After The Close - The good times continued for investors on Wall Street today, with many of the same catalysts behind yesterday’s advance once again front and center. Specifically, the investment community took comfort in some more favorable economic data from China and growing sentiment that a U.S.-led attack on Syria may well be avoided. President Obama will address the nation tonight about Syria at 9:00 P.M. (EDT). At the closing bell, the Dow Jones Industrials, the NASDAQ, and the S&P 500 Index were up 128, 23, and 12 points, respectively. Overall, advancing issues led decliners by a comfortable margin on both the Big Board and the NASDAQ—but not by as large a differential as yesterday.
As noted, the day’s big news was a report that Syria’s government would agree to relinquish its chemical weapons to the international community if the United States pursued a diplomatic solution instead of using force against the war-torn nation. Growing sentiment that a worst case scenario may be avoided comforted investors, which, in turn, pushed stocks higher and weighed on oil and gold prices. Crude oil prices have jumped in recent weeks—and probably would have done so today on the strong economic data from China, if not for the Syria news—on concerns that an attack on Syria might lead to disruptions in the world oil supplies. All told, crude prices were down more than 2% on the New York Mercantile Exchange.
Also propelling equities higher today was some encouraging economic news from Asia. Specifically, China reported that industrial production surged 10.4% year-over-year last month. Investors were also pleased to learn that the latest Bank of Japan minutes suggested the central bank there will stay on its current accommodative monetary course. These reports pushed Asia’s major indexes higher overnight and had a positive effect on the European and U.S. equity markets.
From a sector perspective, leadership once again came from the industrial stocks, which should not have come as a surprise given the strong report overnight on China’s industrial production. There was also some buying of the consumer discretionary issues, with some of the encouraging news about the global economy likely behind the interest in that economically sensitive sector. (Investors should note that trading of the consumer discretionary names could pick up considerably at the end of the week, with reports due this Friday on retail sales, producer prices, and consumer sentiment.) Meantime, some initial profit taking in the basic materials and the energy sectors, with the latter likely fueled by the aforementioned Syria news, gave way to some renewed buying by the closing bell.
On an individual basis, shares of chipmaker ARM Holdings (ARM) jumped after technology behemoth Apple (AAPL) revealed that ARM has supplied the processor for the new iPhone models. However, shares of Apple did not get the same pop, retreating after the company unveiled two new IPhone models, including a more cost-friendly version, at an Apple event earlier today. There was also some other big names in the news today, as reports surfaced that after the close of trading on September 20th, the stocks of Nike (NKE), Goldman Sachs (GS), and Visa (V) will replace Bank of America (BAC - Free Bank of America Stock Report), Alcoa (AA - Free Alcoa Stock Report), and Hewlett-Packard (HPQ - Free Hewlett-Packard Stock Report) in the Dow Jones Industrial Average. Trading volume of these stocks will likely get a boost around the effective date due to some portfolio rebalancing of funds that mimic the index of 30 bellwether companies. - William G. Ferguson
At the time of this article’s writing, the author did not have positions in any of the companies mentioned
12:35 PM EDT - The U.S. stock market opened higher this morning, and is currently holding these gains. As we pass the noon hour in New York, the Dow Jones Industrial Average is up 100 points; the broader S&P 500 Index is ahead nine points; and the NASDAQ is adding on 15 points. Market breadth is favorable, with advancing issues ahead of decliners by about 2 to 1 on the NYSE. Most of the market sectors are advancing today. There are gains in the industrials, as the electrical equipment makers are doing particularly well. The financial issues are also making strides, with gains in the large banks. In contrast, the energy stocks are showing some weakness, with slight setbacks in the oil and gas issues. The price of crude oil is off over 2%, to about $106 a barrel, and that may be playing a role here.
Technically, yesterday’s up move put the S&P 500 Index back above its 50-day moving average, located at about 1,665. The fact that the index is extending that move today, is a positive indication. Many stocks have firmed up over the past several sessions, along with the broader market averages. Notably, there are about 260 stocks at new highs on the NYSE, versus 110 at new lows. The figures are much more impressive on the NASDAQ, with 170 new highs and only 17 new lows.
The economic news was minimal today. Tomorrow, will be a light day too, as the lone item out will be a report on wholesale inventories for July. Thursday will be a much busier day, as the weekly initial and continuing jobless claims are due to be released. We will also get a look at export and import prices for the month of August.
