After The Close - It was a mixed showing for equities during the middle day of the trading week, highlighted by the divergent paths the Dow Jones Industrial Average and the NASDAQ indexes took over the course of the session. The Dow 30 finished 0.3% lower, while the tech-heavy NASDAQ was able to eke out a modest gain. Meanwhile, the broader S&P 500 Index was relatively unchanged at the closing bell. Overall, advancing issues finished ahead of decliners on both the Big Board and the NASDAQ.

From a sector perspective, there was a strong showing today from the conglomerates, which got a boost from shares of General Electric (GE - Free General Electric Stock Reprot) and Siemens AG (SI). General Electric stock jumped after news surfaced that the diversified giant plans to sell its remaining stake in NBC Universal, a move that executives said should allow it to achieve its long-held goal of buying back the shares it issued during the depths of the financial crisis. All told, GE expects to return about $18 billion to shareholders. Likewise, investors viewed the deal favorably for Comcast (CMCSA) and bid the cable giant’s stock higher. Investors should also note that Dow-30 component Cisco Systems (CSCO - Free Cisco Stock Report) was scheduled to report its quarterly results after today’s close.

Speaking of the Dow 30, the aforementioned good showing by GE was not enough to keep the index of 30 bellwether companies out of the red today, which was weighed down by a poor performance from McDonald’s (MCD - Free McDonald's Stock Report) stock. Shares of the fast-food giant fell after President Obama pushed for a hike in the federal wage minimum in his State of the Union address last night. The higher wages would likely push McDonald’s operating expenses higher and hurt margins. This, along with an uninspiring report on retail sales (see below) also weighed on consumer cyclical stocks. There was also some profit taking in financial issues, which have been on a notable run of late.  Meanwhile, on an individual basis, shares of Cliff Natural Resources (CLF) tumbled after the biggest U.S. iron ore producer slashed its quarterly dividend by 76% and announced an equity offering to repay debt.

In addition to the aforementioned news from Corporate America, investors also received a key piece of U.S. economic data this morning. At 8:30 A.M. (EST), the Commerce Department said retail sales inched forward by just 0.1% in January—a nominal gain that had been the consensus forecast. By comparison, that metric had climbed by 0.5% in December. The year-to-year increase, however, was a more formidable 4.4%. This latest data should not change the overall expectation of modest economic expansion in the opening three months of 2013. If anything, we think the retail sales report had a slightly negative impact on trading in the latest session. However, the next few reports on retail sales should be even more carefully scrutinized, as investors believe those reports will be a good gauge as to what effect the recent payroll tax hikes are having on the consumer.     

Meantime, investors continue to show disdain for fixed-income securities.  In fact, the Treasury Department sold $24 billion in 10-year Treasury notes at 2.046% today, the highest yield at a 10-year auction since March. (Yields move inversely to prices.) Too, short positions in Treasuries reached the highest level in 20 months today, an indication that investors expect prices to fall further. Such data are yet another indication that investors still see equities as the more attractive option than bonds right now for their funds, even with the equity market clearly overbought at the moment. The S&P 500 Volatility Index (or VIX) ended the day slightly above 13, a level that would suggest the buying is overheated.   - William G. Ferguson 

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


12:30 PM EST - The U.S. stock market has been mixed this morning, as traders digest the latest corporate and economic reports. Today’s earnings releases were generally positive. Among the large names, Deere (DE) put out a decentreport, but that stock is down nonetheless.  Also, Comcast (CMCSA) posted strong quarterly profits and issued positive news. Conversely, things did not go as well for Cliff’s Natural Resources (CLF). That issue is sinking after the basic materials producer issued a weak report. Meanwhile, some actively traded stocks posting big advances today include: General Electric (GE Free GE Stock Report), Groupon (GRPN), and DryShips (DRYS). Stocks moving lower include:  BlackBerry (BBRY), and Rackspace Hosting (RAX). 

The economic news is probably not moving the markets too much today, one way or the other. Specifically, retail sales rose 0.1% in January, essentially matching analyst forecasts. Retail sales excluding the automotive component also held up well for the month. Tomorrow, the employment situation will be back in the spotlight, with the release of the weekly initial and continuing jobless claims data. That report is always widely watched.

