After The Close - It was a rollercoaster ride today for those long equities. The major U.S. equity indexes jumped out to a fast start, as investors were pleased to hear from Federal Reserve Chairman Ben Bernanke—who spoke before Congress this morning—that the central bank was likely to continue its bond-buying program in the near term. In the process, investors looked past some less-than-stellar earnings news from Corporate America (more below) and a decent report on the housing market. However, the good times did not last, as the indexes retraced all of the early gains and then some after the minutes from the latest Federal Open Market Committee meeting showed some of the District Presidents favored beginning to wind down the ongoing bond-buying program, starting as early as next month.

When all was said and done, the bears, who have been in hibernation for much of 2013, made a modest statement, emboldened by the aforementioned release of the latest Fed minutes. At the closing bell, the Dow Jones Industrial Average, the NASDAQ, and the S&P 500 Index were down 80, 39, and 14 points, respectively. Even bigger losses for the small-cap Russell 2000 and the S&P Mid-Cap 400 Index underscored the weak tone to today’s session. Overall, declining issues outnumbered advancers by a sizable margin on both the Big Board and the NASDAQ.

From a sector perspective, all of the top-10 groups finished in the red even after many were well into positive territory in the early going. The biggest laggards were energy, telecommunications, basic materials, and technology. Within the energy area, shares of the oil and gas exploration and production companies were notably weaker, while the semiconductor stocks were the biggest laggards in the telecom space. All in all, there were few places for investors to hide in today’s equity market, as even the defensive-minded healthcare and utilities sectors finished in the red. The bond market also did not provide much relief for nervous investors, as the yield on the benchmark 10-year Treasury note, which moves in the opposite direction to the price, jumped sharply today, finishing above 2.00%, at 2.03%, for the first time since March 15th.      

As noted, the main impetus behind the second-half selloff was the release of the minutes from the Federal Reserve's April 30-May 1 FOMC meeting. Although the document showed that several committee members said more progress is needed before scaling back on bond purchases under the Fed's quantitative easing program—which was what Chairman Bernanke echoed before Congress this morning—the same report showed that some members did express their willingness to slow asset purchases as early as this June. Investors also were a bit unnerved that the minutes showed committee members were at odds over what evidence would be used to determine that the bond-buying program had run its course.

Meantime, the earnings news was not all that encouraging. Among the negatives today were reports from home-improvement retailer Lowe’s (LOW), general merchandise retailer Target (TGT), apparel and accessories seller American Eagle Outfitters (AEO), and office supplies company Staples (SPLS). On the bright side, were better-than-expected releases from jeweler Zale (ZLC), luxury homebuilder Toll Brothers (TOL), and data storage provider NetApp (NTAP). Investors should also note that computer giant Hewlett Packard (HPQ - Free Hewlett-Packard Stock Report) was scheduled to release its latest results after the close of trading today. Shares of H-P, which is the last of the Dow-30 components to report quarterly earnings this season, were modestly higher ahead of today’s report.   - 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 EDT - The stock market is pushing strongly higher today in very volatile trading. Traders were encouraged by Federal Reserve Chairman Ben Bernanke’s testimony before Congress this morning. These remarks essentially underscored a commitment to the current monetary policy, aimed at keeping interest rates low, something which is designed to stimulate the broader economy, but is also quite favorable for traders. At just past noon in New York, the Dow Jones Industrial Average is up 96 points (0.6%); the broader S&P 500 Index is ahead about 11 points (0.6%); and the tech-heavy NASDAQ is tacking on 17 points (0.5%). Market breadth is favorable, as advancing issues are ahead of decliners by about 2 to1 on the NYSE. All of the market sectors are making progress today, driven higher by the healthcare and financial stocks. On balance, the services names and the utilities are underperforming the other groups today.

Technically, the S&P 500 Index continues to move higher, and is now just about 1% below the 1,700 mark. Passing through a large round number may hold some psychological importance with investors, and also will likely receive broad media coverage which can increase bullish sentiment particularly among the brokerage houses and the retail investors. The VIX is slightly lower today to just over 13.

While the Fed was likely the center of attention today, there were a few economic reports released that did not go unnoticed. Specifically, existing home sales for the month of April came in at 4.97 million units, annualized. This showing was up from the 4.94 million posted in March, and just in line with analyst expectations. Tomorrow, we will receive more information about the state of the housing market, with the release of the new home sales figures for April. Also, the employment situation is back in the spotlight as the weekly initial and continuing jobless claims will be issued, too.

There is some corporate news moving stocks today, as well. In the technology space, NetApp (NTAP) shares are trading higher after the company posted impressive quarterly results, commenced a dividend payment, increased its share-buyback program, and is undergoing restructuring efforts. In retail, Target (TGT) stock is off after the company issued cautious guidance.

Heavily traded stocks moving higher in price include: Pfizer (PFE Free Pfizer Stock Report), Staples (SPLS), and Mondelez (MDLZ). Stocks headed lower today include: Oracle (ORCL) and DryShips (DRYS).  - Adam Rosner

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


10:45 AM EDT - The buyers are making their feelings known this morning on Wall Street, as the bulls are again making their statement. To wit, after a wary start to the new trading day, as investors eagerly awaited comments before Congress by Federal Reserve Chairman Ben S. Bernanke, the central bank's head has not disappointed the bulls.  