In the corporate arena, things have been quiet, too. Nonetheless, shares of PVH (PVH) are trading lower after the apparel maker posted decent quarterly figures, but issued disappointing guidance. The big news of the day is likely the reshuffling of the Dow Jones Industrial Average. No doubt, the trio of the new members took some by surprise.
The United States stock market continues to get help from strength overseas. The markets in China have been up lately, on a series of better-than-expected economic reports, and that is likely helping the sentiment here at home. Meanwhile, plans for a strike against Syria seem to be on the back burner for now, as an effort to get that country to relinquish its chemical weapons seems to be emerging. -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 Survey – Investors will certainly have their eyes on Apple (AAPL) today, as the computer and personal electronics giant is expected to unveil an updated iPhone 5, as well as a cheaper version of the device aimed at emerging markets, at an event at 1:00 P.M. EDT. On the earnings front, shares of Five Below (FIVE) are up sharply ahead of the bell, after the discount retailer delivered better-than-expected July-period results. On the other hand, the stock of PVH Corp. (PVH) is indicating a modestly lower opening this morning. The apparel company has reported solid July-period results, but its outlook fell short of investors’ expectations. – 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 - The buyers returned to the fray en masse yesterday, and did so in a very big way, enabling Wall Street to get the new week off to a rousing start. In fact, unlike many previous sessions, in which an up-and-down trading pattern was the rule, the most recent day's fireworks started at the outset. In fact, the bulls led wire to wire, finishing up relatively close to their best levels of the day.
Behind the heroics, which saw the Dow Jones Industrial Average soar 141 points; the Standard and Poor's 500 Index rise 17 points; the NASDAQ jump 46 points; and the small-and-mid-cap indexes do even better, was a series of positive events, starting out with a better-than-expected performance on the export front by China, the world's second-largest economy. Armed with that encouraging development, which largely follows the economic lead of our other trading partners, including a number of nation's in the embattled euro zone, the equity market quickly roared to a sizable early gain. Then, after hanging in there for a time with the Dow up around 100 points, the index took another leap forward, and by the mid-afternoon had jumped to a gain of better than 160 points. It then did not stray too far from its lofty perch above 15,000, while advancing issues easily outdistanced losing stocks on both the Big Board and the tech-heavy NASDAQ. Particular strength was noted, meantime, in the shares of economically sensitive basic materials companies.
Of course, the better news out of China wasn't all that Wall Street had going for it in the latest session. Of note, another day has passed without a strike by the West against Syria; there was a series of corporate deals announced, which normally brings out the bulls; and there appeared to be some acceptance evolving that the Federal Reserve would opt to trim its bond-buying program only modestly, and perhaps by as early as next week's FOMC meeting. Fears of a more aggressive tapering seemingly have eased, and that is reassuring investors at this time. Of course, much could happen between now and next week's meeting. For now, however, a sense of monetary calm has come over Wall Street.
This latest advance, meanwhile, made it five straight sessions in which the Standard and Poor's 500 Index has advanced, lifting the index by nearly 2% in the process. Along with the higher stock prices, investors were encouraged by the drop in bond yields. Rising yields had been instrumental in bringing out the bears, at least selectively. All told, the yield on the 10-year Treasury, which had jumped to an even 3.00% late last week, eased back to just below 2.90% in action yesterday, while the yield on the companion 30-year Treasury bond fell back to 3.84%, after a brief move up to 3.93% last week. However, yields are back up somewhat this morning.
Now, a new day is upon us and once again the news out of China is upbeat and this is encouraging the buyers once again. Of note, economic data out of the world's fast-growing economy showed stronger-than-expected industrial output and retail sales. This quickening pace of improvement is helping to ease fears about that economic behemoth. It now seems as though China's economy may be stabilizing after slowing for more than two years. Armed with these better metrics, stocks in Asia overnight rose to a three-month high, while shares in Europe are climbing this morning.
Of course, China is not the only good news for skittish investors. There are also increasing signs that there may not be military action against Syria at this time, after there was some apparent diplomatic breakthrough in the pending crisis, after Russia, Syria's ally, suggested that Damascus hand over its chemical weapons for destruction. We will see where this all goes. For now, though, such tidings along with the aforementioned economic developments in China are pushing our equity futures up sizably, presaging a strong opening for Wall Street when trading resumes in less than an hour form now. – Harvey S. Katz
At the time of this article's writing, the author did not have positions in any of the companies mentioned.