After the Close - The bulls and bears fought to a split decision on Wall Street today, with the former having the upper hand in the mostly blue-chip Dow Jones Industrial Average and the latter ruling the roost on the NASDAQ.

At the close, the Dow had gained 46 points but the NASDAQ had given up 23 points. In terms of market breadth, there was a slight edge in the number of advancing stocks versus decliners both on both of those major exchanges. However, underscoring the market’s recent advance, several hundred stock hit fresh 52-week highs, while only a dozen or so hit new lows on the Big Board. 

The NASDAQ’s slide was caused by a significant drop in Apple (AAPL) shares. Signs of slowing growth in iPhone and iPad sales caused the stock to fall 12%, to $450 a share, a far cry from the $700 topped in the fall.

Still, there was enough positive economic news, both from the United States and China, to keep intact a measure of the sentiment that has lifted the Dow and the S&P 500 to multiyear highs. Specifically, weekly initial jobless claims sank to a five-year low, the nation’s leading economic indicators rose in December, and a manufacturing index in China rose for the third consecutive month.

The good news on the economy is music to investors’ ears, coming as it does in key areas, such as jobs, housing, and manufacturing, and may rekindle the general public’s interest in stocks, particularly if the major averages were to push on to new highs.

Given the day’s good news on employment, stocks of retailers did especially well. Shares of Dollar General (DG), Dollar Tree (DLTR), J.C. Penney (JCP), and Bed, Bath and Beyond (BBBY) all enjoyed nice percentage moves. Transportation stocks such as railroader CSX Corp. (CSX) also did well.

Elsewhere, shares of Netflix (NFLX) were the day’s brightest star, rising an eye-popping 42%, as investors cheered the company’s earnings surprise in a big way.

Tomorrow brings a fresh batch of earnings news from major companies, such as oilfield services provider Halliburton (HAL), diversified manufacturer Honeywell (HON), household products maker Kimberly-Clark (KMB), and consumer products giant and Dow-30 componenet Procter & Gamble (PG Free P&G Stock Report).

Also on tap is a report, due out at 10:00 A.M. EST on new-home sales for December, which is expected to show a rise from November. A good showing there, as well as from the earnings releases noted above, would provide stocks with a firm foundation for trading on Friday.  - Robert Mitkowski

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


12:30 PM EST - The U.S. stock market is moving higher, on balance, so far today. As we pass the noon hour in New York, the Dow Jones Industrial Average is up 78 points (0.6%); the S&P 500 Index is ahead five points (0.2%); but the tech-heavy NASDAQ, which is now well off its lows, is off six points (-0.2%). Market breadth is positive, with advancing stocks ahead of declines by about 2 to 1 on the NYSE. These figures are also favorable on the NASDAQ, which is encouraging. Almost all of the market sectors are moving higher, with strength in the consumer cyclical and transportation issues. However, the technology sector is lagging.

Technically, the S&P 500 Index has broken the 1,500 mark, as it moves to a new high. Sentiment remains extremely bullish, as measured by the low readings on the VIX. Although the market looks “overbought” by some measures, the up move seems to be continuing, at least for now. Importantly, the market may be getting an extra boost from the earnings announcements coming out. It remains to be seen whether this strength will continue, after the earnings season winds down.

Meanwhile, there was some constructive economic news put out this morning. The nation’s employment situation seems to be on the mend. Specifically, initial jobless claims for the week ended January 19th declined to 330,000, coming in decidedly lower than the roughly 355,000 forecast by analysts. The weekly continuing claims data also showed improvement. And, in the general economy, the Conference Board’s Leading Indicators Index increased 0.5% for December, matching analyst expectations. Tomorrow, we get a look at the housing market, as new home sales for December are due out.

Traders are largely concentrating on the fourth-quarter earnings season, with technology heavyweight Apple Computer in the news. Apple (AAPL) stock is off sharply, as analysts were disappointed with the company’s quarterly results. However, this was partially offset by good news from Netflix (NFLX). That stock is soaring almost 40%, after the movie rental company posted strong results. In the Dow, we heard from 3M (MMM - Free 3M Stock Report). That issue is largely unchanged even though the company put out a decent earnings release. Tonight, we hear from Dow component Microsoft (MSFT - Free Microsoft Stock Report).

