After the Close - The major U.S. equity indexes traded in a narrow band for most of the session today, but, overall, there was a moderately positive tone to the trading day. By the closing bell, the Dow Jones Industrial Average, the NASDAQ, and the S&P 500 Index had added 13, five, and two points, respectively. Even the NASDAQ, which was weighed down earlier in the day by a subpar showing from technology stocks, strengthened as the session progressed, helped by a recovery in those same technology sectors. Giving equities a bit of a boost today were a few encouraging reports on the domestic economy.

From a sector perspective, the only laggard among the 10 major groups was energy. A sharp drop in the price of oil (crude prices finished the latest session on the New York Mercantile Exchange below $92 a barrel after moving past the $100 mark just a few days ago) hurt some of the oil stocks. Shares of both Exxon Mobil (XOM Free Exxon Stock Report) and Chevron (CVX - Free Chevron Stock Report) were weaker today. Conversely, some leadership was provided by the consumer cyclical sector. Within that area, homebuilding stocks performed well on the shoulders of two positive reports from the housing industry (more below). Airline stocks also fared well today, as investors believe that the aforementioned pullback in fuel prices could have a positive impact on airline results. Shares of United Continental (UAL), Delta Airlines (DAL), and JetBlue (JBLU) finished the day in the plus column.

As noted, we received two more encouraging reports on the burgeoning housing industry this morning. Before the U.S. market opened, the Commerce Department reported decent data on housing starts and building permits. Then some 30 minutes into the trading day, the National Association of Realtors said that existing home sales had hit a two-year high in August and the national median home price had risen at its fastest pace since January, 2006. Our sense is that an improvement in housing could be a big shot in the arm for the U.S. economy—sentiment that seemed to be shared by the investment community, as the equity market perked up shortly after the second housing report was released. We also got some news from overseas that is likely to have an effect on the global economy. Specifically, the Bank of Japan announced overnight that it will be active on the bond-buying front in an effort to pump some life into that nation’s struggling economy. Not surprisingly, Asia’s indexes got a boost from the monetary policy announcement.

Meanwhile, oil was once again very much in the news today. Weighing on oil prices were weekly data from the Energy Department's Energy Information Administration showing that crude supplies had grown by 8.5 million barrels ( or 2.4%), to 367.6 million barrels in the latest week, which was 8.4% above year-ago levels. Also, Saudi Arabia’s efforts to lower prices and a post-storm surge in U.S. crude inventories kept pressure on crude prices.

Looking ahead, the final two days of the trading week will be rather light on both the economic and earnings fronts. On the economic side, we will receive data on the leading indicators and initial weekly unemployment claims tomorrow, as well as the latest manufacturing survey from the Philadelphia Fed. With regard to earnings, Adobe Systems (ADBE) and Bed Bath & Beyond (BBBY) are scheduled to report their latest quarterly results after today’s close; TIBCO Software (TIBX), Cintas (CTAS), and ConAgra Foods (CAG) are on the docket tomorrow; and Darden Restaurants (DRI) and KB Home (KBH) cap off the week on Friday. The KB Home report will be another gauge to how the homebuilding industry is faring.   - William G. Ferguson 

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


12:15 EDT - The U.S. stock market got off to a choppy start this morning, but is now moving higher. At just past noon in New York, the Dow Jones Industrial Average is ahead 41 points (0.3%); the broader S&P 500 Index is up four points (0.3%); and the NASDAQ, which is a bit sluggish, is adding on three points (0.1%). Market breadth is mildly favorable, with advancing issues just slightly ahead of decliners on the NYSE. Most of the market sectors are all in positive territory, which is a good indicator. There is leadership in the consumer non-cyclical stocks, as well as strength in the financial names. However, there is some relative weakness in the technology and utility stocks.

Technically, the S&P 500 Index now seems to be consolidating at the 1,460 level, following the large move up a few days ago. After a large run it is not surprising to see the market move sideways for the most part this week, as some investors take profits, and others wait on the sidelines possibly looking for a pullback. Notably, the major averages have made some strong moves lately, and it seems, as trading volumes have been picking up, that the mood has become a bit more bullish on Wall Street.

