After The Close - The new trading week got off to a terrific start today, with the all the major equity indexes building off last week’s success. Pushing the key averages higher were uplifting economic data from China and Japan, some merger and acquisition news on these shores, growing sentiment that a Western-led attack on Syria may be avoided, and some thoughts that last week’s uninspiring report on the labor market may delay or reduce an expected tapering in bond buying.

At the closing bell, the Dow Jones Industrial Average, the NASDAQ, and the broader S&P 500 Index had added 141, 46, and 17 points, respectively. Even more encouraging was the more pronounced advances by the small-cap Russell and the S&P Mid-Cap 400 Index, which suggested that investors were increasing their appetite for risk yet again. Overall, advancing issues were well ahead of decliners on both the New York Stock Exchange and the NASDAQ.

From a sector standpoint there was a lot to like, as each of the 10 major groups moved higher. Leadership came from the most economically sensitive areas, with the basic materials and industrial stocks in demand. Those sectors got a boost from some positive economic data out of Asia, particularly China. Specifically, China’s government reported that Asia’s powerhouse exported more goods than expected in August and that consumer inflation held steady for the world’s second-largest economy. Meantime, the more defensive-oriented groups, though finishing in positive territory, were not as much in demand, as investors’ fears about Syria and the Federal Reserve’s next move have eased a bit, at least for the moment.

As noted, investors are showing a bit more willingness to add some more risk to their portfolio after a stretch where fears about the Federal Reserve’s monetary policies and the possibility of an imminent attack on Syria created a good deal of volatility in the market. In fact, the S&P 500 Volatility Index (or VIX) –which is often referred to the fear gauge—after hitting 17 on the final day of August, has been on a steady decline in recent sessions. In addition to some of the easing concerns about an attack on Syria, we sense that investors are becoming a bit more encouraged about the near-term economic outlook. Two multibillion deals in the corporate world—Koch Industries announced plans to buy electronic connectors maker Molex (MOLX) for $7.2 billion, while Ares Management and the Canada Pension Plan Investment Board agreed to buy U.S. retailer Neiman Marcus for $6 billion—may be an indication that the economic and business climate is improving. It appeared to give a further boost to market confidence today.

For the most part, the global economy is showing signs of improving. The U.S. economic data have been uplifting in recent weeks, save for last week’s unimposing report on job creation; China’s economy is showing some signs of picking up; and the IMF recently raised its economic outlook for the ailing euro zone, but did warn that problems still exist for the 17-nation federation. That said, we are not ready to suggest that clear sailing lies ahead for equities, given that at any moment the still-contentious situation in the Middle East, the possible trimming of stimulus by the Federal Reserve as early as next week at its FOMC meeting, and the still to be revisited debt-ceiling debate on Capitol Hill have the potential to rattle the markets.

Looking ahead to the remainder of the week, it will be a light on economic news, with the exception of this Friday when we will receive reports on producer prices, consumer sentiment, and retail sales. The last report, in particular, will be closely watched by the Federal Reserve for more clues about how the U.S. economy is doing ahead of next week’s two-day monetary policy meeting. The Federal Reserve’s next monetary policy move has been a hot-button topic for investors since late May, and very well may be so once again next week.   - William G. Ferguson 

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


2:45 PM EDT -  The stock market, higher all session, has gotten a second wind, and is strengthening notably as we reach the mid-afternoon hour on the East Coast.

Thus, buoyed by upbeat economic data out of China, the world's second largest economy, and further emboldened by a succession of corporate deals and diminishing fears about an imminent strike by the West against Syria, the stock market is moving broadly and sharply higher at this hour.

All told, as we get under the 90-minute mark of the remaining trading day, we find that the Dow Jones Industrial Average is ahead by 157 points, putting that 30-stock blue-chip composite right on the cusp of the day's high and over 15,000 once again. Also pressing higher aggressively is the Standard and Poor's 500 Index, which is up 17 points, and the NASDAQ, which is ahead by 46 points. Moreover, winning stocks are swamping losing issues to the tune of better that three-to-one on the Big Board and by almost that ratio on the NASDAQ.

As to China, news this morning came out that the nation's total exports in August was easily above expectations, a trend that seems to be consistent with the generally improving tone of business around the globe.

