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After The Close - The U.S. equity indexes, after a difficult start to the day, were able to right themselves quickly and traded in positive territory for much of the session before some selective late-day selling pared a portion of the earlier gains by the closing bell. The Dow Jones Industrial Average, hurt by poor showings from a few of its components (more below) finished nominally higher, while the NASDAQ and the broader S&P 500 Index booked modest advances. Overall, there was not much conviction on the part of investors, as volume was not particularly heavy and the spread between advancing and declining issues was razor thin in favor of the latter on both the New York Stock Exchange and the NASDAQ. Some of the hesitation may be due to the mixed signals today on the global economy. Investors are also waiting for Friday’s report on the U.S. labor market and the fast-approaching third-quarter earnings season before making any notable moves in either direction.

From a sector perspective, most of the 10 major groups finished in positive territory, with a bit of leadership coming from the consumer cyclical area. Within that space, shares of discount retailers and retail specialty stores were the best performers. The retailing stocks, including Aeropostale (ARO), American Eagle (AEO), Coach (COH), and Gap (GPS), rose after a brokerage house issued a positive rating for the sector. Conversely, it was not a good day for those that own energy and basic materials stocks. Energy issues were weaker after oil prices fell sharply (down more than 4%) today on the New York Mercantile Exchange. Worries about a global economic slowdown after weak data earlier today from both Asia and Europe and weekly figures showing weak petroleum demand pressured oil prices. Such economic concerns have also weighed on the basic materials sector in recent sessions.

As noted, the global economic news was mixed today. In Asia, China's non-manufacturing index fell to a seven-month low and Australia's trade deficit widened. On the Continent, retail sales unexpectedly increased for a fourth month in August, as demand rebounded in Germany, Europe’s largest economy. The better-than-expected economic data were offset by concerns about Spain, whose Prime Minister Mariano Rajoy said has no plans to ask for a bailout soon, despite mounting speculation that a request was imminent. Back on these shores, the reports were encouraging as payroll processing giant Automatic Data Processing (ADP) reported that U.S. companies added more workers than projected in September and the Institute for Supply Management said that non-manufacturing activity perked up last month.

We also received some noteworthy news from the corporate world today. Struggling computer giant Hewlett-Packard (HPQ - Free Hewlett-Packard Stock Report) at an investor meeting said it earnings are now expected to fall by more than 10 percent next year, as CEO Meg Whitman struggles to fix a wide range of problems in a sluggish economy. Shares of HPQ, along with fellow blue-chips Alcoa (AA - Free Alcoa Stock Report), Chevron (CVX - Free Chevron Stock Report), and Exxon Mobil (XOM - Free Exxon Mobil Stock Report)—owing to the aforementioned weakness in the basic materials and energy sectors—weighed on the performance of the Dow-30 today, with HPQ shares tumbling more than 12% to a nine-year low.  We also learned that wireless telecommunications carrier MetroPCS (PCS) has agreed to be acquired by industry peer Deutsche Telekom (DTEGY), which owns T-Mobile. Shares of MetroPCS, which were higher yesterday after rumors surfaced about the possible combination of the two companies, fell back on the announcement.

Looking ahead to tomorrow, with economic news light on these shores, investors may take their cues from the overseas markets, where great attention will be paid to what the European Central Bank has to say following its latest meeting on monetary policy. The expectation is that the ECB is going to keep the key benchmark interest rate at 0.75%, as many euro zone nations are mired in recessions. Later in the session there could be some caution ahead of Friday morning’s Labor Department report on non-farm payrolls. – 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 got off to a rocky start this morning, but is now moving higher. At just past noon in New York, the Dow Jones Industrial Average is up 38 points (0.3%); the broader S&P 500 Index is ahead by about seven points (0.5%); and the NASDAQ, which is again showing leadership, is up 18 points (0.6%). The market’s breadth is now improving, as advancing stocks are ahead of decliners on the NYSE. There is strength in the transports, services, and consumer cyclical issues, offset by weakness in the basic materials and energy names.  Notably, the decline in the energy stocks is likely related to the sharp drop in oil today. Crude oil is off over 3% to roughly $89 per barrel. The move follows a disappointing weekly inventory report.

Technically, the S&P 500 Index has been firming up over the past few sessions.  But, the moves have been mild, and trading volumes have been relatively light. Traders, reluctant to make any big moves, may be waiting for the third-quarter earnings season to start up. Dow component Alcoa (AA Free Alcoa Stock Report), slated to release results on October 9th, kicks off the earnings parade. 

In Europe, the markets struggled at the open, but managed to recover. A handful of countries reported weak economic news, and that may have created some initial resistance.  Britain’s FTSE 100 closed up slightly, along with Germany’s DAX, but France’s CAC-40 was off a bit. While many traders are speculating about a possible bailout for Spain, officials there are not providing any details.

