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After The Close - The U.S. stock market was largely directionless today, with just a nominal negative bias. At the close of the session, the Dow Jones Industrial Average was up slightly; the broader S&P 500 Index lost four points (-0.3%); and the NASDAQ  was down five points (-0.2%). Market breadth was slightly bearish, as declining stocks outnumbered advancers on the NYSE. This uninspiring showing was also apparent in the various market sectors. The transportation and technology names advanced, slightly, while the basic materials and financials slipped into negative territory.

Technically, the S&P 500 Index is currently testing its 50-day moving average, located at 1,428. After the sharp, but choppy, runup that started over the summer, some consolidation is likely warranted. Luckily for the bulls, we have not yet seen a real bout of profit taking for some time, and it seems that traders are still committed to the rally, at least for now. The market direction over the next couple of weeks, or so, will probably depend on the corporate earnings outlook, which will be better defined as the leading companies report third-quarter results. Also, the news from Europe, which continues to grapple with its financial issues, will also likely still be playing a role.

Meanwhile, earnings season is now picking up. Today, some large banks were in the spotlight. Specifically, JP Morgan Chase (JPM - Free JPMorgan Stock Report) shares headed lower, even though the company posted decent profits. Analysts may be concerned about credit quality. Further, Wells Fargo (WFC) saw its stock slip, on a mixed report. In the technology sector, Advanced Micro Devices (AMD) reduced its top-line outlook, sending that low-priced issue sharply lower. In the transportation area, JB Hunt (JBHT) put out positive results, sending those shares higher. While it is still early to tell if this earnings season will be a disappointment, we have seen some negative pre-announcements, and this may be a harbinger of things to come.

Elsewhere, a decent batch of economic news may have provided some support for equities. Specifically, the consumer is feeling a bit better about the economy. The University of Michigan’s consumer sentiment report came in with a reading of 83.1 for the month of October, which was better than analysts had been expecting, and an improvement from the 78.3 figure logged in September. There is also little sign of inflation. The Producer Price Index (PPI) rose 1.1% in September, but the core reading, which excludes food and energy prices, was unchanged. - Adam Rosner

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

12:30 PM ET - As we pass the midday hour on the East Coast, the U.S. equity market is moving lower after spending a good portion of the morning in positive territory. The Dow Jones Industrial Average, the NASDAQ, and the broader S&P 500 Index, which were all up for a while helped by a positive report on the U.S. economy (more below), are now all modestly lower. Trading is showing that investors are expressing some concerns about today’s earnings reports, none of which was strong enough to change the growing perception on Wall Street that this earnings season may be a bit on the disappointing side, with comparisons becoming tougher. The spread between advancing and declining issues, which was razor thin for most of the morning, has now widened in favor of the latter on both the Big Board and the NASDAQ, as selective selling has picked up.

The good economic report that we are alluding too came from the University of Michigan, which showed that consumer sentiment for October came in at 83.1. The latest figure was comfortably above the consensus expectation of 78.3 and marked the highest level since September, 2007. This report, coupled with a rather tame reading on core producer (wholesale) prices—which excludes the volatile food and energy components)—was a positive sign for a U.S. economy that is growing at a rather pedestrian pace in recent quarters. The two upbeat reports also come ahead of the fast-approaching all-important holiday shopping season, which could be a good sign for retailers and the services sector. 

Nevertheless, it seems that investors are now electing to focus on the earnings news, which while far from uplifting, we would still term decent. Banking giants JPMorgan Chase (JPM - Free JPMorgan Chase Stock Report) and Wells Fargo (WFC) both delivered solid performances and posted better-than-expected earnings. However, investors did not seem enthused with either report. Stocks of both banks, particularly Wells Fargo, which missed expectations on the top line, are trading lower thus far today. Not surprisingly, given the weakness in the aforementioned stocks, the financial sector is among the laggards today. We also got some disappointing news from the technology group. Advanced Micro Devices (AMD) and Infosys (INFY) are lower after reporting quarterly results. Conversely, trucking company J.B. Hunt’s (JBHT) latest results pleased investors, and is providing some mild support to the transportation sector today. 

Elsewhere, the European bourses are lower as trading approaches the final minutes on the Continent. Continued concerns about the lingering sovereign-debt problems are casting a cloud over the European equity markets—trading on the Continent produced losses in four of the five trading sessions this week. In particular, reports have surfaced that the possible hold up in financially struggling Spain accepting a bailout plan may be due to a perceived a lack of transparency from the European Central Bank regarding possible contingencies. Whatever the final outcome may be, the recent uncertainty has renewed concerns about the European Union’s ability to tackle the sizable debt problems in the euro zone.   

