500 Index was lower by 11 points (-0.8%); and the NASDAQ , which tends to be a bit more volatile, surrendered 32 points (-1.1%). Weakness was widespread, as measured by market breadth. Specifically, declining issues outnumbered advancers by more than 2 to 1 on the NYSE. Weakness was distributed throughout all of the market’s sectors, with sharp losses in the basic materials, technology, and energy names. Although still in negative territory, there was some relative strength in the healthcare and utility names, as risk-averse traders looked to these more stable issues.

Technically, the S&P 500 Index tested the 1,400 area today, and closed a half a point below this key area. After hitting some resistance near 1,420, it seems the Index is now consolidating in a sideways range. This is not unusual given the decent run-up that the market logged in August.

The weakness in the U.S. markets today, followed a difficult session overseas. In Asia, the markets were down sharply overnight. In Europe, there were considerable losses on Germany’s DAX and France’s CAC-40. The move lower reflects a batch of mixed economic news, and concerns about the strength of the international economy.

Meanwhile, traders in the U.S. got a few economic reports today to digest. Specifically, initial jobless claims for the week ended August 25th came in at 374,000, which was slightly higher than many analysts had expected. The news may have some traders concerned about the employment report for August, due out at the end of next week. Elsewhere, the Department of Commerce reported that personal income rose 0.3% for the month of July, which more or less matched expectations. Meanwhile, personal spending increased 0.4%, which was an improvement from the flat June reading.

Tomorrow, we get a look at a few more reports, including the Chicago PMI, the University of Michigan’s Consumer Confidence Survey, and a report on factory orders for the month of July. But, the real news tomorrow will come as Fed Chairman Ben S. Bernanke makes his remarks at Jackson Hole, WY. As traders tend to be defensive, today’s selling may well have been in advance of that speech.

As always, there were also a few important news items out today. Shares of Pandora Media (P) moved higher on a decent report. Conversely, TiVo (TIVO) stock was down after that company reported results and guidance that failed to impress Wall Street. - Adam Rosner

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

12:30 PM ET - Wall Street is selling off today on renewed global economic concerns. Just after noontime on the East Coast, the Dow Jones Industrial Average was down 99 points and the NASDAQ was off 30 points. Decliners were outpacing advancers by better than a three-to-one margin on the New York Stock Exchange.

Stocks appear to be following the bearish market conditions set earlier today in Europe and Asia, where reports surfaced showing euro-zone business confidence fell to a three-year low and July retail sales declined in Japan. 

Traders may also be bracing for the possibility that Federal Reserve Chairman Ben Bernanke will indicate no further monetary stimulus is called for at this time when he gives a speech Friday at the Fed’s annual retreat in Jackson Hole, Wyoming. A number of investors had been hoping another round of bond-buying by the central bank would lift the economy’s fortunes. But the business data in recent weeks has been moderately positive, making a move by the Fed less than certain.

For instance, the economic reports released today on weekly initial jobless claims, personal income, and personal spending, while not overwhelmingly bullish, contained upbeat elements. And yesterday’s second-quarter GDP revision was better than initially estimated. If anything, economists may be looking for somewhat stronger third-quarter GDP growth than they were before.

As for the market’s various sectors, stocks of basic materials, industrial, and energy companies are having a tougher go of it today. That ties back into worries about the global economy. The shares of mining giant BHP-Billiton (BHP), heavy equipment maker Caterpillar (CAT Free Caterpillar Stock Report), and oilfield services specialist Halliburton (HAL) are off notably as a result. Technology shares are also being hurt by disappointing sales at telecom equipment maker Ciena (CIEN), too.

Not all the news is downbeat, though. Pandora Media (P) stock is up nicely on a favorable quarterly earnings report and upbeat corporate guidance.

Elsewhere, there was a deal of note in the Canadian banking sector. The Bank of Nova Scotia (BNS) is buying ING Bank of Canada from its Dutch parent. Bank of Nova Scotia shares are off moderately on the news, but the move is likely to offer long-term benefits.