There were some encouraging economic reports released today. Specifically, housing starts for the month of August rose to 750,000, annualized. Although this figure fell short of analyst expectations, it still suggests some improvement. Building permits came in at 803,000 in August, and that showing was a bit ahead of the consensus view. But, the real improvement was apparent in the existing home sales figures. Such sales for the month of August rose to an annualized 4.82 million units, which was far better than the 4.5 million that many had anticipated. Notably, the Home Builders ETF (XHB) is rallying almost 2% on the news. This issue has roughly doubled over the past 52 weeks, which likely reflects a better housing situation. The recovery in this sector should not be underestimated, as the housing market and its related industries make up a substantial part of the broader economy. 

In corporate news, General Mills (GIS) is seeing its stock move higher, after the food company announced stronger-than-expected earnings. Also in the food area, Cracker Barrel (CBRL) stock is up on a good report. Elsewhere, AutoZone (AZO) stock is up, despite a mixed release.

Overseas, the Asian markets got a big boost overnight, as the Bank of Japan announced that it will be making further asset purchases in an effort to stimulate the nation’s economy. In Europe, the bourses had a volatile session, but moved higher at the close.   - Adam Rosner

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 Investors are going over a few earnings reports this morning. Shares of General Mills (GIS) are trading modestly higher in the premarket, after the cereal and packaged foods giant reported solid August-period results, which were helped by recent acquisitions. Restaurant operator Cracker Barrel (CBRL) appeared to be the big winner, as its stock is trading sharply higher after the company released strong July-quarter results. On the other hand, shares of women’s apparel retailer Ascena Retail Group (ASNA) and AutoZone (AZO), which sells automotive parts and accessories, are indicating slightly lower openings on earnings news.

In other news, software and technology behemoth Microsoft (MSFTFree Microsoft Stock Report) has increased its quarterly cash dividend 15%, to $0.23 a share. The first payment in this amount is scheduled for December 13th. The stock is little changed in pre-market trading. – 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 U.S. stock market marched in place yesterday, with a mild selloff early in the session being largely overcome by the close. In fact, as the final bell sounded, the leading equity averages were basically unchanged on the day, with a token 12-point gain in the Dow Jones Industrial Average basically offset by nominal losses of one and two points, respectively, in the NASDAQ and the Standard and Poor's 500 Index.

Winners, moreover, were just about in line with decliners on the NASDAQ, but trailed modestly on the Big Board. The only news of note yesterday, which again saw limited trading volume due in large part to the observance by many traders of Rosh Hashanah, was a reduced profit outlook from package-delivery services giant FedEx (FDX) and news of a rise in builders' confidence. On this latter count, the National Association of Homebuilders said that such confidence had risen to its highest level in more than six years in September. This was the fifth monthly gain in sentiment in a row, and further underscores the emerging, albeit still modest, strength in this heretofore highly troubled sector. Indeed, we even are seeing some housing shortages in New York City, which is something that has not been present for perhaps a decade, or more.

Meanwhile, the picture overseas is somewhat brighter this morning, which could help sentiment and the market's performance on our shores. For example, world stocks are climbing today on news that the Bank of Japan has become the latest major central bank to announce action to shore up the very fragile economic growth in that country. The BOJ is buying up fixed-income assets in ever-greater amounts to firm up that nation's slumbering economy. This move follows the U.S. Federal Reserve's launch last week of its own asset purchasing program, now dubbed QE3. European stocks are also pressing a bit higher this morning, following gains in not only Japan's Nikkei 225 but also China's  Hang Seng Index.

And over here, our futures are climbing, benefiting from some carryover from QE3 and also from a decent report just issued on housing starts and building permits in this country. Here, the Commerce Department has reported that housing starts rose 2.3% in August from the previous month, and were a sizable 29.1% above the August, 2011 level. At the same time, building permits, which had jumped in July, eased back nominally in August from that July total of 811,000 permits, but were 24.5% above the August, 2011 mark.

Meanwhile, some 30 minutes after the start of the new trading day, the National Association of Realtors will issue its data on August sales of existing homes. Looking down the road, we will then get data on the leading indicators, the Philadelphia Federal Reserve, and jobless claims tomorrow.

Overall, the economy in our country is pressing forward, but at a pedestrian pace, which explains the Federal Reserve's monetary moves last week. We are in an uneven expansion, with the aggregate gains in the still-depressed housing market being offset by continued stumbling about on the employment front.

As for stocks, there is little question that the equity market is overbought right now, but with rather few viable alternatives for Americans to invest in during this era of negligible interest rates, the only game in town sometimes seems to be equities. Even so, we would be on the lookout, at least in the very short term, for any signs of disappointing economic news, which could spark a brief selloff in this somewhat extended market. - Harvey S. Katz

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