After The Close - Stocks turned in a mixed performance to close out the week today, although the outcome was anything but a foregone conclusion. At the opening bell, investors seemed to take a weak employment report in stride, presumably on the thinking that it might deter the Federal Reserve from implementing a reduced stimulus package in the near term. But words at an international conference by Russia’s President Putin that his nation would help Syria if it were attacked by Western forces caused fears that thorny issues in the Middle East could get even worse, and that caused a noticeable selloff on Wall Street. At one point, the Dow Jones Industrial Average was down nearly 150 points.

Stocks recovered their losses by late morning, though, apparently as traders viewed the sharp drop as an overreaction. But sentiment weakened into the close, and the Dow lost 15 points, while the NASDAQ’s gains were trimmed to a single point. Market breadth was more positive, with advancing issues moderately topping decliners on the Big Board.

Supporting stocks was a drop in bond yields caused by the lackluster jobs report. The yield on the 10-year U.S. Treasury note had briefly topped 3.00% in the last day or so. But today the yield on that benchmark fell to 2.94%. That particularly helped stocks in the interest-rate sensitive utility sector, which had been notably hurt by the recent backup in bond yields. Shares of power companies, such as Con Edison (ED) and Exelon (EXC) turned in good performances for the session as a result.

Oil prices were another of the day’s features, rising about $2 a barrel, to more than $110. Fears of military action in the contentious Middle East have the market worried there is an increasing chance that supplies could be disrupted. Rising oil prices lifted energy-related stocks, including those of Schlumberger (SLB) and ConocoPhillips (COP). 

Among individual issues, shares of Facebook (FB) rose nicely in heavy trading on improved sentiment. American Tower (AMT) stock also rallied after disclosing a promising acquisition.

For the first week of September, stocks turned higher after a difficult August, in which the Dow lost 689 points, or 4.4%. The Dow regained the 15,000 mark for a while today, although it pulled back by the close. The change in tone versus August was good to see but, in the week ahead, the market will continue to face the concerns it has lately regarding Syria and possible changes in the direction of central bank policy.   - Robert Mitkowski

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


12:20 PM EDT - The U.S. equity markets have been giving investors a bit of a see-saw ride on the final day of the trading week. Stocks started the morning on the upside after a weaker-than-expected report on the U.S. labor market for August. Indeed, the numbers were disappointing on several fronts. To begin with, the 169,000 increase in nonfarm payrolls was lower than the consensus estimate. Moreover, the number of jobs created in June and July were revised downward by a combined 74,000 positions. And even the small improvement in the headline unemployment rate (7.3% vs. 7.4% for the previous month) was largely a negative, as it resulted from more individuals stopping their search for work.

As we’ve been conditioned to expect in recent months, traders responded favorably to the bad news, largely because it gives the Federal Reserve one less reason to be hasty or aggressive in tapering its market-friendly bond buying program.

The uptick in stock prices didn’t last too long or get very far, however, before Russian President Vladimir Putin pulled the rug out by announcing his country’s support for Syrian President Bashar al-Assad. The markets quickly reversed course sending equities to their lows for the morning just after 10:00 AM EST. The Dow Jones Industrial Average traced a 200-point decline from peak to trough, while the other major indexes followed suit.

But even this move was short-lived, as by the noon hour in New York, the Dow, S&P 500, and NASDAQ had all recovered their losses and were each showing a gain of about a quarter percent. Trading activity was similar on the European bourses. After steadily tracking just below the breakeven mark for most of their respective sessions, stocks in London, Germany, and France enjoyed a brief surge following the U.S. employment report, only to dip back into the red after Putin’s statement. France’s CAC-40, however, managed to rebound for a sizeable 1% advance on the session, while Germany’s DAX made do with a quarter-percent gain, and London’s FTSE ended the day essentially unchanged. -Mario Ferro

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


10:30 AM EST - The U.S. equity market, after starting the session to the upside on sentiment that an unimpressive report on August nonfarm payrolls may give the Federal Reserve some pause with regard to cutting back on its asset purchases, quickly reversed course following remarks by Russia’s President Vladimir Putin.

Specifically, Russia’s leader said that his country would support Syrian President Bashar al-Assad against any foreign attacks. The response by Mr. Putin comes as President Obama seeks Congressional approval to launch a limited airstrike against Syria. The bickering between the two world powers at the ongoing G20 summit in Russia has raised international tensions and roiled the world equity markets. Not surprisingly, the price of crude oil is rising on fears that any strike against Syria would possibly lead to a disruption in the world oil supplies, which could have far-ranging economic consequences.