Overall, stocks were probably due for a selloff after this summer’s rally. Lingering global worries, combined with the now-even chance that Fed Chairman Bernanke will dash hopes for another round of quantitative easing when he speaks tomorrow, may have provided a reason to take profits  - 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 While the earnings news has slowed considerably, there are still some reports trickling in. Online radio operator Pandora Media (P) appears to be the big winner, as its stock is trading sharply higher on news that July-period results were better than expected. The company’s outlook also appeared to please investors. On the other hand, shares of Ciena Corp. (CIEN) are indicating a significantly lower opening this morning, after the telecommunications equipment company released lackluster July-quarter results and an uninspiring outlook.

There is also news out of the retail sector, as a number of companies have reported same-store sales for August. Indeed, shares of apparel company The Gap (GPS), department store Macy’s (M), warehouse club Costco (COST), mass-market retailer Target (TGT), and Limited Brands (LTD), parent of Victoria’s Secret, are all up slightly in pre-market trading after reporting August comps. August sales appeared to be strong, overall, as parents and children got in the last of their back-to-school shopping. – 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 stock market did little again yesterday in very slow trading, as the bulls and the bears balanced positive economic news against a Federal Reserve summation of the economy that shed no new light on whether or not the central bank would provide additional assistance to the economy via new bond purchases or other monetary stimulus maneuverings in the short run.

Specifically, at 8:30AM (EDT), the Commerce Department reported that the U.S. Gross Domestic Product (GDP) rose by an upwardly revised 1.7% in the second quarter, which was in line with expectations, but two-tenths of a percentage point higher than the initially estimated gain of 1.5%. Healthier levels of exports, consumer spending, and housing demand helped the latest GDP showing.

And speaking of housing, the National Association of Realtors said yesterday that its index for pending sales of existing homes had increased by 2.4% last month, to a reading of 101.7. That was the best survey result in more than two years, with the previous peak in April of 2010 being sort of an artificial high as buyers were at that time taking advantage of federal tax credits, which were about to expire. Now, with no such prop around, the latest metric bears more significance.

On the other hand, the Fed issued its Beige Book summation of economic activity across the country yesterday afternoon. This is a compilation of anecdotal observations on the level and scope of economic activity stateside. In general, the Beige Book, which is used by the Federal Reserve to assist it in fashioning monetary policy at its next FOMC meeting--which in this case is scheduled for September 12th and 13th--found that the economy was expanding, but in slow and uncertain fashion. This was little changed from earlier observations and shed no new light on the likelihood, or not, that the central bank would inject more monetary stimulus into the economy.

That uncertain state of affairs makes tomorrow's speech by Fed Chairman Ben S. Bernanke at Jackson Hole, Wyoming that much more critical. The Fed Chairman will possibly use that forum, which is being put on by the Federal Reserve Bank of Kansas City, and which is an annual event, to announce new easing initiatives. At least that is what the bulls are hoping for. Our sense continues to be that there is no better than a 50-50 chance that the Fed will act in this regard, as we sense that with things getting slightly better for the economy, there is no pressing need for a major new response. However, the fact also remains that employment growth is lagging and joblessness is still very high, at 8.3%. What is likely is that what Mr. Bernanke says will have some effect on the stock market tomorrow, with a large possible swing in one direction or the other. The paucity of volume, in fact, could exaggerate any big moves. The market's recent lack of volatility is perhaps a sign that investors want to keep their powder dry before the speech.

As to the markets' performance today, the European bourses are mostly lower on worries ahead of Mr. Bernanke's speech, their own region's festering economic and financial problems (which now center on Spain and Greece), and worries about a possible rise of inflation in China. As to our market's immediate outlook, the equity futures are pointing to a moderately lower start in less than an hour from now. Here, though, we see little elevated volatility today, as Wall Street readies itself for the Jackson Hole festivities tomorrow. – Harvey S. Katz

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