After The Close - After a historic two-day closure of the U.S. equity market, the first such weather-related shutdown of more than one day's duration since 1888—due to Hurricane Sandy pounding the East Coast of the United States—trading resumed today on Wall Street. The major U.S. equity indexes started off on a positive note then traded in the red for most of session before some selective late-day buying left the Dow Jones Industrial Average off just nominally and the S&P 500 Index relatively unchanged for the day. However, the tech-heavy NASDAQ was unable to overcome continued weakness in technology sector, and finished lower by almost 11 points. Overall, there seemed to be a lack of conviction on the part of investors, as reflected in the narrow spread between decliners and advancers on both the Big Board and the NASDAQ. Mixed news on the earnings front (more below) and some likely hesitation ahead the upcoming jobs report (due Friday) and next week’s Presidential Election may be keeping investors from making a sizable move in either direction. Still, a number of the 10 major sectors finished the session in positive territory, with the notable exceptions being technology and healthcare. 

Today’s mixed session capped off what was a down month for those long equities. In October, all of the aforementioned indexes finished lower, headlined by a more-than-4% drop in the NASDAQ. The tech-heavy index succumbed to some weak earnings news from the technology sector. Just today, the stock of Seagate Technology (STX) was the latest tech issue to slip on disappointing earnings and weaker guidance. A poor showing from technology behemoth Apple (AAPL) over the last 30 days was also at the heart of the NASDAQ’s struggles. Meantime, the Dow 30 (down around 2.5%) and the S&P 500 Index (off nearly 2.0%) finished lower, with the latter decline highlighting the overall weakness of the broader market.

Meanwhile, earnings news was heavy today. In addition to the aforementioned dour report from Seagate Technology, shares of Western Union (WU) tumbled after the payment services provider reported disappointing quarterly results. The stocks of steelmakers Arcelor Mittal (MT) and U.S. Steel (X), and healthcare provider Wellcare Health Plans (WCG) were also under pressure today after both companies reported disappointing results. Conversely, shares of credit card giant Mastercard (MA) moved higher after the company beat expectations. Video game makers Take-Two Interactive (TTWO) and Electronic Arts (EA) were up, too, after the latter beat earnings expectations and the former said it will unveil its latest edition of its signature Grand Theft Auto video game in the spring. The release is expected to boost Take-Two’s earnings next year. 

However, in this slightly bearish market, there was some selective buying in a few areas, particularly in those sectors likely to benefit from the rebuilding to take place following the devastation of Hurricane Sandy. Home improvement retailers The Home Depot (HD - Free Home Depot Stock Report) and Lowe’s Companies (LOW) got a nice boost from the Sandy fallout. Building materials suppliers Fastenal (FAST), Owens Corning (OC), and Eagle Materials (EXP) were also up on expectations that demand will pick up as the East Coast begins to rebuild. Meantime, auto stocks did well after General Motors (GM) followed yesterday’s strong earnings results from Ford Motor (F) with good news of its own today.

There were also some non-earnings driven news from Corporate America. Shares of Warnaco Group (WRC) jumped after the company agreed to be acquired by PVH Corp. (PVH) in a cash-and-stock deal valued at $2.9 billion. Shares of Facebook (FB) sold off after the expiration of the lockup period. Moving forward, company employees will be able to sell shares (about 229 million) of the social media company if they choose to. Meanwhile, shares of Netflix (NFLX) surged after it was revealed that active investor Carl Icahn has taken a nearly 10% stake in the struggling company. 

Elsewhere, it was a positive day for the commodities markets. The price of the most closely watched commodity oil rose on concerns about crude supplies after Hurricane Sandy wreaked havoc on the Northeast. Similarly, gasoline futures were higher on the concerns. It was also a good day for those who held contracts for lumber, corn, soybeans, wheat, and silver. The weakness in the U.S. dollar (it was down versus the euro and the British pound today) made commodities more attractively priced in overseas markets and probably had a lot to do with today’s upswing in the group.

Looking ahead to the remainder of this abbreviated week on Wall Street, earnings news, along with the latest reports on employment—Automatic Processing Data’s (ADP) report on private-sector payroll creation is due tomorrow and Friday will bring the government’s report on non-farm payrolls—is likely to drive trading over the next few days. We would also not be surprised if no big moves in either direction--similar to today’s action--were made ahead of next week’s Presidential Election.   - William G. Ferguson

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 – Wall Street is scheduled to reopen today, though volumes may be unpredictable as traders struggle with New York City’s crippled transportation system and disruptions to telecommunications services. Regardless, earnings season rolls on, with notable companies like automaker General Motors (GM), global payments company MasterCard (MA), and household products manufacturer Clorox (CLX) reporting quarterly financial data before the opening bell. GM stock is indicating a nicely higher opening this morning, while MasterCard shares are little changed and CLX is trading moderately lower in the premarket.

There is also some M&A news to be aware of. Entertainment giant and Dow-30 component Disney (DIS) has agreed to purchase Lucasfilm, which produced the Star Wars franchise, for just over $4 billion. Disney shares are trading higher has a result. On the other hand, the stock of telecommunications equipment company Riverbed Technologies (RVBD) is trading notably lower in the premarket, after it announced plans to pay about $1 billion to acquire Opnet Technologies, a company that makes software to manage network traffic. – 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 is scheduled to re-open within the next half hour, following a historic two-day weather-related shutdown due to the ravages of Hurricane Sandy along the East Coast. And, the futures are suggesting that the market will open to the upside.

Meanwhile, the market's two-day shutdown was the longest weather-related interruption in trading since 1888 when the long-noted blizzard of that year closed the markets for even longer. More important, the economy is taking a major blow from this tragic event, with estimates suggesting that GDP could take a 0.3% to 0.5%, or more, hit initially from the hurricane. To be sure, much of this will be made up from subsequent rebuilding, but these are just numbers, as the human costs can never be measured nor, in some tragic cases, ever made up. Our hearts go out to those victims and to their families. Our prayers are with them.

As for individual companies, Ford (F) reported quarterly results that easily beat expectations and that stock is indicated somewhat higher in the pre-market this morning. Some also are speculating that Dow-30 component, Home Depot (HD - Free Home Depot Stock Report), will be a beneficiary of the storm, as rebuilding takes hold over the next few months. That blue chip is indicated strongly higher, as well this morning. On the other hand, steelmaking giant U.S. Steel (X) posted better-than-expected third-quarter results, but cautioned ahead of the fourth quarter, and that stock is showing no positive early trend.

As for the economy, data issued yesterday showed that the long-ailing housing market is continuing to recover, with a report out noting that home-price increases accelerated in August. Meantime, later on this morning, we are due to get the latest findings from the Chicago-area purchasing managers regarding manufacturing activity in the Midwest locale. Then, tomorrow, we should be getting surveys on weekly jobless claims, productivity, auto sales, and manufacturing across the nation. All of that is a prelude to Friday's scheduled issuance on non-farm payrolls and the unemployment rate for October. Expectations are that the nation added some 120,000 jobs during the now-ending month, while the unemployment rate is expected to have stayed level at 7.8%. Importantly, this is the last employment report before next Tuesday's scheduled election.

Overall, then, it should be a decent opening for the stock market, at least that is the early indication. Our sense is that it will be a volatile day, with plenty of volume, and perhaps delayed trades. Our country has been through a difficult few days, but we have rallied before. We expect that to be the case again this time. Americans always stick together and fight together no matter how severe the blow and how trying the times.

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