After the Close - Stocks put in a progressively weaker showing today after a hoped-for bounce following yesterday’s steep selloff failed to materialize, and equities closed at their lows for the session. Prior to the opening bell, it appeared that stocks would get a bit of a lift as investors looking to take advantage of lower prices might pick up a few bargains. Too, the morning’s economic news was constructive, with decent readings on weekly initial unemployment claims and the international trade deficit lifting traders’ spirits.

But sentiment began to sour when a report surfaced indicating that European Union ministers might delay steps to provide a financial-aid package to Greece. The bulls could not regain the upper hand once worries about Europe’s problems resurfaced.

Fanning the bearishness was word that Dow-30 component McDonald’s (MCD Free McDonald’s Stock Report) saw its monthly sales drop for the first time in almost 10 years. Shares of the hamburger chain turned in a sterling performance from early 2003 (when the last such drop was recorded), to the beginning of this year. Now, though, competition and challenging economic conditions are catching up to the company. The feeling is that, if sales at a global leader like McDonald’s are being pinched, there may be more distress to go around.

Concerns about the ability of a divided Congress to come up with a durable plan to avoid the dreaded “fiscal cliff” continued to weigh on stocks, too, as was the case Wednesday. 

At the close, the Dow Jones Industrial Average was down 121 points and the tech-heavy NASDAQ was off 42 points, or steeper on a percentage basis than the Dow. Shares of Apple (AAPL) continued their recent slide, dragging on tech issues. After topping $700 in September, Apple stock has dropped more than 20%, although the pullback could still prove temporary.

At the sector level, energy stocks did poorly, as oil prices dipped below $85 a barrel before rallying to close above that mark. Many oil-related issues, including Halliburton (HAL), are feeling the effects of lower oil prices, as the sluggish economy weighs on demand.

On the upside, utilities did relatively well, resuming their role as a refuge when other sectors are under pressure.

Tomorrow brings a couple of economic reports in the form of the University of Michigan consumer sentiment index, which is expected to rise slightly, and data on wholesale inventories, where a modest drop is projected. Friday’s trading may also be affected by an earnings release after today’s closing bell from Walt Disney (DIS Free Disney Stock Report). The entertainment giant is expected to put in a solid showing to close out its fiscal year.  - Robert Mitkowski

At the time of this writing, the author did not have positions in any of the stocks mentioned.      


12:40 EST - The U.S. stock market got off to a decent start this morning, but ultimately could not sustain the attempt at a rebound following yesterday’s sharp retreat, and is now heading lower. As we pass the noon hour in New York, the Dow Jones Industrial Average is off 37 points (-0.3%); the broader S&P 500 Index is down six points (-0.4%); and the tech-heavy NASDAQ is lower by 15 points (-0.5%). Market breadth indicates some weakness, as declining stocks are slightly outnumbering advancers on the NYSE. Almost all of the major market sectors are in negative territory, led lower by the energy and capital goods stocks. In contrast, the utilities are having a good day. Technically, the S&P 500 Index is now testing near its 200-day moving average located at 1,380. Meanwhile, the Dow Jones Industrial Average has already fallen past this technical level. As for sentiment, the VIX is trading a bit lower today possibly suggesting that investors may be feeling less panicky than yesterday when the Dow fell 313 points.

The economic releases here in the U.S. were somewhat upbeat. The employment situation still seems to be making progress. Initial jobless claims for the week ended November 3rd, came in at 355,000, which was 10,000 lower than most analysts had expected, and an improvement over the 363,000 claims posted in the prior week. There was a better reading on weekly continuing jobless claims too, which is always encouraging. Elsewhere, investors received some good news on the trade front as the deficit narrowed to $41.5 in September, which also was less than had been forecast. Tomorrow, we get a look at the role the consumer may be playing in the broader economy, as the University of Michigan will release its figures for November. 

Even though it is a bit late, we are still getting some third-quarter corporate reports. Today, we heard from Qualcomm (QCOM). That stock is trading higher on a strong report. Monster Worldwide (MWW) shares are also higher, after the Internet company posted better-than-expected results. However, in technology, Universal Display (PANL) is seeing its stock sink on a weak report.

