After the Close - It was a down day on Wall Street, albeit somewhat grudgingly. Specifically, the first half of the day brought out the sellers, and each of the major U.S. equity indexes spent most of the session in negative territory. Jitters about Europe’s largest economy (more below), along with news here that sales of Apple’s (AAPL) recently unveiled iPhone 5 were not as strong as some analysts had expected, weighed on the market, particularly the tech-heavy NASDAQ. But some buyers did return to the market in the final few hours and a good portion of the earlier losses were retraced. In fact, the Dow Jones Industrial Average briefly gave way to nominal gains before last-minute selling aborted that move. The NASDAQ, though, was not able to fully overcome the weakness in the technology area, closing off 19 points. Overall, the spread between advancing and declining issues was thin, with a modest edge going to the latter on both the Big Board and the NASDAQ.

Among the top 10 sectors, trading was pretty well defined, though. Those sectors most closely tied to the performance of the global economy were the biggest laggards, with basic materials and technology stocks the weakest performers. On the other hand, the more-defensive segments, most notably the telecommunications, healthcare, consumer noncyclical and utilities areas, were in favor today. News, earlier today that business confidence in Germany fell for a fifth consecutive month unnerved investors. The index, based on a survey of 7,000 businesses, is viewed as a leading indicator, providing clues to where the economy is going in the coming months. Investors are nervous that if Germany’s economy were to stall, it could put a big dent in the euro zone’s ability to tackle the region’s sovereign-debt problems. Owing mostly to this report, the euro weakened versus the dollar, crude oil prices fell on the New York Mercantile Exchange, the major European bourses finished in the red, and demand for fixed-income securities spiked, driving yields on U.S. Treasuries lower.

As noted, the day’s big news on these shores came from the technology area. Apple shares fell modestly after sales of the recently released iPhone 5 fell short of Wall Street’s expectations. In addition to the Apple news, shares of Facebook (FB) slipped on a report in a leading financial publication that said the stock is worth just $15. The pullback tripped the NASDAQ's circuit breaker meant to shield stocks from manipulation by short sellers. Conversely, shares of fellow technology stalwart Google (GOOG) hit a new all-time high today after a major brokerage house report said the stock (up more than 30% since the summer) may have more room to run. Google shares briefly reached $750.

Looking ahead, the U.S. economic news picks up tomorrow with the latest report on consumer confidence and the S&P/Case Shiller report on the housing market. Stocks in the latter area have been on a remarkable run of late, as industry-wide housing data continue to improve. Today’s quarterly results from Lennar (LEN) were another good snapshot of this improving sector. Speaking of housing, we will get new home sales data for the month of August on Wednesday. Rounding out the busy economic week will be the final revision to second-quarter GDP and reports on durable goods orders and personal income and spending.  Our sense is that with earnings news still rather light, the economic data, along with any news from the euro zone, will be the primary focus of the investment community this week.   - William G. Ferguson 

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


12:30 PM EDT - The U.S. stock market got off to a weak start this morning, but is attempting to pare its losses as we pass the noon hour on the East Coast. Once again, concerns about the situation on the Continent have weighed on sentiment. There has been some disagreement between leaders in Germany and France as to how quickly to move ahead with banking initiatives in the region. Some weak economic data released in Germany has also added to worries.  Moreover, there have been reports that Greece’s budget deficit is running higher than previously expected. This highlights that problems in that nation are still an area of concern. The major bourses are just closing out the session with moderate losses. However, France’s CAC-40 is off almost 1% for the session. In Asia, the markets were also weak, on fears about slower expansion in China.

At just past noon in New York, the Dow Jones Industrial Average is off 25 points (-0.2%); the broader S&P 500 Index is down four points (-0.3%); and the NASDAQ, which is leading the market lower, is shedding  22 points (-0.7%). Market breadth is mixed, as declining stocks are outnumbering advancers by just a small margin on the NYSE. This suggests that there are some pockets of strength. Advancing issues can be found in the transportation and utility sectors, but there is weakness in the consumer cyclical and basic materials stocks.

Technically, the S&P 500 Index seems to be taking a much needed pause at this point. With the VIX at about 14, investors have likely become a bit overly bullish about the market. Further, we have seen little full-scale profit taking in quite some time.

