After The Close - It was a somewhat disappointing conclusion to an unimposing week on Wall Street today, where trading, for the most part, was driven by earnings news both here and abroad. At the closing bell, the major U.S. equity indexes were not too far removed from the neutral line, and also where they began the five-day stretch. As had been the case for much of the week, the NASDAQ fared better than the Dow Jones Industrials and the broader S&P 500 Index. The tech-heavy composite once again got a boost from one of the industry’s heavyweights. Specifically, shares of Amazon.com (AMZN), though down initially on a disappointing earnings report, rallied as investors were encouraged by the company’s growth prospects. Meanwhile, there seemed to be some profit taking in the other major indexes, which entered the week near record levels. Still, the late comeback aside, declining issues outnumbered advancers on both the Big Board and the NASDAQ.

Once again, earnings news—though it did not include any reports from the Dow-30 companies—dominated the headlines on Wall Street. In addition to the aforementioned Amazon.com release, investors were pleased with the Starbucks report today. Conversely, the stocks of Briggs & Stratton (BGG), Decker's Outdoor (DECK), Expedia (EXPE), Tempur Sealy (TPX), and Zynga (ZNGA) all finished lower on disappointing quarterly earnings results and/or guidance.

Meantime, it was a quiet day on the economic front, with the only notable report the Thomson Reuters/University of Michigan survey of consumer sentiment. That data were encouraging, as U.S. consumer sentiment rose in July to the highest level in six years. The accompanying report said that Americans felt better about the current economic climate, though they expected to see a slower rate of growth in the year ahead. The final July reading on the overall index on consumer sentiment climbed to 85.1 from 84.1 in June, topping the consensus expectation of 84. The report lent some selective support to the consumer discretionary stocks today.

However, the consumer cyclical stocks were the only sector closely tied to the performance of the economy that was not under pressure today. The basic materials, energy, and industrial groups were all laggards. Those sectors were hurt by a report from the International Monetary Fund (IMF) that said the interest-rate volatility in the United States could have an adverse global effect and that the global economic outlook is tilted to the downside. The IMF news weighed on some of the major European bourses and Asia’s indexes, including the Nikkei 225, which was off 3% in the latest session.
Looking ahead to next week, the corporate earnings news will receive the lion’s share of the investment community’s attention the first few days, with quarterly results from drugmaking giants and Dow-30 components Merck & Co. (MRK - Free Merck Stock Reprt) and Pfizer (PFE - Free Pfizer Stock Report) on Monday. However, the spotlight will then quickly shift to the economy. Of note, will be reports on consumer confidence (Tuesday), the initial reading on second-quarter GDP (Wednesday), manufacturing activity (Thursday), and employment and personal income and spending (Friday). On top of those reports, a few of which are considered game changers from an equity market standpoint, the Federal Reserve will begin its two-day monetary policy meeting on Tuesday. The FOMC news has been a hot button topic for investors since late May when Fed Chairman Ben Bernanke hinted that the central bank will likely begin to taper off its bond buying later this year. - 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 U.S. stock market is putting in a generally weak session today. At roughly noon in New York, The Dow Jones Industrial Average, which is leading the market lower, is off 105 points; the S&P 500 Index is down nine points; and the tech-heavy NASDAQ is shedding 12 points. Market breadth is decidedly unfavorable, with declining stocks outnumbering advancers by roughly 2 to 1 on both the NYSE and the NASDAQ.

All of the market sectors are trading lower today, which confirms the negative bias to the session. The consumer non-cyclical issues are weak. There are also losses in the financial stocks, as the banks are slipping. The energy group is also likewise losing ground, with a poor showing in the exploration and production names. While there is little aggregate improvement today, the technology issues are showing some relative strength, as they are down a bit less than the other areas of the market.

Technically, the S&P 500 Index has been consolidating a bit lately, after hitting some resistance near the 1,700 mark. To some extent this is healthy, as the market had likely gotten somewhat “overbought”. Small pullbacks during bull market rallies are likely constructive, as they provide traders with a chance to take profits on some issues, while looking for more attractive trades elsewhere. This often shows up as sector rotation, which is important to watch. Pullbacks also allow investors, as a group, to get comfortable with the level of the market, which is sometimes needed after stocks have advanced sharply.

It should be noted that markets here in the U.S. got little encouragement from the trading overseas. Specifically, Japan’s Nikkei was off sharply overnight and that may have provided a negative start to things. In Europe, the markets also put in a weak session.

Further, traders on our shores received little economic news to possibly offset some of the weakness elsewhere. Nonetheless, the University of Michigan’s consumer sentiment figure for July was finalized at 85.1, a bit higher than was generally anticipated.

In corporate news, the earnings reports continue to stream in. Today, we heard from Amazon.com (AMZN). That high-flying issue is now up, despite a mixed release. Starbucks (SBUX) stock is also moving higher, after the coffee server put out better-than-expected profits. ZYNGA (ZNGA) shares are plunging after that company issued weaker-than-hoped for guidance.   –Adam Rosner

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


11:10 AM EST - The bears are out in some force thus far today, taking the leading averages notably lower as we pass the 90-minute mark of trading this morning in New York.