Overseas, Asia’s markets fell sharply overnight. However, this was likely a delayed reaction to the sharp selloff in the U.S. yesterday. In Europe, the bourses started out with some gains, which possibly reflected news that Greece may be finally making progress with its financial situation. However, the markets in Europe ultimately could not hold their gains, and are closing in negative territory. - 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 Earnings reports are still trickling in. One of today’s big winners appears to be telecommunications equipment company Qualcomm Inc. (QCOM). Indeed, that stock is trading sharply higher in the premarket after management reported solid September-period results and issued an upbeat outlook. Other stocks moving notably higher on earnings news include Dean Foods (DF), a leading manufacturer and distributer of milk and dairy products, videogame developer Activision Blizzard (ATVI), and online job board Monster Worldwide (MWW).

On the other hand, shares of grocery store Whole Foods Market (WFM), retailer Kohl’s (KSS), and energy drink maker Monster Beverage (MNST) are all indicating lower openings this morning (especially MNST), as investors did not appear impressed with quarterly results from those companies. – Matthew E. Spencer, CFA

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

Before The Bell - Stocks tumbled along a broad front yesterday, succumbing to their biggest one-day loss of the year thus far. There seems to be two explanations for this latest drop, which included a 313-point plunge in the Dow Jones Industrial Average and a 75-point setback in the tech-heavy NASDAQ.

First, there was a dour assessment of the situation in Europe from European Central Bank President Mario Draghi, in which he said that the proliferating crisis in the beleaguered euro zone would have an impact on Germany, the region's biggest and strongest economic power. A decline in industrial output in that country in September underscores that concern. Then, closer to home, the conclusion of the Presidential Election the day before put the focus right back on the dreaded "fiscal cliff'' that awaits this country by yearend. That potential crisis, in which mandated tax hikes and spending cuts are due to kick in unless Congress forestalls this event, could severely constrain the still somewhat fragile economic up cycle. To be sure, both sides appear in a bit more of a compromising mood following and an election that really changed very little. But reassuring words, however possibly well intentioned, will not defuse a looming crisis by themselves.

In addition to the aggregate market, bank stocks took a pounding, suffering their worst decline of 2012, while crude oil prices plunged by nearly 5%, bringing a barrel of oil down to the low end of its range thus far this year. The signal sent by the financial markets yesterday was that Washington had better strike a deal--and soon. The market's behavior is interesting and instructive. For example, after seemingly ignoring the so-called fiscal cliff for months, as stocks marched relentlessly higher in September and during the first part of October, and then stepped up nicely on Election Day, as the Dow climbed by better than 130 points, Wall Street suddenly came back to reality. It could not have been that the election result was a shocker, as President Obama had been slightly favored according to most pollsters, while the returns changed little in the House, where the Republicans held their majority with little change, while the Democrats added just slightly to their edge in the Senate. So what was it that would change sentiment so dramatically in just a day? One explanation is that if Washington does nothing to stem the out-of-control budget deficit via a combination of reasonable tax increases and spending cuts, there is risk that our credit rating could undergo a downgrade. That would be a serious event, as it would make further government borrowing more expensive, among other things. 

Meanwhile, the world outside the Beltway goes on, and this morning we have just received word that jobless claims ticked down nicely in the latest week. A small increase had been the consensus forecast. At the same time, it was reported that the nation's trade deficit fell notably in September, dropping from August's downwardly revised $43.8 billion to $41.6 billion in September. Expectations had been that the trade gap would have increased to just over $45 billion. This better news, however, has done little to perk up the equity futures, which retain their modest upward bias so far today. In fact, with about a half hour to go before the start of the new trading day, the futures are suggesting that we will undergo some bargain hunting at the outset of trading. However, the problems remain, and while we are positive on equities for the next six months, or so, the very short term could see further, sizable volatility until Washington shows signs of being ready to compromise. – Harvey S. Katz

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