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After the Close - The U.S. equity market, fresh off a record-setting day in which the Dow Jones Industrial Average finished at an all-time high, saw most of the major equity indexes move forward at a very measured pace today. However, the NASDAQ did shed a few points in today’s session on some weakness in the technology sector (more below). Our sense is that investors took a bit of a breather after the recent moves into rarified air, which in the process has left the market overextended. Overall, advancing issues held a slight advantage over decliners on both the Big Board and the NASDAQ.

As noted, the technology sector was sluggish in the latest session, as weakness in the shares of industry behemoths Apple (AAPL) and Google (GOOG) weighed on the largest sector. In the latter name, investors may be taking some profits after the Internet search giant stock hit an all-time high. Meantime, the more defensive sectors, including the utilities, consumer staples, healthcare, and telecommunications, had a hard time holding the neutral line for much of the session—and each group ultimately finished in the red. Conversely, those sectors most closely tied to the performance of the economy did well, with leadership coming from the energy and basic materials names.

Speaking of the economy, the news on the homeland continues to lend support to the equity market. Before the market opened, payroll processing giant Automatic Data Processing (ADP) reported that the private sector added 198,000 jobs in February, beating the consensus expectation for an increase of 170,000. Then at 2:00 P.M. (EST), the latest Federal Reserve Beige Book summation of economic conditions showed the U.S. economy expanded in all parts of the country during the first two months of 2013, helped by strong auto sales, a continued recovery in housing, and improved job prospects. Overall, the Fed said that 10 of its 12 Districts reported modest or moderate growth, while Boston and Chicago Districts reported slow growth. 

Also later in the day, we received news regarding the ongoing budget talks on Capitol Hill. Specifically, the Republican-controlled House approved legislation to prevent a government shutdown on March 27th and limit the impact of newly imposed spending cuts on the Defense Department. The House’s measure was sent to the Senate, where the Democrat-controlled Senate hopes to give additional agencies similar flexibility in implementing their share of the $85 billion in spending cuts required to take effect by the end of the budget year. While this news is a step in the right direction, a big clash over Medicare looms next week, when House Republicans and Senate Democrats are expected to unveil rival budgets. That said, the failure last Friday to reach a deal to avoid the automatic spending cuts has not had much of an effect on the performance of the equity market.

All in all, the continued demand for equities is pushing the market to new heights. The desire for stocks in recent weeks is coming at the expense of fixed-income securities. The yield on the 10-year Treasury note—which moves in the opposite direction to the price—ended the session at 1.94% after falling to 1.85% last week. This, along with the S&P 500 Volatility Index (or VIX) trading at historically low levels, is a clear sign that investors’ appetite for risk continues grow. However, such behavior does leave the market susceptible to a selloff if disappointing news were to surface. With this in mind, investors will be paying close attention to the government’s monthly report on job creation due out this Friday morning at 8:30 (EST).  - 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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12:30 PM EST - The stock market opened higher this morning, with the Dow pressing to another record, but is now giving up much of its gains. Some temporary resistance here is not too surprising, given the advances logged over the past few months. At just past noon in New York, the Dow Jones Industrial Average is up 26 points (0.2%); the S&P 500 Index is off about a point; and the technology-heavy NASDAQ is falling modestly. Market breadth indicates a mixed session, as advancers are just about even with decliners on the NYSE. The major market sectors show unevenness, as well. There is leadership in the basic materials and consumer cyclical stocks. However, there is weakness in the high-yielding utility names, and losses in the healthcare and services stocks.

Technically, the past few days of trading suggest considerable underlying strength to the market. Notably, the S&P 500 Index pulled back to near its 50-day moving average in late February, possibly on concerns about the nation’s budget issues. However, the consolidation was short lived, as the bulls moved in pushing the market higher. Trading volumes have been decent, too, showing a commitment to the rally.

Once again, trading in the U.S. at the open may have been influenced by news overseas. The markets in Asia continue to rally, with notable gains on Japan’s Nikkei. That index was up over 2% last night. Recent strength reflects the possibility of a looser monetary policy.

