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After The Close - The U.S. stock market opened notably lower, but managed to partially reverse direction and control its losses. Much of the weakness in the market today was a reflection of developments overseas. To wit, overnight Asia’s markets declined on concerns about weakness in the banking industry in China. Traders also became fearful that China’s central bank may become less accommodating, as it makes an effort to control inflation. The European markets were largely lower, too, which further set the stage for weakness stateside. However, even though the opening was difficult, things did not go so badly, as the bulls helped support equities about halfway through the day. Buying on weakness has been a hallmark of this bull market, and suggests that sentiment has not yet turned too negative.

At the end of the day, the Dow Jones Industrial Average was off 54 points; the S&P 500 Index was lower by eight points; and, the NASDAQ, which was the weakest of the major averages, ended off 22 points. There was a mixed, rather than decidedly negative, tone to today’s trading, as declining issues only modestly outnumbered advancers on both the NYSE and the NASDAQ. Nonetheless, some sectors, in particular, encountered selling. There were notable losses in the basic materials stocks. The energy names, too, were off sharply, as the price of crude oil dropped over 1%, to just below $97 a barrel. In contrast, investors, possibly turning more defensive, looked for safety in the high-yielding utility issues. The healthcare names, which can also be somewhat defensive, also held up relatively well.

Technically, the S&P 500 Index, after logging a dramatic series of daily advances, pulled back a bit today. The move down puts the broad index below the 1,750 mark. It is not unusual, and probably even healthy, for the market to consolidate its recent gains, as this allows some traders to take profits, and reposition their holdings. 

Traders received a few economic reports this morning, but this probably did little to move the markets. Specifically, export and import prices rose slightly in September from August. Also, the FHFA Housing Price Index gained slightly in August.

For now, the third-quarter earnings reports continue to dominate the news. For the most part, the news was mixed today. Some technology issues posted weak results. Shares of Cree (CREE), which is a widely followed semiconductor name, fell sharply on concerns about its outlook. Broadcom (BRCM) stock also sank, after that company lowered guidance. However, things went quite a bit better for Corning (GLW), as that stock rose on news that it will be acquiring additional business from Samsung. Elsewhere, we received generally favorable reports from Boeing (BA) and Northrop Grumman (NOC). But, Caterpillar (CAT - Free Caterpillar Stock Report) disappointed investors and that stock traded sharply lower. - Adam Rosner

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

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12:15 PM EST - The major U.S. equity averages are notably weaker as we approach the midday hour on the East Coast. The selling, which has been in vogue since trading commenced on these shores and was notable overseas earlier today, was likely prompted by financial concerns out of China and some mixed earnings news stateside (more below). We also sense that the market—which was seen the Dow Jones Industrial Average move higher in recent days; the S&P 500 put in a succession of new highs; and the NASDAQ perform very well in October (save for yesterday and today) on the strength of that composite’s technology stocks—has brought out the profit takers in a market where valuations are a bit frothy.

At just past the noon hour, the Dow Jones Industrial Average, the tech-heavy NASDAQ, and the S&P 500 Index are showing respective declines of 59, 28, and nine points, though each index is off of its earlier lows. The selling was been just as pronounced, and even more so in some cases, in the small- and mid-cap markets. Investors are showing some hesitation in adding more risk to their portfolios. In addition to the aforementioned selling, we are seeing more desire for safe-haven fixed income securities. In fact, the yield on the benchmark 10-year Treasury note, which moves in the opposite direction to the price, has fallen below 2.50% today. The S&P 500 Volatility Index (or VIX), which is also known as the “fear gauge”, also spiked a bit this morning, and is now around 14, which is still a low reading.

From a sector perspective, the biggest laggards thus far are the energy, basic materials, and technology groups. Conversely, probably to no surprise given the elevated skittishness investors are showing today, the more defensive-oriented sectors are in favor, with the utilities issues showing the biggest gains. In addition to the level of safety that comes with a position in the utilities, the stocks are looking more attractive to income-oriented investors, with the yields on fixed-income instruments falling since the temporary fiscal deal on Capitol Hill was struck last week.