As we pass the noon hour in New York, the markets are losing some ground. The Dow Jones Industrial Average is off 46 points (-0.3%); the S&P 500 Index is up slightly; and the tech-heavy NASDAQ, which was leading the market higher, has pulled back, and is now ahead four points (0.1%). Market breadth is somewhat favorable, as advancing stocks are just ahead of decliners on the NYSE. The market sectors show a mixed market, too. There is strength in the conglomerates, basic material, and transportation issues.  However, the consumer cyclical stocks are leading the market lower, and there is now some weakness in the technology names.

Technically, the S&P 500 Index has been moving sideways over the past several sessions, while managing to stay above the above the 1,500 mark. The market may be in need of a rest, after the large run staged over the past few month. Stocks are no longer inexpensive, as measured by the market’s median price to earnings multiple. Further, there has been little profit taking, and that may be causing some concern among traders. The VIX is up 4% to just over 13. However, it should be noted that this is still a low reading.  - 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 continue to roll in today, many of which have disappointed investors. Shares of restaurant operator Buffalo Wild Wings (BWLD), fresh milk and dairy product manufacturer and distributor Dean Foods (DF), money transfer processor Western Union (WU), e-commerce outfit Rackspace Hosting (RAX), and mining company Cliffs Natural Resources (CLF) are all trading lower in the premarket on earnings news. The stock of farm and heavy equipment manufacturer Deere & Co. (DE) is down just slightly ahead of the bell, despite a generally positive January-quarter report.

Elsewhere, in addition to releasing fourth-quarter financials, cable television operator Comcast Corp. (CMCSA) has agreed to purchase the 49% stake in entertainment company NBCUniversal that it does not already own from industrial conglomerate and Dow-30 component General Electric (GEFree General Electric Stock Report) for a total of $18.1 billion (which includes related real estate). Both stocks are trading higher in the premarket, with Comcast shares showing greater strength. – 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 stock market rolled ahead yesterday, eclipsing the 14,000 mark on the Dow Jones Industrial Average for the second time in less than a fortnight. And, like its prior surge above that notable plateau, it managed to end the session at better than 14,000. The bulls, meanwhile, hope that the Dow's stay above that mark will be longer than it was earlier this month, when stocks fell back sharply in the next session, and have been struggling to mount a new charge above 14,000 ever since. In all, the blue-chip composite added 47 points yesterday, to end matters at 14,018.70.

Meantime, the Dow was not the only index to evidence strength yesterday, as the Standard and Poor's 500 Index, a two-point winner on the day, climbed further above 1,500, while the NASDAQ chipped in with a gain of six points, leaving that tech-laden composite ever-closer to 3,200. Helping the market in the latest session was a further rally in the financial stocks, led by shares of Citigroup (C), the heretofore ailing banking behemoth. That stock jumped by nearly 3%, or $1.20 a share. Also doing better was Avon Products (AVP), with that maker of cosmetics seeing its shares gain sharply on better earnings from continuing operations. Things were not as rosy at tech icon Apple (AAPL), with that high-priced issue falling another 12 points. Apple shares, once above $700, now are passing hands at less than $468.

Overall, Wall Street rose in the latest session in spite of the fact that the markets were somewhat skittish ahead of last night's State of the Union address by President Obama. Reaction to that speech was generally muted, notwithstanding the expected political back and forth. However, the equity futures are gaining nicely after a mixed indication several hours ago, as the S&P 500 Index futures are ahead by three points and the NASDAQ futures are better by more than eight points. This would seem to presage a nice start to the trading day, when it commences in less than an hour from now.

As to the day ahead, the economic scene will be in the forefront in the upcoming session following the release of data on January retail sales. Here, the Department of Commerce reported that such activity had edged forward by 0.1% last month, which was on par with expectations. That tepid increase was materially less than the December gain of 0.5%. The small uptick, which as noted did not deviate from expectations, does not alter the fact that GDP growth is likely to resume in the current quarter, but probably not by more than 1%-2%. In last year's final stanza, GDP had contracted nominally, falling by 0.1%.

Finally, in the day ahead, we have some issues that will likely be notable movers. Specifically, iron ore producer and steelmaker Cliffs Natural Resources (CLF), which ended the session at $36.61 a share, is indicated to open at $31.80 on the report of a fourth-quarter loss. On the other hand, Comcast (CMCSA), which closed at $38.97 a share, is being bid at $42.40 in the pre-market on news of acquisitions and materially better quarterly earnings.

At the time of this article's writing, the author had positions in CMCSA.