To wit, the Dow Jones Industrial Average, which has been something of a laggard this week, on some earnings concerns, is now off by 142 points, putting that composite of 30 mostly blue chip names near its low point of the session thus far. The Standard and Poor's 500 Index, meantime, is off 13 points, and the NASDAQ, which has been showing some leadership this week, on positive corporate profit news, is now off 22 points.

Some disconcerting news out of China, on a possible revamping of its industrial sector, selective disappointments on the earnings front at home, and some plain old vanilla profit taking are combining to take stocks lower at this point.

Underscoring the generally weaker tone is a poor advance decline ratio, with the Big Board showing twice as many losing issues as gaining stocks. The ratio on the NASDAQ favors the bears as well, but to the tune of five to two.   - Harvey S. Katz

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


Stocks to Watch from The SurveyWhat a difference a day makes. After high-profile Internet stocks posted heady gains yesterday on earnings news, the opposite appears to be the case today. Indeed, investors took issue with second-quarter results from online travel site Expedia (EXPE), which missed the mark on earnings, and social network-based game developer Zynga (ZNGA), which delivered a disappointing outlook and called off plans to build a real-money gambling business. Both of these stocks are plunging in the premarket. Meantime, shares of Amazon.com (AMZN) are down modestly ahead of the bell, after the online retailer posted a surprising loss in the June interim. 

There is plenty of good news, however, and shares of coffee shop operator Starbucks (SBUX), tool maker Stanley Black & Decker (SWK), miner and iron ore pellet producer Cliffs Natural Resources (CLF), and household products company Newell Rubbermaid (NWL) are all indicating higher openings today on earnings.  

Elsewhere, the stock of Activision Blizzard (ATVI) is surging in pre-market trading, after the video game developer announced plans to repurchase most of Vivendi’s majority stake in the company. – 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 - To paraphrase the oft-repeated observation generally attributed to baseball great Lawrence Peter ''Yogi'' Berra, it looked for a time yesterday as though it would be ''deja vu'' all over again on Wall Street. That is, with one high-profile NASDAQ issue propelling that index higher, on strength in earnings, while less-than-compelling profit issuances from some other companies left the several notable equity indexes lagging somewhat behind. That, essentially, was what had transpired on Wednesday. During that session, a largely better-than-forecast result at tech stalwart Apple Inc. (AAPL) had lifted that stock sharply, allowing the NASDAQ to finish slightly in the black. The Dow Jones Industrial Average and the Standard and Poor's 500 Index, meantime, closed moderately lower. In the morning, yesterday, the same pattern had evolved, only this time, the clear tech winner was the stock of social networking giant Facebook (FB), which also resides on the NASDAQ. Once again, this gain was profit driven.

Then, in the afternoon, while Facebook continued to mount a bullish charge, which at one point surpassed 31%, the other indexes started to press forward as well, with the Dow, at one point, edging back into the black by close to 20 points, following an earlier 85-point loss. That sojourn was brief, however, and the sellers once more appeared, driving that 30-stock composite back slightly into the red. From there, the market ebbed and flowed, finally finishing the session modestly in the black, and with more winning than losing issues on both the NASDAQ and the Big Board. The NASDAQ, however, really acquitted itself well, gaining 27 points on the day. In that sense, it was not quite ''deja vu'' all over again.   

Among other movers in the latest session, the homebuilders took a notable hit, on smaller second-quarter increases in orders than had been generally expected from PulteGroup (PHM) and D.R. Horton (DHI). Overall, though, the session was largely uneventful. As to the economy, the Commerce Department posted a report showing selective strength in orders for durable goods, with that uptick, which exceeded expectations in the aggregate, evolving principally from demand for commercial and defense jet aircraft. Elsewhere, orders were flat, although we did see a nifty bounce in capital goods demand, which is always encouraging from a business standpoint. This report, however, was neither a game changer for the economy, nor a major influence on the day's trading. For now, the big story is still earnings, and that will be the case for a few more days before the key July economic reports start to be issued later next week--including the most closely watched survey of the month, the July employment issuance, which is due out a week from today. That can often be a market-moving release.    

Overall, earnings season has been a decent one thus far, with the majority of companies reporting results that have beaten lowered expectations. That has been a recurring theme on Wall Street, with companies setting the bar low and then proceeding to top those unprepossessing expectations. From a market perspective, this trend seems to be working, as Wall Street is still endeavoring to press forward. On that score, the S&P 500 Index, which inked a modest four-point gain during the session yesterday, is inching ever closer to 1,700, a nice round number that logically has some psychological importance.

As to the day ahead, we will again be looking at a full plate of earnings, and expectations are that there will be more good than bad news. The markets, however, look ready to take a pause, following generally weaker performances overnight in Asia and now this morning in Europe. The major problem thus far today are some rumblings out of China that this emerging industrial and economic giant could possibly be overhauling its industrial sector. That would likely presage a slowdown in the world's second largest economy. And, as if on cue our equity futures are moving somewhat lower presaging a somewhat softer opening when trading commences over here in less than an hour from now.

Overall, the U.S. stock market is rather expensive and, as such, will likely prove unforgiving should the high expectations on either the economy, the Federal Reserve, or corporate earnings not be met.   - Harvey S. Katz

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