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After The Close - The major U.S. equity indexes did not stray too far from the neutral line today, after a brief attempt to move definitively into the black fizzled out in the afternoon. To wit, there appeared to be some hesitation among investors to make any major moves ahead of the Federal Reserve’s two-day monetary policy meeting that commences tomorrow and some noteworthy earnings and economic news to come later this week (see below). The Dow Jones Industrial Average and the  NASDAQ both finished just slightly in the red, losing one and three points, respectively, while the S&P 500 Index closed up a mere two points in a trading session that had a selectively negative undertone to it. On point, there was some mild selling in both the small- and mid-cap markets, but even those groups finished just narrowly in the red. Overall, declining issues led advancers on both the Big Board and the NASDAQ.

From a sector perspective, leadership came from the consumer staples group. Within the consumer noncyclical area, the stocks of the non-alcoholic beverage, personal care products, and retail drug companies were scooped up by investors. There was also some mild buying interest in the healthcare sector today, although the shares of drugmaking giant Merck & Co. (MRK -Free Merck Stock Report) were lower after the company reported its latest quarterly results. Merck’s rival Pfizer (PFE - Free Pfizer Stock Report) is scheduled to report earnings tomorrow. The healthcare space got a boost from the stock of Bristol-Myers Squibb (BMY), which jumped after the pharmaceuticals giant reported promising results from its lung cancer treatment over the weekend.  The consumer staples line was the only group among the top-10 sectors to make any notable move in this uneventful trading session.

On the earnings front, the day’s most anticipated report is yet to come. Specifically, investors are waiting anxiously for the latest results from technology behemoth Apple (AAPL), which were due after today’s close. In particular, investors will be keying on the company’s December-quarter guidance. Shares of Apple were up modestly ahead of the release, which lent some support to the technology stocks and offset weakness in the shares of Facebook (FB) and Netflix (NFLX)—the latter two issues have performed very well, though, this year. Investors should also note that we will get quarterly results from four more Dow-30 companies this week, including the aforementioned Pfizer and oil giant Exxon Mobil (XOM - Free Exxon Mobil Stock Report).

This week also will bring some very important reports on the economy, including data on retail sales, producer prices, and consumer confidence—all three reports are due tomorrow—and the first look at third-quarter GDP on Wednesday. In the meantime, the busy week got off to a mixed start. On the plus side was a selective better reading on industrial production and capacity utilization. Specifically, the nation's factories turned out more goods than expected in September, as delayed data from the Commerce Department showed that industrial production rose by 0.6% last month in the aggregate. That was 0.2% above expectations. It also was the best increase in this category since February, when output had climbed by 0.7%. That report was somewhat offset by disappointing data on the housing market. This morning, for example, we learned that pending home sales had fallen 5.6% in September, which marked the biggest drop in three years. The weak housing data weighed on the homebuilding stocks in the latest session.

Looking ahead to tomorrow, investors will have a lot to digest on both the economy and earnings. However, we would not be all that surprised if the trading was pretty selective, as traders may still be in a wait-and-see mode ahead of Wednesday’s announcement from the Federal Reserve. That said, investors may want to keep a close eye on the technology and consumer discretionary sectors. The Apple report could drive trading in the technology space, while the aforementioned reports on retail sales and consumer confidence may Impact the consumer cyclical stocks.   - 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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12:30 PM EDT - The U.S. stock market had traded lower this morning. However, the major averages are now off their session lows, and even advancing selectively, which is encouraging for those long equities. Hopefully, we will see the bulls continue to support equities, as they have so often in the past. At just past noon in New York, the Dow Jones Industrial Average is up seven points; the S&P 500 Index is ahead three points; and the NASDAQ, which is lagging a bit today, is off four points. Market breadth still suggests a slightly negative bias to the session, as declining issues are outnumbering advancers on both the NYSE and the NASDAQ. The major market sectors are also still mixed. There is strength in select consumer names, and the healthcare issues are doing well, with particular leadership in the medical supplies area. Nonetheless, there is weakness in the basic materials issues, and some of the industrials are also trading lower.

Technically, the S&P 500 Index remains at high ground. After the large runup in price that started in early October, market conditions may now be somewhat “overbought”. However, it is important to note that exuberance can continue for quite some time, especially if corporate earnings and economic releases continue to impress. The VIX is trading slightly higher today, but the current reading of 13.52 is still low, relative to more normalized readings.

The economic reports released this morning were mixed. For one, pending home sales slipped 5.6% in September. This showing, which was worse than widely expected, follows a 1.6% decline in August. This report was partially offset by decent news elsewhere. Specifically, industrial production increased 0.6% in September, which was up slightly from the August reading, and also ahead of the consensus view. Tomorrow brings a batch of widely-watched issuances, such as retail sales, producer prices, business inventories, and consumer confidence.