Thus, now more than one hour into the new trading day, the Dow Jones Industrials, the NASDAQ, and the broader S&P 500 Index are trading notably lower, with the Dow 30 at one point down triple digits this morning. From a sector perspective, all of the economically sensitive sectors are trading in the red, with the exception of the aforementioned oil stocks. Conversely, the more defensive-oriented issues are in demand. The higher-yielding consumer staples, telecom, and utilities issues also are benefiting from the pullback in interest rates following the dull labor market report. Stay tuned.   – William G. Ferguson

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- It will be interesting to see how investors react to this morning’s unimposing report on employment and unemployment for the month of August. Specifically, the nation added a less-than-expected 169,000 positions last month and the unemployment rate was little changed at 7.3%. The Labor Department’s report also showed a downward revision in jobs creation for the prior two months. Wall Street has been keeping a close eye on labor market conditions, in an effort to gain some clarity on the Federal Reserve’s next monetary policy move.

In the corporate sector, shares of J.C. Penny (JCP) are likely to remain active, as news has emerged that the retailer will be dropping its Martha Stewart line of goods due to disappointing sales trends. Elsewhere, firearms maker Smith & Wesson (SWHC) is likely to be heavily traded after it released soft guidance for the current quarter.

Meanwhile, there has been some noise on the acquisition front. Private equity firm KKR & Co. L.P. (KKR) is on the verge of gaining preferential negotiating rights for a majority stake in Panasonic’s healthcare unit. The deal is said to be worth roughly $1.5 billion. Also, Timken (TKR) announced that its board of directors has given it the green light to split its steel business from its bearings and power transmissions operations. Plus, rumor has it that GlaxoSmithKline (GSK)  is in talks to sell certain brands to Japan’s Suntory Beverage & Food for roughly $1.6 billion.   - Andre Costanza

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


Before The Bell - The bulls made it three consecutive winning days on Wall Street. However, yesterday’s performance was not very decisive and a far cry from Wednesday’s outsized gains. All told, the Dow Jones Industrials, the NASDAQ, and the broader S&P 500 Index finished the session relatively flat and the advancers/decliners data suggested that it was a mixed showing. In fact, falling stocks slightly led risers on the New York Stock Exchange.

Overall, the major equity averages did not stray too far from the neutral line at any time during the unexciting session. There appeared to be a good deal of hesitation ahead of today’s much-anticipated report on the U.S. labor market (see below). Also, the positive report on the services sector—nonmanufacturing activity surged in August—caused investors to pause, as the continued positive economic data may prompt the Federal Reserve to taper its aggressive asset purchases, which have flooded the markets with cash in recent years. Historically, a tightening of monetary policies are not viewed favorably by market participants.

The growing sentiment that the central bank will announce some kind of reduction in its monthly bond purchases is driving interest rates higher, which have been on a steady rise since Federal Reserve Chairman Ben Bernanke hinted in late May that a tapering in asset purchases is likely before the end of this year. In fact, the yield on the benchmark 10-year Treasury note currently stands a few basis points shy of 3.00%. The subsequent higher lending rates are making fixed-income securities more attractive options than more risky higher-yielding equities. This is prompting some sector rotation, which was once again on display yesterday. The higher-yielding consumer staples, telecom, and utilities issues were out of favor yesterday. At the same time, investors, unnerved by the ongoing situation in Syria and the uncertainties regarding the Federal Reserve’s next monetary policy move, sought the defensive-oriented healthcare issues . Too, the aforementioned concerns about Syria and possible disruptions in the world oil supplies if a Western-led attack on the nation were to take place is pushing crude prices and oil stocks higher.

Meanwhile, trading overseas thus far today seems to be mirroring yesterday’s dull U.S. session. Asia’s major equity indexes finished the trading week on a mixed note, while the European bourses entered the second half of the trading day on the Continent not too far removed from the neutral line. International investors also seemed to be showing some hesitation ahead of this morning’s U.S. labor market report.

That said, just a few minutes ago, the investment community received the latest monthly report on the U.S. job market. Specifically, the Labor Department reported that total nonfarm payroll employment increased by 169,000 in August, and the unemployment rate was little changed at 7.3%. At first blush, the unimposing rise in jobs raises some questions about just how much bond buying tapering, and at what point, the Federal Reserve will begin to step on the monetary policy brakes.     

With less than an hour to go before the commencement of trading on these shores, the equity futures are presaging a higher opening for the U.S. equity market. The latest jobs report seems to have many investors, at least for the moment, thinking that the Federal Reserve will err on the side of caution with regard to cutting back on its stimulus measures. In the same vein, the rate on the benchmark 10-year Treasury note is falling on the unimposing report on the labor market. Stay tuned. – William G. Ferguson

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