Turning back to the U.S., the aforementioned positive U.S. economic news aside, most of the major sectors tied to the global economy are weaker on fears of a continued slowdown in Europe and Asia, particularly in China. In addition to the aforementioned weakness of financial stocks, the basic materials, capital goods, and energy groups are struggling today.   - 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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Stocks to Watch from The SurveyInvestors have received earnings reports from two of the nation’s largest banks this morning, JPMorgan Chase (JPMFree JPMorgan Chase Stock Report) and Wells Fargo (WFC). While both companies turned in solid performances and delivered better-than-expected earnings, investors did not appear enthused with either report, and both stocks are indicating lower openings this morning, after some earlier strength, with WFC shares selling off more than JPM stock.

In other earnings news, the stock of Advanced Micro Devices (AMD) is trading sharply lower in the premarket, after the semiconductor company announced preliminary third-quarter results that fell short of investors’ expectations, citing lackluster demand across all of its product lines. That stock is likely to open at a 52-week low. Likewise, shares of Infosys (INFY) are indicating a notably lower opening, after the technology outsourcing company reported September-quarter results and updated its outlook. On the bright side, trucking company J.B. Hunt (JBHT) has reported third-quarter results that pleased investors, and that stock is up nicely in pre-market trading.

Elsewhere, shares of STMicroelectronics (STM) are indicating a sharply higher opening, on news that the semiconductor company may split itself up in the coming months. – 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 - The stock market surged early yesterday morning in a notable attempt to reverse the sizable back-to-back selloffs that took place on Tuesday and Wednesday. And for part of the session, the bulls appeared to be succeeding, in large part on a favorable report from the Labor Department on first-time jobless claims. Specifically, that key and closely watched metric showed that new layoffs totaled 339,000 in the latest seven-day stretch--some 30,000 below expectations and by a similar margin under the week-earlier total. In all, the latest figure was a multi-year low and gives some weight to the prior week's release on the unemployment rate for September. That figure had come in at 7.8%, a four-year low, and a marked reduction form August's 8.1% rate.

Elsewhere, the Commerce Department issued largely in-line figures on the international trade deficit, with that number coming in just over $44 billion for August. Expectations, as noted, had been in that range, with the trade gap widening somewhat from July, largely on rising energy costs, as a barrel of imported oil rose modestly for the month. However, it was the jobless claims figure, rather than the trade data, that sparked the short-lived attempt by the bulls to put the ship on a firmer course.

All told, following this early rally, the Dow closed off by another 19 points. However, the rest of the market had more of a neutral look, as the NASDAQ shed just two points and the Standard and Poor's 500 Index closed up by a quarter of a point. Gaining stocks, meantime, held a healthy two-to-one advantage over losing issues on the Big Board. The positive plurality on the NASDAQ was some three-to-two. This clearly favorable market breadth was underscored by solid gains in the small-and-mid-cap indexes, notably the small-cap Russell 2000 Composite and the Standard and Poor's Mid-Cap 400 Index.

Shaking the market's bullishness, meanwhile, is a general malaise overseas, where the recession, now apparently covering much of Europe, seems to be selectively deepening, while growth is slowing across wide swaths of Asia. And over here, while the economy continues to press forward at a slow pace, with a recession now unlikely, the pessimism on the earnings front is starting to build. as we get deeper into the nascent third-quarter profit reporting season. So far, the news is mixed. Specifically, Alcoa (AAFree Alcoa Stock Report) failed to overwhelm investors with its tepid profit results; Chevron (CVXFree Chevron Stock Report) warned of weakening metrics; but this morning banking giant and fellow Dow-30 component JPMorgan Chase (JPMFree JPMorgan Stock Report) came in with solid results. The JPMorgan earnings beat is now putting some strength into the equity futures, which are showing gains of nearly five points on the S&P and six points on the NASDAQ. However, there appear to be few indications that the anticipated slight early gains in JPMorgan shares are translating to prospective strength  for other financials, with the shares of Bank of America (BACFree BofA Stock Report) and Citigroup implying slightly lower openings when trading gets under way in about a half hour from now.

As to the day ahead, the Labor Department has just issued data showing that the Producer Price Index jumped by 1.1% on modestly  higher prices for food and sharply higher costs of energy. However, backing out these volatile variables, the data show an unchanged reading for the so-called core PPI. So, the initial verdict seeming to be a non-event, with the futures showing little movement on this issuance. – Harvey S. Katz

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