After The Close - The stock market put in a weak performance this morning, but managed to firm up considerably in the afternoon. As noted, the buying in the afternoon suggests that the bulls may still be willing to commit to the market. At the close, The Dow Jones Industrial Average was up 56 points (0.4%); the S&P 500 Index was ahead by six points (0.4%); and the NASDAQ managed to add on six points (0.2%). Market breadth was favorable, with advancing stocks outnumbering decliners on the NYSE. Furthermore, most of the market sectors closed in positive territory. There was leadership in the consumer cyclical group. Also, the basic materials issues, which have lagged the broader market for quite a while, staged a rebound today, with sizable gains in the precious metals and mining issues. In contrast, there was some weakness in the energy stocks. The technology names also lagged due to losses in the Internet and computer services issues.
Technically, the S&P 500 Index may have encountered some resistance, as it looks to make a sustainable push into new high ground. Notably, yesterday’s selling came on slightly elevated volume, which may be cause for some concern. The S&P 500 Index, if it pulls back further, could test the 1,540 area, and hopefully will find some support there.
Meanwhile, traders in the U.S. got little help from the markets in Europe today. However, once again Japan’s Nikkei rose over 2%, as the Bank of Japan has become aggressive about stimulating the economy there. Traders may be feeling that an improvement in Japan could help business for some companies in the United States.
The economic reports released this morning did little to instill confidence. Specifically, initial jobless claims for the week ended March 30th, came in at 385,000, which was higher than analysts had expected, and also up from the prior week’s reading. Notably, this report follows the weak ADP release put out yesterday, and may be taken as a sign by some traders that tomorrow’s non-farm payroll report will also fall short of forecasts. Furthermore, the trade balance figures for the month of February are set to be released tomorrow.
In corporate news, Best Buy (BBY) stock moved sharply higher on news of a business venture with Samsung. However, Compuware (CPWR) issued weaker-than-expected guidance, and that issue was lower. The news may have some traders concerned that other technology companies may also be operating in a challenging environment. -Adam Rosner
At the time of this article’s writing the author did not have positions in any of the companies mentioned.
12:10 PM EDT - Stocks are mixed to higher today after some positive sentiment from Japan and a bounce-back from yesterday’s profit-taking allowed for a firm opening on Wall Street. Just after the noon hour on the East Coast, the Dow Jones Industrial Average is up 13 points but the NASDAQ is off a few points. In terms of the broader market, the number of advancing issues is moderately ahead of those declining on the Big Board.
Arriving at their desks this morning, traders liked what they heard about aggressive measures to combat deflation in Japan from that nation’s new central bank governor. Specifically, the Bank of Japan announced plans to spend the equivalent of $530 billion on quantitative easing measures. Expectations for such a move in Japan have been high for months, and have helped to lift the Nikkei Index some 50% since late 2012, or its highest level since 2008. The Nikkei’s jump overnight also provided room for optimism that tensions with North Korea weren’t overwhelming.
However, the news out of Europe wasn’t as uplifting. Over there, both the Bank of England and the European Central Bank kept their targeted interest rates steady at low levels, as expected. But ECB president Mario Draghi noted the risks of the euro region’s recovery being thrown off course in the second half of 2012.
Also a bit disconcerting for investors was a jump in weekly initial jobless claims. Although seasonal factors may have skewed the figure, the headline number was the latest of a few disappointing economic reports this week.
At the sector level, consumer cyclical stocks are leading the way. Bright spots there include shares of lululemon athletica (LULU). The retailer announced that its chief product officer would be leaving after a design fiasco with the company’s popular yoga pants.
Elsewhere, shares of Toyota Motor (TM) are moving higher, helped by the upbeat news out of Japan and indications earlier this week of higher auto sales in the United States.
Financial stocks are also doing better than most today. The star performer within that sector is Sterling Bancorp (STL), which has agreed to a merger with Provident New York Bancorp (PBNY).