Finally, earlier fears about the Federal Reserve may be starting to selectively ease, as a consensus appears to be building that the lead bank will start to taper its bond buying very cautiously and slowly, and perhaps as early as next week's FOMC meeting. - Harvey S. Katz

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


12:20 PM EDT - The U.S. stock market is putting in another constructive session today, as it extends last week’s gains. The fact that the market has managed a sustained move up, without selling off, suggests some support for equities at this level. As we pass the noon hour in New York, the Dow Jones Industrial Average is up 124 points; the broader S&P 500 Index is ahead 13 points; and the NASDAQ, which is again showing leadership, is up 35 points. Market breadth is positive, as advancers are outweighing decliners by about 3 to 1 on the NYSE. All of the market sectors are moving higher today, with leadership in the basic materials, as the metals and mining stocks are moving higher. Notably, this group has been rallying lately, after falling out of favor earlier. The technology sector, too, is advancing, helped by the semiconductors. The energy issues are also doing well, thanks to strength in the oil and gas services and distribution names. The utilities, which have put in an unimpressive performance over the past few months, continue to underperform.

Technically, the S&P 500 Index is now back at its 50-day moving average located at about 1,665. This is likely a critical area for technicians, who will be watching to see if this broad index can make a sustained move up from here.

Investors received no notable economic reports today. Tomorrow will also be a light day for reports. In the corporate arena, things have been a bit busier, with a bit of merger and acquisition news on the docket. Of note, Molex (MOLX) stocks is surging after the technology company agreed to be purchased by Koch Industries. In the drug area, shares of Isis Pharmaceuticals (ISIS) are trading sharply higher, as that company has agreed to form a strategic collaboration with Biogen Idec (BIIB).

The United States stock market is likely reacting to a good showing overseas. For example, the markets in Asia put in a strong session. China’s Shanghai Composite was up sharply on healthy economic data. Japan’s Nikkei, too, put in a solid advance. This has likely helped offset concerns surrounding the ongoing debate about a possible strike against Syria. That action, at this point, seems to have limited support abroad and a paucity of enthusiasm at home. - Adam Rosner

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 SurveyCorporate news is rather light this morning, but there was some M&A activity over the weekend. Indeed, shares of Molex (MOLX) are surging ahead of the bell, after the electronic component manufacturer agreed to be acquired by privately-held Koch Industries for $38.50 a share in cash. Elsewhere, drugmaker GlaxoSmithKline (GSK) has struck a deal to sell two of its soft drink brands, Lucozade and Ribena, to Japan-based Suntory Beverage & Food for roughly $2.1 billion. The move is part of Glaxo’s broader effort to divest noncore assets and concentrate on its drug business. GSK stock is indicating a slightly lower opening this morning. – 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 - Wall Street limped to a mixed close on Friday in a low-volume session that featured a pedestrian jobs report and volatile equity trading that wound up with just scant aggregate moves in the leading market averages.

Specifically, the Labor Department reported that the nation had added 169,000 jobs in August, a little less than forecast, while job growth totals for June and July were revised downward by a combined 74,000. Also, according to the report, a good number of the payrolls that were added were in low-paying jobs that some of the unemployed might be taking just to tide them over temporarily. In any event, the figures did not cheer anyone.

At the same time, the unemployment rate, which is compiled in a separate survey by the Labor Department, eased back slightly to 7.3%. But this apparent good news was partly the result of many jobless workers leaving the workforce; that is, they are no longer actively looking for employment, and are thus not considered as unemployed.

The possible good news for some Wall Street watchers is that this uninspiring employment data may encourage the Federal Reserve to hold off on any tapering of its bond-buying activity when it meets next week, or if it does opt to slow down the purchases, it will do so at a very modest and deliberate pace.

Meanwhile, a new week now dawns, and it will be a very slow one for economic news, especially early in the week. To wit, there are no reports of any note either today or tomorrow, while Wednesday will feature only data on wholesale inventories, where a small increase is expected for July following a dip in June. More current information will be issued on Thursday, when we will see the issuance of reports on import prices, the Treasury budget, and initial and continuing jobless claims. Finally, on Friday, we are due to receive data on retail sales for August and producer, or wholesale, prices for that same month. The final release that day is scheduled to be the consumer sentiment survey from the University of Michigan.

Earnings data, too, will be sparse, and not only has the mass of data for the calendar second-quarter companies been released at this time, but even most retailers already have reported their figures for the July-ending three months.

So, the emphasis in the days to come will be on the Federal Reserve, as the lead bank prepares for its September 17th and 18th FOMC meeting and any action on the monetary front. At the same time, Wall Street will be focusing on the situation in Washington where debates and votes will be taken on whether or not this nation will opt for a military strike against Syria. Also, the speculating on who will succeed Ben S. Bernanke as the new Chairman of the Federal Reserve will continue. No decision is expected on that score for some weeks.

As to the day ahead on Wall Street, the equity futures are now pointing to a modestly higher start to the day when trading begins in less than an hour from now. – Harvey S. Katz     

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