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After The Close - The stock market opened sharply higher this morning, managing to maintain and even build upon these gains, through the afternoon. At the close of the session, the Dow Jones Industrial Average ended up 169 points (1.1%); the broader S&P 500 Index was ahead 22 points (1.4%); and the NASDAQ, which displayed some leadership, advanced 58 points (1.6%). Market breadth indicated that there was widespread buying of equities, as advancing stocks outnumbered decliners by over 5 to 1 on the NYSE. All of the various market sectors participated in today’s up move. Specifically, there were large advances in the basic materials issues. The precious metals names also did well, as gold was up almost 3%, to $1,284 an ounce. The telecom sector also performed well. We likewise saw further gains in technology issues, as the semiconductor index was up almost 2%. The software companies specifically showed leadership. While there was no real weakness in the market today, it should be noted that some of the consumer issues, such as select beverage makers and apparel companies, lagged a bit.

Technically, the S&P 500 Index is now almost back to the high ground reached in May. It should be noted that since correcting in mid-June, the market has staged a dramatic recovery, with numerous advances over a two-week period. While it is hard to say if conditions are now “overbought”, some consolidation, or at least a pause, would not be unexpected. The VIX was lower today, and is now just under 14, down from the 20 range reached at the end of June.

The economic reports released today probably had little to do with the rally. The weekly initial jobless claims actually came in a bit higher than many had anticipated, and were up from the prior week’s reading. Weekly continuing claims also remained unimpressive. Tomorrow, the Producer Price Index for June is set to be released, along with the University of Michigan’s Consumer Sentiment Survey for the month of July. On the earnings front, J.P. Morgan (JPM -Free J.P. Morgan Stock Report) is slated to release its second-quarter figures tomorrow and that will be a widely-watched report.

Ultimately, the real reason behind today’s rally was likely the remarks issued by the Fed Chairman Ben S. Bernanke late yesterday afternoon.  Traders were likely relieved to learn that the Fed does not intend to abandon its supportive monetary policy, and in that sense, it was back to business as usual. -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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12:15 PM EDT - Stocks are trading nicely higher today on the back of investor-friendly comments by Federal Reserve Chairman Ben Bernanke. At noontime on the East Coast, the Dow Jones Industrial Average is 138 points higher and the NASDAQ is 42 points to the good. Market breadth is strongly positive, with more than five stocks up for every one down on the New York Stock Exchange.

Mr. Bernanke’s affirmation that the Fed’s monetary accommodation is likely to remain in effect quite a while longer was music to Wall Street’s ears. It seems that the central bank was taken aback by the recent sharp move higher in long-term interest rates after Mr. Bernanke laid out a timeline for bond purchases to end. The Fed Chairman is now seeking to reassure the markets that policy changes will be gradual and clearly telegraphed.

The result has been a shift back to the investment playbook that helped the Dow rally to all-time highs from November to May. Sectors performing especially well today include interest-rate sensitive groups, such as real estate investment trusts and telecoms. Stocks in those sectors on the move today include those of REITS Annaly Capital Management (NLY) and American Tower (AMT). Shares of Dow component AT&T (T Free AT&T Stock Report) are also on the rise.

Another leading group is basic materials. Stocks in this sector have been laggards of late with the economic slowdown in China and the steep fall in the price of gold. But, at least for today, the shares of miners, such as Freeport-McMoran Copper & Gold (FCX) and Barrick Gold (ABX) are enjoying a day in the sun.

Homebuilding stocks are also enjoying a bounce after experiencing selling pressure in recent few weeks. Shares of luxury builder Toll Brothers (TOL) and KB Home (KBH) are up notably on a percentage basis.

The rally in homebuilding stocks comes despite a rise in mortgage rates to a two-year high. According to government agency Freddie Mac, the average rate on a 30-year home loan is now 4.51%, up from 4.29% last week. A year earlier, the rate on a 30-year mortgage was 3.56%. Since early May, the average rate on the 30-year loan has risen more than a full percentage point.

Today’s lagging group is the financial sector, where the renewed commitment by the Fed to keep its stimulus measures in place is seen as pressuring margins. Wells Fargo (WFC) shares are off a bit as a result.

Heading into afternoon trading, stocks are close to their best levels of the session. - Robert Mitkowski

At the time this article was written, the author did not have a position in any of the companies mentioned.

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10:15 AM EST - Comments by Federal Reserve Board Chairman Ben S. Bernanke, released after the stock market closed yesterday, have brought out the bulls en masse thus far this morning.

Specifically, the Fed Chairman said that ''a highly accommodative policy is needed for the foreseeable future.'' That intonation has helped to counter earlier fears that the Fed would shift monetary policies abruptly. True, we still sense that the lead bank will start to reduce its asset purchases by yearend. It is just that these more recent musings indicate that the central bank will be less ready to raise short-term interest rates (i.e., the federal funds rate target), which it controls directly, until much later--perhaps 2015, if even then.