Meanwhile, the corporate earnings news was not too impressive this morning. Shares of Merck (MRK Free Merck Stock Report) are lower after the drug giant issued disappointing results. Things went a bit better for Biogen (BIIB), as that stock is up on a strong issuance. Also in the drug area, shares of Dendreon (DNDN) are trading higher on news that the company may be seeking strategic alternatives. -  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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Stocks to Watch from The SurveyEarnings season continues, with drugmaker and Dow-30 component Merck (MRK - Free Merck Stock Report) leading the charge this morning. The company’s third-quarter earnings were better than expected, but investors looked past the headline number and appeared to take issue with the top line and sales of diabetes treatment JANUVIA. The stock is trading modestly lower ahead of the bell as a result. Other stocks indicating lower openings this morning on earnings news include China-based Internet company Sohu.com (SOHU), pipeline operator Boardwalk (BWP), and medical supplies company Edwards Lifesciences (EW), with SOHU showing the most weakness. Conversely, investors appeared pleased with quarterly financials from restaurant operator Burger King (BKW), and that stock is up modestly in pre-market trading. Elsewhere, shares of Dendreon (DNDN) are soaring ahead of the bell, on reports that the biotech company may be putting itself on the auction block. – 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 ended a busy and quite rewarding week this past Friday on a quiet and unassuming note, with the key equity averages mostly moving in modest increments, but doing so largely to the upside throughout the day. The main catalyst here was earnings, and there was no shortage of good reports coming in as reporting season remains at peak levels. The best news of the day, in the meantime, seemed to come out of the tech area (see below). As to specifics, the Dow Jones Industrial Average, helped nicely by a late buying burst, climbed 61 points to end the day at just over 15,570; the Standard and Poor's 500 Index added eight points, thus putting that composite at a record 1,760; and the tech-heavy NASDAQ tacked on more than 14 points. Interestingly, the principal small- and mid-cap indexes were mixed and the advance-decline line was nearly at a standoff, suggesting that some fatigue may be starting to creep into the market after this long and unrelenting run to higher ground.

Of note on this score, the day's trading was influenced by a pair of high-profile names that are domiciled on the NASDAQ, namely, Dow-30 component and software making giant Microsoft (MSFTFree Microsoft Stock Report), which beat on both the top and the bottom lines, and on-line retailer Amazon (AMZN), which outdistanced expectations on the revenue line, but continued to produce the modest flow of red ink in the latest quarter that had been expected. Still, the overall good news from Microsoft and the surge in revenues at Amazon were sufficient to push those stocks aggressively higher, with Microsoft barely missing a new 52-week high, but Amazon making one with plenty to spare.

On the whole, the stock market is now earnings driven, and it will likely continue to be so for another couple of weeks, as quarterly reports are coming in at a fast and furious pace, with this coming week alone scheduled to see almost a quarter of the Standard and Poor's 500 companies issue their metrics. Moreover, economic news has been uneven, with a few reports, which had been delayed by the earlier partial government shutdown, now coming across the tape. For the most part, such releases have not been market moving, with few surprises of note.  

Meanwhile, the focus on fundamentals should continue in the week ahead, as the next installment of the budget and debt-ceiling debates are still weeks away; earnings news will again be hot and heavy; and there will be no shortage of economic news, as both government and private-sector reports are due out.

Of greatest import, we expect to see releases of data on retail spending, housing starts, building permits, and consumer confidence, with this last release coming not from the government, but from the Conference Board, a New York-based research organization. A competing report, issued this past Friday by the University of Michigan on consumer sentiment, showed a decided drop in this area reflecting the uncertainty engendered by the partial government shutdown earlier this month.

Most important in the week ahead, the Federal Reserve will be holding its two-day FOMC meeting beginning tomorrow, where no adjustment in either interest rates or the pace of bond buying is expected, as the central bank prepares to pass the ball from Ben S. Bernanke to Janet Yellen over the next few months. A smooth hand off may not occur, however, as the opposition to Ms. Yellen, a noted dove on the monetary front, is almost assured, in our view.

Meanwhile, a new week is upon us and we are just a few days from the start of a new month, and, as noted, things are still looking quite good, with the market soaring and the economy basically no worse for wear, notwithstanding the aforementioned government shutdown. Finally, in the next few minutes, the Commerce Department is scheduled to issue its delayed data on industrial production and factory use. Small increases in both categories are expected. As to the markets, they are showing a mixed tone in the futures, presaging a ho-hum start to the trading day, which commences 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.