After The Close - Stocks traded in a narrow range today, as investors didn’t have a whole lot to get excited about. Before the opening bell, FedEx (FDX) reported better-than-expected earnings, but reduced its full-year outlook. The shipping giant indicated that the global manufacturing slowdown is cutting into its business and that customers are looking for less expensive ways to ship their packages. That news hurt FedEx stock and threw a wet blanket on the stock market.

On the plus side, the National Association of Home Builders reported that its gauge of industry activity was at the highest level since 2006, before the housing bubble burst. Also providing background support to trading was the ongoing buzz about Apple’s (AAPL) upcoming release of its latest iPhone. Apple stock is regarded as a leader in the tech space, and its shares topped the $700 mark for the first time today.

At the close, the Dow Jones Industrial Average was up 12 points and the NASDAQ was little changed. But the broader market was weak, with declining stocks outpacing winners by about five to four on the New York Stock Exchange. There were still many more new 52-week highs than lows, though, given the recent rally in the major averages.

Among the market’s sectors, energy and transportation stock fared poorly today. Yesterday’s abrupt $4-a-barrel drop in oil prices was followed up by more modest selling today. The declines appear to be mostly due to speculators liquidating their positions, possibly on fears that $100-a-barrel oil would crimp demand. Stocks of oilfield services companies, such as Schlumberger (SLB) and Halliburton (HAL) fell on lower oil prices. Shares of freight shippers, including those of United Parcel Service (UPS) and CSX Corp. (CSX) also fell in sympathy with the FedEx news.

Tomorrow, the beat picks up in terms of economic data and earnings reports. A significant amount of new information is due out on the housing market, as the August data on housing starts, building permits, and existing home sales becomes available. Further evidence that housing conditions are recovering is generally expected. Meantime, earnings announcements will arrive from Adobe Systems (ADBE), AutoZone (AZO), Bed Bath & Beyond (BBBY), and General Mills (GIS). Profit progress is expected in the first three cases, although estimates are for General Mills’ bottom line to come in slightly lower. The breadth of the sectors reporting, including technology, retail, and consumer staples, will provide investors with some clues as to the flavor of corporate earnings.   - 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 - U.S. markets were hovering around the unchanged mark at the midday hour on the East Coast. Stocks opened lower this morning as modest profit taking continued in the wake of last week’s announcement of further quantitative easing by the Fed. It also didn’t help the bulls’ case when FedEx Corp. (FDX) announced lower than expected earnings and reduced its guidance for the year. The package delivery giant cited slower global economic activity and a shift toward less-expensive shipping options for the lowered expectations.

Following that, the market’s clawed their way back and moved into positive territory this morning, aided by an upbeat report from the National Association of Home Builders. Recent survey results from that group indicated a three point jump in the homebuilder sentiment index to a seasonally adjusted reading of 40. This marked the index’s highest reading in over six years. The Dow Jones Industrial Average, NASDAQ composite, and S&P 500 Index have all retreated to the breakeven mark since then.

Over across the pond, European equities have fared somewhat worse. Although the major markets all opened lower, the FTSE 100 has battled back some, showing a loss of less than half a percentage point at Noon, New York time. However, Germany’s DAX and France’s CAC 40, continue to struggle, with losses for both hovering around the 1% mark. The largest weight on those markets remains concern over Spain’s debt and uncertainty over whether (or, more likely, when) that country will request a bailout from other euro zone members and, subsequently, the European Central Bank. - Mario Ferro

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

Stocks to Watch from The Survey Delivery giant FedEx Corp. (FDX) is in the earnings spotlight today. The company announced August-quarter results that topped Wall Street’s consensus estimates, but cut its full-year earnings guidance, citing factors such as challenging global economic conditions. The stock is trading moderately lower in the premarket. Shares of Advanced Micro Devices (AMD) will likely open with steeper losses, after the semiconductor company said that its CFO, Thomas Seifert, resigned.

On a positive note, shares of Dole Food Company (DOLE) are indicating a higher opening this morning, after the world’s largest producer and distributor of fresh fruits and vegetables agreed to sell its packaged foods and Asia fresh produce businesses to Japan-based ITOCHU Corp. for $1.7 billion in cash. Additionally, the stock of Alpha Natural Resources (ANR) is slightly higher in pre-market trading, after the beleaguered coal company announced plans to cut 1,200 jobs as it tries to improve its operations. – 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 first day of the new trading week brought out the profit takers on Wall Street. As we opined here yesterday, this should not have come as a surprise as the U.S. equity market is clearly overbought at this moment. The S&P 500 Volatility Index (or VIX) finished the session up slightly at 14.62. Typically, a reading below 20 suggests that buying may have become a bit overheated and thus, the market is then susceptible to a selloff if news (more below) were to disappoint.

While investors did not get any major news yesterday that would have prompted much market action, sellers were out from the get-go. When all was said and done, the Dow Jones Industrial Average, the tech-heavy NASDAQ, and the broader S&P 500 Index were each off about 0.3%. Among the 10 major sectors, only two groups (consumer noncyclical and healthcare) managed to book gains. The biggest laggards were the energy, basic materials, and industrial stocks. Perhaps, these sectors, whose fortunes depend largely on the macroeconomic picture, were hurt by yesterday’s lone economic report. Specifically, the Empire State Manufacturing Index, a survey conducted by the New York Federal Reserve, showed a surprisingly sharp drop in the region for September, when a flat showing had been the expectation. This report carries some weight, since it provides the first look at the health of the nation’s manufacturing sector this month. Tomorrow, we receive two key reports on the housing market, with the issuance of data on housing starts at 8:30 A.M. (EDT) and existing home sales at 10:00 A.M. (EDT).

Meanwhile, on a slow news day on these shores, the commodities markets grabbed the attention of traders yesterday afternoon when oil prices slid more than 4%, a move that had market participants perplexed. Over the final few hours of trading, several ideas were floated among investors for the selloff, including rumors of a strategic oil reserve release—which was denied by officials in Washington—and talk of a potential “fat finger” trade, in combination with light volume and a break of technical levels. While some of the losses were pared by the closing bell, oil ended the session at slightly above the $96-a-barrel mark on the New York Mercantile Exchange. Crude oil prices were above $100 at one point before the rapid selling occurred.

As for the day ahead, market making news will be light, as the economic and earnings calendars are pretty clear. However, we did get a telling report from FedEx (FDX) this morning. The shipping giant said the global economy is worsening and it is once again cutting its forecast for the fiscal year ending in May, 2013. This earnings release is not expected to be received favorably by the investment community, as FedEx’s results and outlook are used as a gauge to how the economy will fare over the coming months. Shares of the shipping company are lower in pre-market trading.

With less than an hour to go before the commencement of trading on these shores, the futures are pointing to a lower opening for the U.S. equity market. Overnight, trading in Asia was weaker and the major European bourses are currently in the red. Are we in the midst of a global stock market correction?  In terms of stock market returns, September has historically been the worst month of the year. Thus, a mild selloff, at the very least, can’t be quickly dismissed, especially with valuations a bit frothy at this juncture. Stay tuned. – William G. Ferguson

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