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After the Close - The final day of the trading week came to a close with the major U.S. equity indexes not very far removed from the neutral line, following some late selling. Such a trading pattern was the norm for much of the week, as there was little in the way of major surprises to push the pendulum forcefully in the direction of either the bulls or the bears over the five-day stretch. Indeed, the economic and earnings news on these shores was sparse this week and we did not get any major developments from either Europe or Asia.

Still, there was a slight positive bent to much of today’s session. Advancing issues led decliners by a comfortable margin on both the Big Board and the NASDAQ.  And, the number of issues hitting new highs far outpaced the number falling to new lows. Moreover, among the major U.S. equity indexes, the small-cap Russell 2000 posted the biggest percentage gain, yet another sign that investors are showing an increased appetite for risk these days, even with equity valuations now a bit frothy following the recent run-up. The S&P 500 Volatility Index (or VIX) finished below 14 and perilously close to its 52-week low, which is typically a sign that the equity market is overextended and, thus, could be susceptible to selling in the days to come, if the news were to disappoint.

From a sector perspective, mild leadership was shown by the telecommunications, healthcare, and energy groups—the latter result may been a case of some bargain hunting after energy issues sold off the prior few days as crude prices fell sharply. Conversely, basic materials stocks sold off late in the session, with notable declines posted by Cliff Natural Resources (CLF), Dow Chemical (DOW), and some of the steel stocks. On an individual basis, shares of KB Home (KBH) rose sharply after the company became the latest homebuilder to report improved results.  Michael Kors stock (KORS) also moved higher after the fashion house increased its second-quarter and full-year profit outlooks. The stock has more than doubled since its initial public offering last December. Speaking of recent IPOs, Facebook (FB) shares moved higher today ahead of lockup expirations in October and November. Nearly two billion more Facebook shares could hit the market over the next eight months. Fellow technology stalwarts Apple (AAPL), Google (GOOG), and Oracle (ORCL) also finished higher, with the latter helped by recently issued quarterly results.

Looking ahead to next week, the U.S. economy is likely to draw the attention of the investment community, with several key reports due. On Tuesday, we will get the S&P/Case-Shiller report on housing, along with data on consumer confidence; Wednesday will bring data on new home sales; the latest revision on second-quarter GDP, as well as durable goods orders are due on Thursday; and the week concludes with personal income and spending on Friday. On the earnings front, some notable reporters include HB Fuller (FUL), McCormick & Co. (MKC), Walgreen (WAG), Research in Motion (RIMM), Jabil Circuit (JBL), Accenture PLC (ACN), Global Payments (GPN), Carnival (CCL), Discover Financial Services (DFS), and Nike (NKE). The results and, more importantly, the outlooks provided by the latter three companies could be another gauge as to how the economy 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.  

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12:30 PM EDT - The U.S. stock market opened higher this morning, as traders looked to the overseas markets for direction. In Europe, traders were feeling a bit more optimistic, on news that Spain may soon unveil a plan designed to shore up its financial situation. The bourses put in a mixed session, as Germany’s DAX and France’s CAC 40 logged strong gains, and Britain’s FTSE 100 slipped slightly. The euro was up at almost $1.30. Notably this currency, which sank to about $1.20 in the summer, has strengthened considerably over the past few months. This likely reflects a better outlook for the region.

At just past noon in New York, the Dow Jones Industrial Average is up 43 points (0.3%); the broader S&P 500 Index is ahead five points (0.3%); and the NASDAQ, leading the market higher, is adding on 16 points (0.5%). Market breadth is favorable, as advancing stocks are outnumbering decliners by about 2 to 1 on the NYSE. Some of the market’s sectors are showing strength, with advances in the healthcare, services, and energy issues. In contrast, there is weakness in the transportation and basic materials names.

Technically, the S&P 500 Index seems to be consolidating near the 1,460 area. Investors may need to get comfortable with the market at this level, before making further commitments. The next catalyst capable of moving the markets up, or down, will likely be the third-quarter earnings season due to begin soon.

There were no notable economic reports released today. Moreover, next week gets off to a slow start, with no major reports coming out on Monday or Tuesday. However, there were some corporate news items worth mentioning. Michael Kors (KORS) stock is up after the apparel company raised its quarterly guidance. Meanwhile, KB Homes (KBH) is also seeing its stock rise after the home builder reported good quarterly figures. Notably, the home building stocks have rallied sharply over the past few months, possibly indicating a recovery in this sector.  In technology, Oracle (ORCL) stock is mixed after the software giant logged strong profits on a weaker-than-expected top line.