Such comments and the likelihood that the Fed will be sensitive to monetary concerns among investors are sending stocks sharply higher so far this morning. Thus, as we approach the one-hour mark on the East Coast we find that the Dow Jones Industrial Average is up 140 points, the Standard and Poor's 500 Index is better by 17 points, and the NASDAQ is in the plus column to the tune of 39 points. 

Not surprisingly, given this early strength, the breadth of the market is strongly positive, with the Big Board boasting an advance-decline ratio of some 10-to-one, while on the NASDAQ, gainers are ahead of decliners on the order of four to one. Bonds are also strengthening, and yields on these fixed-income instruments are falling rather sharply, with the yield on the 10-year Treasury note down to 2.58%.   - Harvey S. Katz

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 SurveyInvestors are going over a few earnings reports this morning. Although Yum! Brands’ (YUM) profit fell year to year in the May term, as sales in China slipped, shares of the restaurant operator are up slightly in the premarket. Indeed, earnings were a bit better than expected and the company’s outlook was upbeat. Investors were even more impressed with May-period results from Texas Industries (TXI), and shares of the supplier of cement, aggregates, and other heavy building materials are up nicely ahead of the bell. On the other hand, the stock of PriceSmart (PSMT) will likely come under pressure when trading commences, after the operator of warehouse club stores in Latin America delivered May-quarter earnings that fell short of investors’ expectations. 

Retailers are also in the spotlight this morning, as several chain stores have reported same-store sales figures for the month of June. Thus far, investors appear pleased with results from warehouse club Costco (COST) and Victoria’s Secret parent L Brands (LTD). – 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 - The U.S. equity market bent, but did not break, yesterday, as traders resisted the temptation to aggressively take profits following a quartet of successive advances by the leading averages. In the process, the Dow had risen further to 15,300, while the NASDAQ had jumped to a 12-year high of 3,500.

In all, the market weaved in and out of the plus column throughout the day, generally holding in the red during the morning hours, but making several half-hearted attempts to push into the black in the afternoon. This volatility within a comparatively narrow band--at least by recent standards--saw the Dow Jones Industrial Average deviate between a loss of 42 points at its low and a gain of 48 points at its high. This limited variance, in contrast to recent sessions where gains and losses in the triple-digit point range had been commonplace, reflected the absence of hard news on the economy and the lack of significant earnings releases as second-quarter reporting session is still a handful of days from really heating up.

However, there was still news of note from the Federal Reserve, with the lead bank releasing the minutes of its mid-June FOMC meeting in the early afternoon. Essentially, the bank intoned that it was not about to pull the cord on monetary stimulus just yet, as some have feared. Indeed, a number of traders have suggested that the bank might pare back its celebrated bond-buying efforts by as early as this September. The minutes seemed to imply that there was a sufficient amount of opposition to such a timeframe to perhaps hold off for a while. We have sensed right along that the end of the year was a more logical target date, and we maintain that position. That said, the Fed Chairman Ben S. Bernanke was quick to add that ''a highly accommodative policy is needed for the foreseeable future.''  That comment suggests rather strongly that short-term interest rates will be kept at current historically low levels until 2015--or later.

Still, even the suggestion that the Fed might be having second thoughts about an imminent change in monetary course--as it relates to long-term interest rates--had the effect of sending stocks to their best levels of the day, if briefly. That pickup in buying, though, was not sustainable, and stocks again eased selectively into negative territory for a time, albeit gingerly, meandering back and forth between red and black ink into the close. One reason for the late caution, meantime, may have been that bonds sold off following the release of the FOMC minutes, and by the end of the day, the yield on the benchmark 10-year Treasury note had climbed to 2.68%; the companion 30-year Treasury saw its yield rise to 3.69%. Both fixed-income vehicles are yielding near the top of their 52-week range. 

By the end of the trading day, the equity averages were mixed, with the Dow and the Standard and Poor's Mid-Cap 400 being slightly lower, while the NASDAQ, buoyed by strength in selected tech stocks, closed up 17 points. The small-cap Russell 2000 also tacked on modest gains, while the S&P 500 Index, suitably enough, was essentially unchanged, gaining less than a third of a point.    

Now, a new day dawns, and once again, the economic calendar is light. However, we have seen a further reassessment of the Fed's minutes and Mr. Bernanke's comments and the bulls are seemingly back in charge, as the equity futures are barreling forward with gains of 17 points in the S&P futures and 30 points in the NASDAQ. Such gains come on the heels of moderately better performances in the European bourses so far this morning. Our sense going forward is that the economy will strengthen somewhat during the current half, with GDP growth on the order of 2%, or slightly better, and that even should the Fed, as we expect, start to slow the rate of asset purchases by the end of the year, the economy should press forward even a little more strongly in 2014. – Harvey S. Katz, CFA

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