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After The Close - Stocks regained their footing to a degree today after a healthy dose of profit taking over the past few weeks. At the close, the Dow Jones Industrial Average was up 66 points. Technical difficulties that occurred midway through the session blurred performance on the NASDAQ, though. That tech-heavy index was stuck at a gain of 31 points for hours, and closed 39 points higher. As for market breadth, winners topped declining issues by a wide margin, which was a promising sign.

Investors were cheered by positive economic news. The so-called "flash" purchasing managers index issued by financial data firm Markit rose in the U.S., the euro zone, and China. All of the readings were above the threshold that pointed to growth for the first time in over two years. In addition, this morning’s weekly initial unemployment data suggested that labor market conditions continue to slowly improve, even though claims were up slightly, week-to-week.

The uplifting tone of the business news allowed traders to regain a sense of bullishness about where the economy may be headed. Worries about the Federal Reserve reducing the amount of stimulus it is providing have taken center stage in recent weeks, and with justification. But positive signals, in this case regarding global manufacturing, offer the promise of an enduring recovery which, after all, is the Fed’s goal. The central bank realizes that it can’t buy an unlimited amount of bonds.

Then, too, the Dow had fallen about 5% coming into today’s trading, after having set an all-time high early this month. That proved to be enough of a pullback, for now, to allow bargain-hunters to step in.

Of the stock market’s various sectors, the favorable manufacturing data lifted shares in the basic materials, energy, and industrial groups, in particular. That provided a boost to stocks, such as Cliff’s Natural Resources (CLF), Schlumberger (SLB), and Caterpillar (CAT -Free Caterpillar Stock Report).

Certain retailers continued to have a tougher time of it, though. Shares of Abercrombie & Fitch (ANF) and Sears Holdings (SHLD) fell notably after issuing disappointing results. That held back the performance of the Consumer (Discretionary) sector as a whole.

Elsewhere, utilities stocks, including that of Con Edison (ED) bounced back a bit from a rough stretch of rising interest rates. Interest rates rose again today, but there may be a feeling that sentiment had turned too bearish toward the group.

Tomorrow brings a report on new-home sales for July at 10:00 A.M. EDT that may help set the mood on Wall Street early on. -Robert Mitkowski

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

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12:15 PM EST - As we progressed toward the noon hour of trading in New York, it appeared that the major U.S. indexes may finally snap out of the recent losing streak. The Dow Jones Industrial average, whose six-day slide has been its worst in over a year, is holding on to a 50-point gain, while the broader S&P 500 (up 10 points) is showing about half a percentage point increase. Traders’ increased appetite for risk is evident in the tech-laden NASDAQ’s action, which leads the pack with an advance of just under one percent.

Market participants appear to be largely reacting to favorable global economic data. Specifically, early readings on manufacturing activity in August revealed increases for the U.S., the euro zone, and China. In addition, although the number of Americans filing new claims for unemployment was up last week, it remains close to its six-year low.

Meanwhile, the European bourses appear to be responding to the same cues, only more so to the upside. Germany’s DAX remains the frontrunner, with a gain of 1.25%, with France’s CAC-40 not too far behind (up 1.10%), and London’s FTSE 100 showing a still-respectable advance of over half a percentage point.   - Mario Ferro 

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 SurveyRetailers remain in the earnings spotlight today, and the news is largely uninspiring. The stock of Abercrombie & Fitch (ANF) appears to be the biggest loser, and it’s plunging in the premarket after the apparel and accessories retailer announced weaker-than-anticipated July-period results. Management also issued October-quarter guidance that fell well short of investors’ expectations. Other retail companies seeing their shares trade lower ahead of the bell on disappointing earnings news include Sears Holdings (SHLD) and Dollar Tree (DLTR). Lackluster financials were not limited to retailers, however, and shares of computer maker Hewlett-Packard (HPQFree Hewlett-Packard Stock Report) and meat and packaged foods company Hormel (HRL) are both indicating lower openings this morning, with HPQ stock particularly weak. 

Nonetheless, there were a few bright spots, with video game seller GameStop (GME) and natural and organic foods maker Hain Celestial Group (HAIN) impressing investors. Both stocks are up nicely ahead of the bell as a result. – 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 reduction in stock market volatility, which we noted yesterday morning had been present on Tuesday, proved a one-day affair to the chagrin of more conservative investors. In fact, volatility stepped up notably once again yesterday. For example, stocks opened the day lower, tried to rally in mid-morning; fell back gradually, then sharply, after 2:00PM (EDT); then regained their form shortly thereafter--even moving into positive territory for a few minutes--then weakened one last time, to end the session notably lower, but still comfortably above their worst levels of the session. It was that sort of a day.

The prompting for all this was clearly the Federal Reserve, specifically the lead bank's release of the minutes from its July Federal Open Market Committee (FOMC) meeting. Here, there have been weeks of fretting that the Fed would begin to taper its bond-buying efforts--which have involved the purchase of $85 billion in Treasuries each month and have proven highly popular--within a matter of weeks. Concerns have been especially prevalent over the past fortnight, which has seen the Dow Jones Industrial Average fall from an all-time intraday high of 15,658 on August 2nd, to 14,880 at the index's nadir yesterday afternoon. The other averages, also have, performed poorly recently, although not quite as badly as the Dow. The presence of some high-yielding issues on the Dow has been a particular thorn on the side of the bulls, as those issues would be obvious casualties were interest rates to rise further and provide competition for higher-yielding stocks.

What led to the fast retreat in the afternoon was the Fed's reaffirmation that it would begin tapering its bond purchases later this year. Initially, stocks sold off, as skittish traders apparently feared that before the end of the year meant next month. Of note, there are three scheduled Fed meetings before the conclusion of 2013--in September, October, and December. As suggested, the bears seemingly took later this year to mean September. However, the central bank was predictably vague. Others, however, speculated that before yearend might just as easily mean December. When that view starts to prevail, the buying of equities resurfaced. In the meantime, there was no mention of just how much of that $85 billion would be pared. The indication from the central bank is that the program will conclude by mid-2014.

The assumption in all this is that the economy, which grew at a restrained pace in the first half of this year, will continue to advance, and perhaps a bit more strongly, during the current six months. It should be noted that the Fed officials were less confident at their July meeting that growth would soon pick up than in June. Whatever the case, the Fed, as noted, was purposely unpredictable, and that was the cause, we think, of the frenetic action yesterday.

All told, following these back-and-forth moves, which was underscored by a 140-point intraday swing in the Dow Jones Industrial Average, that 30-stock blue chip composite ended proceedings down by 106 points, at 14,897, which was not quite at its session low, but close enough. The Standard and Poor's 500 Index closed 10 points lower, or within three and a half points of the day's low, while the NASDAQ ended off 14 points, at just under 3,600. At its worst levels of the day, the NASDAQ had been lower by almost 25 points. Among the bigger casualties were some basic materials stocks, including the beaten down fertilizer issues that are again trading down near their 52-week lows.

The Fed, meanwhile, was obviously the big story. But it was not the only news, as we saw a better-than-expected release on sales of existing homes, and some mixed earnings among the major retail chains for their July quarters. But such news had just fleeting impact on the market, as it was again all about the Fed.

Finally, after the close of trading, the final Dow-30 stock, Hewlett-Packard (HPQFree Hewlett-Packard Stock Report) issued its quarterly results and that uninspiring performance has pushed the stock notably lower in the pre-market this morning. Overall, though, our equity futures are poised to rebound nicely when trading gets under way this morning. – Harvey S. Katz 

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