Meanwhile, the economic reports released on our shores have been constructive. According to Automatic Data Processing (ADP), the economy added 162,000 private sector jobs in September, which was better than the figure many had been expecting. Further, the ISM services index came in at 55.1 in September, just ahead of analysts’ forecast, and better than the August reading. Meanwhile, traders, already embracing the idea of more quantitative easing, are likely staying tuned for the release of the minutes from the FOMC’s September meeting.

The corporate reports released this morning were mixed. Family Dollar (FDO) shares are up after the retailer posted healthy results. In the small-cap area, Xyratex (XRTX) stock is off sharply after the UK based technology company issued weak results. Widely traded issues moving up include: Netflix (NFLX), Delta Airlines (DAL), and Sirius XM Radio (SIRI). Stocks moving lower include:  Metro PCS (PCS), Leap (LEAP), and Hewlett-Packard (HPQ Free Hewlett-Packard Stock Report).   - Adam Rosner 

At the time of this article's writing, the author had a position in Alcoa (AA).
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Stocks to Watch from The Survey Shares of MetroPCS (PCS) are trading slightly lower this morning, after reports surfaced that the wireless telecommunications carrier has agreed to be acquired by industry peer Deutsche Telekom (DTEGY), which owns T-Mobile. The news is not too surprising, and MetroPCS stock moved sharply higher yesterday after it was confirmed that executives of both companies were meeting to discuss a possible merger.

In earnings news, the stock of discount retailer Family Dollar Stores (FDO) is trading modestly higher in the premarket, as investors appeared pleased with the company’s August-quarter results. Wall Street was less enthusiastic with August-period financials from Monsanto (MON), however, and shares of the agricultural products company are trading moderately lower in the premarket. – 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 Open - Wall Street drifted lower yesterday in a listless session that featured modest moves in both directions, but mostly to the downside. The principal influences in this forgettable trading day were lingering concerns over uncertainty about a financial bailout for hardpressed Spain, worries ahead of the pending flood of third-quarter corporate earnings reports on our shores, and worries ahead of a series of late-week economic reports. Meanwhile, corporate earnings season will officially kick off next Tuesday when aluminum maker and Dow Jones Industrials component Alcoa (AA Free Alcoa Stock Report) issues its results for the July-through-September period after the market closes.

As noted, stocks meandered about on both sides of the ledger yesterday, but were mostly lower. Encouragingly, some last-minute buying by the bulls did manage to pare the once fairly sizable losses in the Dow to a modest 33 points. The Standard and Poor's 500 Index, off slightly for much of the day, managed to end the session nominally higher, while the NASDAQ, which was the strongest of the three indexes, ended the day higher by almost seven points.

The focus on Spain, the euro zone, the faltering business expansion at home, and next week's start of corporate reporting season was understandable given that economic news and releases over here were sparse yesterday, save for mixed metrics on the auto sales front. Things are changing today, however, as we have already gotten a first look at September's payroll situation, as Automatic Data Processing (ADP) has released its private-sector job-growth data for the last month. This release showed that 162,000 jobs were added during September. That was modestly above the expectations of 153,000 private-sector positions. This report is a prelude to the more closely watched government release on employment and unemployment, which is due out on Friday. The consensus expectation on that score is that 115,000 positions were created last month, while the jobless rate held at a disquieting 8.1%. Any notable deviation from the consensus forecast could cause a marked reaction in the equity and fixed-income markets.

Meanwhile, later this morning, the Institute for Supply Management will issue its monthly findings on non-manufacturing activity, a series that is especially closely tracked, and the companion report to the group's manufacturing data issuance released this past Monday. The bulls hope that this survey will provide a similar pleasant surprise. Readers will recall that on Monday, the ISM reported that manufacturing had jumped to a reading of 51.5 in September, thereby moving above the 50.0 separation between contraction and expansion and, in the process, breaking a three-month string of declining rates of activity in this economic category. Expectations are that non-manufacturing again ticked high last month, thus keeping a lengthy string of advances in place. Additionally, this afternoon, the Federal Reserve will issue the minutes from its last FOMC meeting. That report is also widely scrutinized.

Meanwhile, as we get ready for the new trading day this morning, we find that stocks in Europe, which earlier had been down, are trying to rally at this juncture and meeting with some modest success in Germany and Great Britain. As to our futures, after being mixed just a few minutes ago, they are picking up some speed, led higher, to the tune of two points in the Standard and Poor's 500 Index futures and by almost nine points in the NASDAQ futures, by the aforementioned better news from ADP, we surmise. The bulls apparently see this data as a prelude to some better news from the Labor Department on Friday. We shall see on that score. In the meantime, a recently range-bound stock market now seems poised to start the new session nicely to the upside when trading gets under way in less than an hour from now.   - Harvey S. Katz 

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