There were also a few positive economic releases put out today. Specifically, the jobs situation is looking better. The ADP Employment report showed 198,000 private-sector jobs were added in February. This was far better than the 150,000 jobs that analysts had anticipated. We will get more information tomorrow with the release of the weekly initial and continuing claims figures. This will set the stage for the government’s February employment report, due out of Friday. Elsewhere, factory orders for January slipped 0.2%, which was a bit less than had been expected. Meanwhile, this afternoon the Fed will release its Beige Book summation for the month of March, and that may influence trading later in the day.

There are a few earnings reports worth noting. Specifically, Staples (SPLS) shares are off, after the office supply giant issued a weak outlook. American Eagle Outfitter (AEO) is seeing its stock slip, after the apparel company provided a sluggish forecast, as well. Meanwhile, shares of Verifone (PAY) are rising after the technology company posted better-than-expected quarterly results.   - Adam Rosner

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 Survey It was economic news, not corporate earnings reports, that drove the Dow Jones Industrial Average to a record high yesterday. However, that doesn’t mean earnings aren’t key indicators, and investors should be aware of several reports out today, mainly from retailers. Wall Street appears pleased with holiday-period financials from closeout store operator Big Lots (BIG), and that stock is up nicely ahead of the bell. On the other hand, shares of office supply store Staples (SPLS) and teen apparel and accessories retailer American Eagle Outfitters (AEO) are both trading notably lower in the premarket after releasing January-quarter results. Likewise, shares of AeroVironment (AVAV), which designs, develops, and produces unmanned aircraft systems, are plunging in pre-market trading on earnings news. – 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 - It took more than five years, but the Dow Jones Industrial Average, which had first soared past the 14,000 mark--cresting at 14,164 in October of 2007--before subsequently collapsing, has made it all the way back--and then some.

Specifically, that 30-stock blue-chip composite, which has threatened to run past that heretofore elusive 14,164 record target on several occasions over the past few weeks, rose above that mark, with plenty of room to spare yesterday, leaping by 126 points, a full 89 points above the record in a buying panic that at one point had seen the Dow rise by more than 155 points. And the Dow did not run up in a vacuum, as the other principal averages also leaped forward, led by the 42-point surge in the NASDAQ, which translated into a gain on the day of 1.32%. That runup bettered that of the Dow, the Standard and Poor's 500 Index, and the small-cap Russell 2000.

All told, with yesterday's fireworks, the Dow is now up by 8.8% on the year to date; the S&P 500 is ahead by 8.0%; the NASDAQ is in the plus column by 6.8%; and the Russell 2000 is in the black by 9.2%. It has been a broadbased and very deep rally that has now continued for the better part of four years.

And it is not just our markets that are sizzling. In fact, the European bourses are hitting four-year highs, even though the Continent is engulfed in a recession that could persist for the better part of this year. Behind this rally is the apparent commitment by the world's central banks to continue supporting growth in the world's biggest economies, from the United States, to Europe, to Asia. Meanwhile, a broad measure of European stocks, the Stoxx European 600, has now risen to its highest level since June of 2008.

As to our markets, after a brief and rather shallow selloff early last week, on fears that the Federal Reserve might pull the plug on its monetary easing ways, reassurance by Fed Chairman Ben S. Bernanke in the following days has clearly righted the ship. It appears as though Mr. Bernanke, a student of the Great Depression, has no intention of stopping the flow of easy money anytime soon. Also, the mandatory spending reductions, put into effect on March 1st, have not dulled the public's appetite for equities. In fact, the so-called sequestrations have emboldened some investors, who sense that the sky will not fall if spending is cut, as some have warned.

Meantime, the world goes on, and this morning we already have had the issuance of the monthly private-sector payroll report from Automatic Data Processing (ADP). That metric rose by 198,000 in February, the biggest one-month gain in a year, and another sign that the labor market is finally showing some sustained improvement. Tomorrow, we will get the latest figures on weekly and continuing jobless claims, and on Friday, the Labor Department will issue its monthly survey on non-farm payrolls and the jobless rate. At this point, a gain of 155,000 jobs is the forecast.

Finally, the good news from ADP and some lingering momentum from yesterday are propelling the equity futures nicely higher thus far this morning, presaging another strong opening when trading commences in about a half hour from now. A Dow record has been set, and the Wall Street bulls are seemingly intent on establishing additional records. Stay tuned. – Harvey S. Katz

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