Meantime, we did get some mixed earnings news this morning. On the bright side was a good report from aerospace giant Boeing (BA - Free Boeing Stock Report). That report was offset by a very disappointing showing from Caterpillar (CAT - Free Caterpillar Stock Report), which reported a third-quarter earnings decline of 44% and it cut its forecast again. The heavy equipment maker said revenues will be almost $11 billion (or 17%) lower than last year, mostly due to a decline in its mining gear business. The stocks of the two Dow-30 companies are heading in opposite directions today. Likewise, other stocks that are being heavily influenced by their companies’ latest quarterly results include Cree (CREE), Lumber Liquidators (LL), Owens Corning (OC), and Omnicare (OCR). The earnings news has had the spotlight on a light day for economic reports.

Looking ahead to the second half of the trading day, if we have learned anything over the last month, the possibility of sharp change in the direction of trading can never be ruled out. That said, given the aforementioned mixed earnings news on these shores and the worries about China, it seems like it will take a lot to knock the bears out of the catbird seat today. Investors should note that several companies are scheduled to report their latest quarterly results after the closing bell, including Dow-30 component and telecommunications giant AT&T (T - Free AT&T Stock Report). - William G. Ferguson

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 Survey With earnings season in full swing, a couple of companies have reported third-quarter results this morning. Two Dow components, aerospace and defense giant Boeing (BA - Free Boeing Stock Report) and mining equipment maker Caterpillar (CAT - Free Caterpillar Stock Report), have released September-period earnings today. Boeing shares look to perk up on the better-than-expected metrics, while Caterpillar stock is suggesting a notably weaker opening. Elsewhere, beverage distributor Dr. Pepper Snapple (DPS) posted a decent bottom-line performance despite a slight sales miss, and office REIT ProLogis (PLD) reported in-line results. – Sharif Abdou

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 stock market broke out of its one-day lethargy yesterday and resumed its long track higher, rising on a weaker-than-forecast jobs report (which is likely to keep any tapering talk by the Federal Reserve at bay for a while) and some reasonably good results on the profit front.

Specifically, the Dow Jones Industrial Average, which led the way for much of the session yesterday, finally ended up by 75 points, while the Standard and Poor's 500 Index rose 10 points, establishing another all-time high in the process. The NASDAQ, heretofore leading the large-cap pack for the year, also edged up 10 points, a smaller percentage gain than for either of the aforementioned composites, being held in check by some selective weakness in the tech sector. The small- and mid-cap indexes inked modest gains, in the meantime, as winning stocks easily outdistanced losing issues on the Big Board. Interestingly, the S&P 500 Index has hit a succession of record highs in recent days, while the Dow has not. That dichotomy could be of some import to technicians should the stock market falter some in the coming days.   

As to the news backdrop, which helped the market stage another rally, especially early in the day, the Labor Department reported that the nation added just 148,000 jobs in September, some 18% less than the 180,000 estimated, while the jobless rate ticked down from 7.3 to 7.2%. But this latter tally was of little consolation for those looking for an improving unemployment trend, as there was no increase in the aggregate labor force. We think it will be some months before job creation is sufficiently strong to lower the unemployment rate to below 7% on a sustainable basis. 

As to earnings, they continue to hold their own, with a trio of Dow components yesterday issuing decent, but not confidence-building, top- and- bottom-line results. Overall, reporting season has been sufficiently benign for stocks to continue rising, especially now that the Washington beat has quieted down after the tense budget and debt-ceiling goings on earlier this month. Among key sectors in the market yesterday, we saw rare strength in the basic materials names, notably the metals and mining group,  a few steels, and the aluminums, where erstwhile Dow component Alcoa (AA) rose to a 52-week high. Freeport-McMoRan (FCX) stock, meantime, did well on earnings news. And the earnings beat will continue over the balance of the week, with a number of Dow companies yet to report, as well as other big names. 

Now, a new day is upon us and the bears are out in force for a change, at least so far today. To wit, there were some financial concerns out of China, which caused money rates to climb overnight. It seems as though the world's second-largest economy's rapid growth is stoking some inflation fears. Not surprisingly, shares in Asia were notably weaker overnight, while the bourses are off sharply in Europe so far this morning. And over here, the S&P 500 Index futures are now off by seven points, while the NASDAQ futures are lower by 14 points. Bonds are strengthening, however, with the yield on the benchmark 10-year Treasury down to an even 2.50% this morning. Finally, on the earnings beat, Dow-30 component Boeing (BA - Free Boeing Stock Report), the giant aerospace manufacturer posted better-than-expected metrics, and that stock is indicating a strongly higher opening, thereby presaging its hitting another 52-week high 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.