Elsewhere, active issues moving higher in price today include Questcor Pharmaceuticals (QCOR) and Facebook (FB), which is now back above the $20 mark. Stocks trading lower include VIVUS (VVUS) and Research in Motion (RIMM) - 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 iPhone 5, the latest version of technology behemoth Apple’s (AAPL) iconic smartphone, went on sale this morning to the delight of many consumers. There was some grumbling, however, regarding a few of the phone’s new features, such as a different power adaptor and Apple’s mapping software, which replaced Google’s (GOOG) version that was found on previous iPhones.
Oracle Corp. (ORCL) is in the earnings spotlight today, after the software company released August-quarter results late yesterday. Revenues slipped, but earnings advanced, and investors appeared to be pleased, overall, as the stock is trading slightly higher in the premarket. Shares of uniform provider Cintas (CTAS), e-commerce company TIBCO Software (TIBX), homebuilder KB Home (KBH), and restaurant operator Darden (DRI) are also indicating higher openings on earnings news.

Finally, a flurry of dividend increases have been announced from a variety of companies, such as semiconductor manufacturer Texas Instruments (TXN), restaurant operator McDonald’s (MCDFree McDonald’s Stock Report), medical supplies company Covidien PLC (COV), and Lennox International (LII), which designs and manufactures products for HVAC systems. – 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 - Wall Street started yesterday's session notably lower, and for a brief time it seemed as though we would have a decent-sized retreat in the equity market. A lackluster figure on new weekly jobless claims and a dour report on the leading indicators did not do much to calm the market's jitters, which had been set into place earlier by dispiriting economic data out of China, Japan, and Europe.

However, the sellers could not mount a serious attack, as has been the pattern recently. Indeed, a look at multi-month charts on the Dow Jones Industrial Average, the Standard and Poor's 500 Index, and the tech-heavy NASDAQ shows a steady climb in the major averages since late July, with a last spike upward earlier this month before we have seen some flattening out over the last week, or so.

As for the latest session, after the market's initial decline, stocks steadied themselves, with the Dow actually closing higher by some 19 points, while the S&P 500 and the NASDAQ eased just slightly. There was one index that suffered a major setback, however, as the Dow Transports tumbled by 141 points on the day, or 2.77%, largely on a major drop in the shares of the leading railroads. Leading the way lower here were the shares of Norfolk Southern (NSC), which plunged by 9.1%, to close the session at $66.11. Sparking that selloff was an announcement from the railroad behemoth that its earnings would fall short of expectations. Other large rails dropped in sympathy.

As to other news, there was a sizable selloff in the shares of home goods retail chain Bed Bath & Beyond (BBBY), as that iconic retail giant posted somewhat disappointing quarterly results. The stock tumbled almost 10% in response. Shares of struggling retailer, J.C. Penney (JCP) fell even more sharply, dropping more than 11%, after that company's CEO said that new shops within its stores were doing better than more established parts of its department stores. Another casualty of the slumbering global economy were the basic materials stocks, with Alcoa (AAFree Alcoa Stock Report), Kennametal (KMT) and U.S. Steel (X) each selling off moderately. 

As to the economy, China reported that manufacturing had contracted for an 11th consecutive month, while Europe gave out more indications that the Continent's struggling economies are moving more deeply into recession. Our economy, meantime, is also under some pressure, with the notable exception of housing, as the leading indicators eased in August, falling by 0.1%. An unchanged reading had been the expectation. Also, jobless claims remain in the troubling 375,000 to 400,000 level, after having pushed down to about the 350,000 mark earlier this year. The weak employment outlook is the principal reason that the Federal Reserve recently launched its latest quantitative easing effort.

However, yesterday's early gloom not only did not continue for the full session, but it has given way to some optimism this morning, as global equities drifted higher overnight, with modest gains in both Asia last night and Europe so far this morning. Meantime, our futures are suggesting a higher opening when trading gets under way in about a half hour form now, with the S&P 500 Index futures now ahead by almost five points and the NASDAQ futures gaining just about a dozen points. – Harvey S. Katz

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