Specifically, Mr. Bernanke is telling Congress that the U.S. job market remains weak and that it is too soon for the Federal Reserve to end its aggressive monetary stimulus program. Although he acknowledged that the economy was pushing ahead moderately and that the jobless rate had fallen to a four-year low of 7.5%, that level was still too high, he intoned, to be consistent with a healthy economy.

His comments on the jobless situation and also the indication that he feels that there are many risks yet facing the economy suggest that the Fed is not ready to reduce its bond purchases, as some have been surmising. And this is clearly what the bulls have been wanting to hear.

Thus, after the stock market had been just grudgingly higher in the first half hour of trading, the release of Mr. Bernanke's comments at 10:00 (EDT) this morning really got the ball rolling, and within minutes of his remarks, the Dow Jones Industrial Average had jumped ahead by more than 150 points; the Standard and Poor's 500 Index had leaped forward by 18 points; and the tech-heavy NASDAQ had surged by almost 30 points.

However, now, some of the edge has come off of the market, and the earlier euphoria seems to be dissipating just a bit. The market is still nicely higher, to be sure, but the Dow is now ahead by just 80 points; the NASDAQ has tempered its gain to 10 points; and the S&P 500 is ahead by about seven points. The swings are getting exaggerated, and we would not be surprised if there will be more gyrating back and forth, as the trading day proceeds. 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.


Stocks to Watch from The Survey April-quarter earnings reports continue to roll in, and retailers remain in the spotlight. A number of companies released financials that disappointed investors, and shares of Lowe’s (LOW), the world’s second-largest home-improvement center, general merchandise retailer Target (TGT), apparel and accessories seller American Eagle Outfitters (AEO), and office supply store Staples (SPLS) are all trending lower in the premarket as a result.

It was not all bad news, however, and shares of Zale Corp. (ZLC) are surging ahead of the bell, after the jeweler delivered better-than-expected April-period results. The stocks of homebuilder Toll Brothers (TOL) and data storage provider NetApp (NTAP) are also indicating higher openings this morning on earnings news. Finally, after posting a nice gain yesterday on the back of solid April-quarter results, shares of Saks Incorporated (SKS) appear poised for an even bigger rally today, after reports surfaced that the high-end retailer may be looking to put itself on the auction block. – 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 rode to another record on Wall Street yesterday, with all of the major averages making strides in an uneven session that opened up strongly, pulled back at mid-session, and then closed with a modest rush. All told, the Dow Jones Industrial Average gained 52 points, to end the day at 15,388, a record. The Standard and Poor's 500 likewise closed at an all-time high, adding three points to finish up the latest trading day at 1,669. The NASDAQ also pressed forward, climbing a modest six points, to 3,502. While that is nowhere near its best levels ever, the gain did put this tech-heavy index at another 12-month peak.

Once again, it was optimism about the global economy, a sense that there are no better investment alternatives around in this low-interest-rate environment, and some hopes that Federal Reserve Chairman Ben S. Bernanke will not throw cold water on the rally when he goes before Congress today with his thoughts on the economy and central bank interest-rate and monetary policies. The expectations are that he will not dash hopes for a continuation of the present accommodative monetary stance, but there remains the possibility that he will hint at some future easing up on the bank's ongoing bond-buying program. How hard he comes down in that direction, or even whether he will at all, could have an impact on traders.

Also, the business beat, so conspicuously silent thus far this week, starts to pick up today when the National Association of Realtors will step forward with its take on housing resale transactions. Expectations are that such properties were sold at a modestly higher rate in April than during March and were well ahead of the prior-year pace. This data will be followed up tomorrow with a report on new home sales, as well as weekly figures for new and continuing jobless claims. That will then be followed up Friday with the latest metrics on durable-goods orders. Meantime, Friday also will see a shortened trading day in the bond market, but normal hours in the equity market ahead of Monday's observance of Memorial Day. 

Then, there are earnings, which have been generally upbeat in recent weeks. However, that is not necessarily the case today, as giant retailer Target (TGT) has reported less-than-welcoming sales and earnings for its latest quarter and that stock is reacting somewhat, with a pre-market setback. Also, home improvement retailer Lowe's Cos. (LOW) weighed in with rather disappointing profit news as well, and that stock, too, is indicating a lower opening. By comparison, Lowe's chief rival, Home Depot (HDFree Home Depot Stock Report), had solid quarterly results and that stock shot up yesterday. Finally, office supplies provider Staples (SPLS) likewise missed on the bottom line, and that stock is backtracking modestly, as well, in the pre-market.

Such weaker data aside, the equity futures seemed to be focused on Mr. Bernanke and his upcoming remarks, as those futures are up nicely, with the S&P 500 and the NASDAQ ahead by five and 11 points, respectively, with about a half hour to go until the start of the new 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.