There were no economic reports released this morning. Tomorrow, things heat up a bit, as the Case Schiller 20-City Index for July is due out. The FHFA Housing Price Index for July is also set to be released. These issuances may help shed light on the housing market recovery. We are also due to receive the Conference Board’s report on consumer confidence for September.

There was some corporate news worth mentioning. Lennar (LEN) stock is off a bit even though the home builder put out a solid report. Questcor (QCOR) is seeing its stock sink, on concerns about an investigation by the government. Also, technology leader Apple (AAPL) stock is lower, as some analysts may have concerns about the recent sales of the iPhone 5. - 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 - Tech behemoth Apple (AAPL) said it sold more than five million of the iPhone 5 in three days, shattering a record set by the previous model, as customers lined up in stores from Sydney to San Francisco for the company’s latest handset.

MetLife (MET) and General Electric (GE - Free General Electric Stock Report) restructured a planned sale of the insurer’s online bank to the industrial conglomerate that had come under some scrutiny and will seek approval of the pact from a different regulator.

Aerospace titan Boeing (BA - Free Boeing Stock Report) is in the headlines today, as the belief is spreading among airlines and lessors that its 777 twin jet needs a makeover. The model has been a mainstay on long-haul routes since 1995.

The investor enthusiasm that surrounded the IPO of real estate information provider Trulia (TRLA) will probably carry over into the homebuilder arena. The recent unexpected quarterly profit posted by KB Home (KBH) should further that cause.  Lennar (LEN) also bested expectations earlier this morning. - Erik M. Manning


Before The Bell - Hurt by a late-Friday afternoon selling squall, U.S. equities ended the latest session largely to the downside, led lower by a 17-point drop in the Dow Jones Industrial Average and a nominal retreat in the Standard and Poor's 500 Index. This late, and not very telling, downturn put both of those indexes slightly into the red for the latest five-day stretch, following a trio of weekly gains.

Hurting the equity market, in general, is a concern about the pace of global economic growth. Indeed, such concerns are creeping into the international markets this morning, where earlier today, the London FTSE 100 was off by 0.6%, the Paris CAC-40 was in the red to the tune of 1.3%, and the Frankfurt DAX was lower by 0.7%.Those declines followed somewhat more modest setbacks in the Tokyo Nikkei 225, the Hong Kong Hang Seng Index, and the Sydney ASX S&P 200 Composite.

As noted, there is a general concern about growth overseas and in this country, and this morning, at least, those growth worries are more than offsetting continued optimism about the recent succession of monetary easing maneuvers on both sides of the Atlantic. Not surprisingly, our equity futures are pressing notably lower at this hour, with the Standard and Poor's 500 Index futures off by about seven points and the NASDAQ futures down by almost 20 points, suggesting that when Wall Street begins the new week in about a half hour from now, it will do so sharply to the downside.

As to the week ahead, in addition to the likely lower opening this morning, and a paucity of earnings reports, save for those from semiconductor maker Micron Tech. (MU) and Walgreen (WAG), we will have a fairly busy news week on the economy, leading off tomorrow with data on consumer confidence from the Conference Board. A solid gain in that metric is the forecast for September following August's falloff. Then, on Wednesday, we are due to get the latest news on new home sales, where a moderate increase in that key category of the fast-recovering housing market is the consensus forecast. Thursday, meantime, will bring data on durable goods orders and revised second-quarter GDP. Finally, Friday will see news on personal income, consumer spending, and consumer sentiment, with this last number being furnished by the University of Michigan.

Finally, for technicians, while the Dow Jones Industrial Average has generally held in there, with that closely watched index still near five-year highs, the Dow Transports are breaking down. This composite of airlines, railroads, and trucking companies was off sharply in the latest week, led lower by a discouraging report and forecast from railroad behemoth Norfolk Southern Corp. (NSC). In all, this index slumped by almost six percent in the latest five-day period, and is now off by 2.2% for the year. This is a clear reversal for followers of the ``Dow Theory'', which holds that the Industrials and Transports need to move in lock step with one another to confirm a trend. There is this significant divergence here. Is that a major event? At this time, perhaps, it is a key happening for just the followers of the ``Dow Theory." We will see what goes on from here and if it becomes a larger issue. At the minimum, the recent divergence bears some watching, we think. – Harvey S. Katz

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