After The Close - The U.S. equity market got off to a good start in a week that will be heavy on both earnings and economic news. Today it was predominately non-earnings news, both here and abroad, that pushed the equity indexes higher (more below). At the closing bell, the Dow Jones Industrial Average, the NASDAQ, and the S&P 500 Index were 106, 28, and 11 points higher, respectively. Investors also showed more appetite for risk, as the small-cap Russell 2000 and the S&P Mid-Cap 400 indexes finished with notable gains of their own. The spate of buying on Wall Street also left the broader S&P 500 Index on the doorstep of its all-time high. Overall, advancing issues led decliners by a wide margin on both the Big Board and the NASDAQ, to the tune of nearly three-to-one on the former.

Perhaps the biggest impetus behind today’s buying was news from the euro zone. Investors cheered reports that Italy formed a government, removing a two-month political cloud that hovered over the economically struggling nation. There is renewed hope that Italy’s new Prime Minister Enrico Letta will focus on economic growth and away from austerity. This, along with indications that both the U.S. Federal Reserve and the European Central Bank will continue their stimulus measures, emboldened investors, who increased their appetite for risk. The S&P 500 Volatility Index (or VIX) and the yield on the 10-year Treasury note currently sit at levels that would suggest investors are comfortable with the extra risk.

Also helping equities today were some semi-encouraging reports on the U.S. economy. Before the commencement of trading, the Commerce Department released its latest report on personal income and spending. Specifically, income levels rose last month, albeit less than generally forecast, while spending pushed higher, and did so by a little more than forecast. On the whole, this was a mixed pair of reports that did little to change the overall economic picture as we move more deeply into the spring. However, one positive to take away from the report was that consumers are continuing to spend, and that promises to help keep the economy in forward gear. This, along with data showing that pending home sales increased 1.5% during the month of March, which was far better than the decline posted in February, had investors feeling a bit better about the domestic economy. Not surprisingly, given the aforementioned news from Italy and the decent U.S. economic data, those sectors most closely tied to the performance of the global economy fared well today. The energy and basic materials stocks were standout performers in that sphere.

It was also a good day for those long technology issues. Technology lead the pack among the 10 major sectors, where there was no trace of red ink today. Within the tech space, the stocks of the computer hardware companies and the chipmakers fared the best. Notable gains were recorded by industry heavyweights Apple (AAPL), Hewlett-Packard (HPQ - Free Hewlett-Packard Stock Report), International Business Machines (IBM - Free IBM Stock Report), and Microsoft (MSFT - Free Microsoft Stock Report). Mid-cap stock Medidata Solutions (MDSO) was a notable advancer today, as well.

Looking ahead, it promises to be another busy week for investors, with several important economic reports due over the next four days, culminating with Friday’s much-anticipated report on employment and unemployment. In addition to the data releases, the U.S. Federal Reserve and the European Central Bank will be holding their latest monetary policy meetings. On the earnings front, drugmaking giants and Dow-30 components Pfizer (PFE - Free Pfizer Stock Report) and Merck (MRK - Free Merck Stock Report) headline another hectic week of releases.   - William G. Ferguson

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


12:35 PM EDT - The stock market is off to a strong start today, and is even extending its gains. Hopefully, stocks can maintain their upward momentum through the close of the session. As we pass the noon hour in New York (EDT), the Dow Jones Industrial Average is up 91 points (0.6%); the broader S&P 500 Index is ahead 11 points (0.7%); and the technology-heavy NASDAQ, which is leading the averages higher, is advancing 32 points (1.0%). Market breadth is decidedly favorable, with advancing stocks ahead of decliners by about 3 to 1 on the NYSE.

All of the major market sectors are pushing higher today. There is notable strength in the energy stocks, as the exploration and production issues are making progress. On a related note, the price of oil is moving up to almost $94 a barrel today, and this is likely helping. In addition, the technology stocks are making strides, as the computer hardware issues are showing strength. In contrast, the conglomerates and transportation names, while still in positive territory, are lagging most of the other sectors.