Stocks moving higher today include: Swift Transportation (SWFT), Xerox (XRX), and Research in Motion (RIMM). Issues headed lower include: Nokia (NOK), which suspended its dividend, Key Corp (KEY), and Altera (ALTR). - 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 We are getting into the heart of earnings season and the releases are coming out fast and furious. It is unlikely that any report this quarter will garner more attention than the one computer and personal electronics giant Apple (AAPL) released after the market closed yesterday. The stock is down sharply in the premarket, after the company reported flat profits in the December period and indicated that sales growth was slowing in the current interim. Other stocks showing substantial weakness in the premarket on earnings news include semiconductor company Mellanox Technologies (MLNX), which reported fourth-quarter results and issued a disappointing outlook, and Nokia (NOK). In addition to reporting December-quarter data, the cellular phone manufacturer suspended its dividend. Elsewhere, diversified manufacturer 3M’s (MMMFree 3M Stock Report) in-line fourth-quarter financials were met by a yawn in pre-market trading, at that stock is down just slightly ahead of the bell.

Shares of Netflix (NFLX) appear to be today’s big winner, and are skyrocketing in the premarket after the provider of entertainment and video content delivered a blowout quarter that included a surprise profit and strong subscriber growth. Shares of airline operator Southwest (LUV) and office equipment manufacturer Xerox (XRX) are indicating slightly higher openings on earnings news, as well. – 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 - Stocks pressed higher once again yesterday in what continues to be a strongly bullish first month of the year. The latest dose of good cheer, which led to a 67-point gain in the Dow Jones Industrial Average, but lesser increases in the other principal indexes, was largely the result of a stellar fourth-quarter performance from tech giant International Business Machines (IBM - Free IBM Stock Report). The software and computer services icon lifted its aggregate earnings and turned in a stalwart job on the international front during the period. And Wall Street loved it, with that earnings issuance helping the stock to an $8.64-a-share gain, an advance of 4.4%.

IBM wasn't the only high-profile issue to do well yesterday, though. So, too did Internet search engine Google (GOOG), whose shares jumped 39 points, or 5.5% on better results. The gains in IBM and Google, meanwhile, accounted for just about all of the pickup in the Dow and the NASDAQ, respectively, yesterday. Another winner on the day was Cree (CREE), with that semiconductor maker countering what has been a less-than-eye catching reporting period for the chipmakers, with a 69% surge in fiscal second-quarter net. Cree shares, in response, jumped by more than $7 on the day, a gain of better than 22%. On the other hand, luxury-handbag and leather goods maker Coach (COH) found the going a lot rougher, as that widely followed retail outfit, suffering from a weak Christmas shopping performance, saw its share tumble by nearly 10 points, or 16.4%.

Of course, earnings weren't all that was driving stocks yesterday. The other big factor was the political situation in Washington, where the House has passed a three-month extension of the debt ceiling. That move, which will avert the possibility of a default in this country--until at least the spring--likewise helped to underpin the latest rally, which now has seen the Dow gain ground in nine of the past 10 sessions.

And earnings will again be on the minds of investors this morning, most notably because erstwhile tech darling Apple (AAPL) posted its latest results after the close of trading yesterday. And to say that this report, albeit decent, dampened enthusiasm for these high-priced shares would be an understatement. Specifically, the computer maker inked flat earnings and expressed some caution going forward. That news hit like a ton of bricks, as that issue, which closed at $514 a share in the regular session, fell almost 9% in after-hours trading. Now, this morning, the stock is indicating an opening in the range of $460 a share.

The Apple disappointment, meanwhile, is weighing heavily on the NASDAQ futures, which are now off by more than 38 points, with about a half hour to go before the start of the new trading day. The showings in the Dow and the S&P 500 futures are much more muted, by comparison. In all, we would expect to see a somewhat weaker start to the trading day, although with earnings continuing to come in generally better than expected, any softness is likely to be contained, and even, perhaps, reversed over the course of the trading day.   - Harvey S. Katz

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