Heading into afternoon trading, stocks are well off of their best levels of the session, and may do little ahead of tomorrow’s big monthly nonfarm payroll report. - Robert Mitkowski
At the time this article was written, the author did not have positions in any of the companies mentioned.
Stocks to Watch from The Survey – Corporate news is rather light today, as we are still a few days away from the start of first-quarter earnings season. However, there are a few stocks that will likely see active trading today. Shares of Compuware (CPWR) are trading lower in the premarket, after the software company released preliminary March-period results that were below investors’ expectations. Elsewhere, shares of social network operator Facebook (FB) are trading slightly higher in the premarket, ahead of its “Android Announcement” scheduled for later this afternoon. Many believe that the event will introduce new Facebook software for certain mobile devices. Finally, Sheree Waterson, Chief Product Officer of athletic apparel and accessories retailer lululemon athletica (LULU), will step down on April 15th, just weeks after the company pulled 17% of its popular yoga pants from shelves due to product defects. LULU stock is down slightly ahead of the bell. – 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 bulls ran into tough resistance yesterday, as the major averages and the vast majority of individual stock groups succumbed to some long overdue profit taking. Any and all attempts to stave off the bears failed, as equities, off all session, fell somewhat more late in the day to close near their session lows.
In all, by the close, the Dow Jones Industrial Average, which had just hit another all-time high the day before, had fallen by 112 points, while the Standard and Poor's 500 Index had shed 17 points, and the NASDAQ had tumbled 36 points. The small and mid-cap indexes, meantime, fell more on a percentage basis, showing relative weakness for the second day in a row. Worse, losing issues swamped winning stocks on the Big Board by a four-to-one ratio and by almost that much on the NASDAQ.
Helping to push stocks lower, in addition to the aforementioned profit taking, was a dour report on non-manufacturing activity in this country. Our readers will recall that on Monday, the Institute for Supply Management had reported a noteworthy slowdown in manufacturing activity growth. Now, yesterday that same trade group issued a survey showing that the services sector's growth had moderated, as well, albeit less severely, but still more than forecast.
Also hurting investor sentiment was a disappointing report on job creation in the private sector. That metric, put out by payroll services provider Automatic Data Processing (ADP), showed an increase of 158,000 such jobs in March; expectations had been for a gain of 192,000 jobs. Both totals, it should be noted, were well below the February total of 237,000 new positions. What made this report especially unsettling is that it could be a harbinger of things to come tomorrow when the U.S. Labor Department is to report on non-farm payrolls across the country and the U.S. jobless rate for last month.
Then, of course, there is North Korea and its increasing nuclear threats, which have been forthcoming in recent days from that notoriously volatile nation. Finally, there is Europe and the daily soap opera on the Continent. Yesterday, we were treated to some additional weak economic reports in the euro zone, especially in Italy. Clearly, if the forlorn bears were looking for an excuse to act boldly, it was provided by the news backdrop both here and abroad.
As to the current session, there were some early gains overseas, at least in France and Germany, where their bourses were headed nicely higher. However, the London FTSE 100 was in the red, albeit modestly. And over here, our equity futures had been showing some early strong gains, which had been presaging a notably higher opening on our shores. But in just the last few minutes, the Labor Department has come out with figures for weekly jobless claims. Expectations had been for a relatively tame reading of 350,000 layoffs. However, the data showed that 385,000 claims had been filed in the latest week, although some seasonal factors might well have crept in. By comparison, the week before had seen just 357,000 claims filed. The 385,000 number was the highest since last November 24th when 390,000 weekly claims had been filed. On the other hand, continuing claims fell somewhat, but here too, the number was greater than forecast.
The claims data, coming a day before the new employment and unemployment figures are released from the Labor Department, are worrisome, especially as they come on the heels of yesterday's disquieting ADP private-sector employment data. Not surprisingly, the futures have backed off of their initial strong gains, and are now suggesting more of a mixed opening on Wall Street. - Harvey S. Katz
At the time of this article's writing, the author did not have positions in any of the companies mentioned.