Technically, the S&P 500 Index, after pulling back in mid-April, will likely test its high ground at about 1,597. This will be a critical area, and will be widely watched. The VIX, which is a measure of market sentiment, is lower today, suggesting an increase in bullishness.

Traders likely found today’s economic news encouraging. Specifically, the housing market continues to show a recovery. Pending home sales increased 1.5% during the month of March, which was far better than the decline posted in February, and also ahead of expectations. The homebuilders are trading moderately higher, as a result. Tomorrow, we get a report on the economy in the Chicago area, as well as the Conference Board’s consumer confidence report for April. The Fed’s rate decision and any comments on the general economy will be the subject of scrutiny on Wednesday.

Meanwhile, traders did not receive too many corporate earnings releases today, as Mondays tend to be a light day for such data. However, we did hear from Tenneco (TEN). That stock is largely unchanged, even though the auto parts maker put out a decent earnings report. Also in the auto area, Penske (PAG) stock is higher, after that company posted better-than-expected profits. -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 news is rather light ahead of the bell, as most companies on today’s docket, including nutritional supplements maker Herbalife (HLF), restaurant operators Buffalo Wild Wings (BWLD) and Texas Roadhouse (TXRH), and car rental company Hertz (HTZ), are scheduled to issue results after the market closes. 

On the M&A front, reports surfaced that drugmakers Valeant Pharmaceuticals (VRX) and Actavis (ACT) have been in merger discussions, though it now appears that the talks have stalled due to disagreements regarding price. Still, both stocks are trading modestly higher in the premarket. – 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 - We will shortly begin the final two days of April on Wall Street. And we find that the major averages are either at, or very close to, record highs or at least new 52-week peaks. That is after a mixed session on Friday, which saw the Dow Jones Industrial Average add a dozen points, while the Standard and Poor's 500 Index eased by three points and the tech-heavy NASDAQ was off by 11 points. In the process, the S&P snapped a five-day winning streak, while the Dow climbed ever-closer to its all-time high.

This generally strong market performance has been coming in spite of a succession of economic metrics that might normally have invited some profit taking. For example, on Friday, the Commerce Department issued data showing that the nation's economy grew by 2.5% in the first quarter. Now, while that was materially better than the fourth quarter's estimated GDP increase of just 0.4%, the latest reading, which will get revised in a month from now, was far less than the 3.2% gain that had been forecast by some recently more optimistic pundits.
The less-than-stellar GDP advance followed some dour recent reports on retail spending, industrial production, and manufacturing activity, as well as mixed data on employment. Meanwhile, in the week ahead, we will be getting some potentially market-moving surveys and meetings. To wit, we have just had the issuance of data showing that personal income and spending advanced modestly in March, while tomorrow will bring the opening of the latest Federal Reserve Board FOMC meeting. No major changes are likely at that two-day get together. Also, tomorrow, the Conference Board will issue its monthly findings on consumer confidence. The Fed will then conclude its meeting on Wednesday, when we also will get the monthly reports on manufacturing activity and construction spending, while Thursday will bring releases of weekly jobless claims and the international trade balance. Finally on Friday, the government will issue the most closely watched metric of the month when it reports on non-farm payrolls and the jobless rate for April. Expectations are that the nation added 150,000 jobs this month, nearly double the estimated 88,000 created in March. Also, most expect the unemployment rate to stay at 7.6%.

Then, of course, the earnings parade will continue, with the week ahead scheduled to feature reports from Dow component and drug making behemoth, Pfizer (PFEFree Pfizer Stock Report). Also reporting this week are entertainment provider Comcast (CMCSA) and pharmaceuticals giant Merck (MRKFree Merck Stock Report). Notably, it has been earnings, which have been generally a bit better than forecast, that have allowed stocks to retain much of their momentum.

As to the day ahead, the futures are pointing to a nicely higher opening, when trading resumes in about a half hour from now, as the S&P futures are ahead by almost six points and the NASDAQ futures are better by nearly 13 points. – Harvey S. Katz

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