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After The Close - The U.S. stock market managed to trade a bit higher this morning, but the mood gradually eroded as the session wore on. Notably, the bulls, having had a good run lately, seem a bit fatigued, and the market may be in need of a pause. At the close of the day, the Dow Jones Industrial Average was off 62 points; the S&P 500 Index was lower by nine points; and the NASDAQ, which was quite weak, closed down 22 points. Market breadth was decidedly negative, as declining stocks outnumbered advancers by over two to one on both the NYSE and on the NASDAQ. Further, all of the market sectors slipped today. There was notable weakness in the consumer-non cyclical names. The industrial issues also lost ground. Further, the healthcare stocks traded lower, with large losses in the biotechnology shares. Meanwhile, there were few outperforming sectors worth noting.

Technically, the S&P 500 Index may be due for some consolidation, especially given the large runup staged over the past several weeks. Some of that advance was likely fueled by the numerous positive earnings reports that have come out lately. Further, more recently there is a sense that the Federal Reserve probably won’t abandon its accommodative policies too soon (see below). Nonetheless, sentiment was a bit more apprehensive today, as the VIX moved a bit higher.

Traders received a few economic reports worth mentioning this morning. For one, the ADP Employment Change report showed 130,000 private sector jobs were added to the economy in October. While this reading was a bit better than had been widely expected, it was slightly lower than the 145,000 jobs added in September. For those interested in the employment situation, the weekly initial and continuing jobless claims are due out tomorrow. Then, next week we are scheduled to get a look at the government’s October employment report. Meanwhile, the Fed concluded it two day meeting today, and that may have kept some traders on the sidelines. The Fed largely suggested that it will keep its current policies in place, choosing to monitor the economic recovery, for now. Nonetheless, this news was expected, as traders did not rush in to buy equities on the news.

There were quite a few companies that reported results today. In technology, Cirrus Logic (CRUS) failed to impress investors, as that issue traded sharply lower. Things went better for Take Two Interactive (TTWO), as the game developer put out strong results and that stock moved up but reversed course later in the session. Buffalo Wild Wings (BWLD) was a big gainer, as the restaurant operator put out good figures, too. - 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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12:00 PM EDT - The U.S. equity market, which started the day with the Dow Jones Industrial Average and the broader S&P 500 Index at record levels, pressed higher initially. However, as the morning progressed, the major averages moved toward the neutral line and within the last hour there has been a pickup in selling activity, particularly in the more risky small-cap market.

For the most part, though, investors seem to be hesitant to make any major moves ahead of the Federal Reserve’s announcement later today following the conclusion of the latest Federal Open Market Committee meeting. The overwhelming sentiment is that the central bank with keep its accommodative stance in place and that, along with the decent earnings news of late (see below), has given much support to equities that are already at rather frothy valuations. 

From a sector perspective, most of the top-10 groups are not too far removed from the breakeven line, too. However, investors should note that the consumer staples and healthcare stocks are under some selling pressure. The latter group is lower, as HHS Secretary Kathleen Sebelius testifies before Congress about the Affordable Healthcare Act. The proceeding has proven contentious, with political bickering once again in the spotlight on Capitol Hill. In the consumer noncyclical space, the biggest laggards are the stocks of Ingredion Inc. (INGR) and Sodastream Int’l (SODA), which reported disappointing earnings results earlier today. Nonetheless …

The earnings news from Corporate America as a whole was rather positive this morning. On the plus side were reports from automobile manufacturer General Motors (GM), Gilead Sciences (GILD), Baidu.com (BIDU), and Buffalo Wild Wings (BWLD). Conversely, the stock of Black Box (BBOX) tumbled after the communications system integrator reported its latest quarterly results. Investors will also be very interested to learn how Facebook (FB) fared in the latest quarter. The social media giant is scheduled to release earnings after today’s closing bell. The stock is little changed today.

On the economic front, the news was mixed. Before the market opened, we learned from the Labor Department that consumer prices rose by a tame 0.2% in September. That report, along with yesterday’s data on producer (wholesale) prices, was another indication that inflationary pressures are benign. This, along with a disappointing data on private payroll creation figures from Automatic Data Processing (ADP) this morning—only 130,000 new jobs were added last month—are just more fuel for the Federal Reserve to keep its accommodative monetary policies in place. We will learn more about what the Federal Reserve is thinking after the lead bank concludes its two-day monetary confab and releases a statement about monetary policies at 2:00 P.M. (EDT). Investors also should note that the first look at third-quarter GDP, which was originally scheduled to be released this morning, was delayed until November 7th because the recent government shutdown.  That reading is expected to show moderating growth during the July-September quarter, and probably is a big reason why we expect no tapering of the Fed’s bond-buying program this month.

Looking ahead to the second half of the trading day, the investment community will be waiting for the latest commentary from the Federal Reserve. Our sense is that the statement will not have a major impact on the direction of trading as the prevailing thought is that the central bank will stay the course with regard to its loose monetary policies, and that the  new thinking is that the Fed may shift its policy some time next spring, if not later. Such a backdrop is usually favorably greeted by equity market participants. That said, we do warn that any deviation from its current accommodative monetary course could possibly spark some selling in a market that is clearly overbought.  - 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 SurveyThe earnings parade continues, with a number of video game developers, including Electronic Arts (EA) and Take-Two Interactive Software (TTWO), reporting quarterly results that pleased investors. Both stocks are trading up in the premarket as a result. Other equities moving higher ahead of the bell on earnings news include drugmaker Gilead Sciences (GILD), restaurant operator Buffalo Wild Wings (BWLD), global positioning system developer Garmin (GRMN), automaker General Motors (GM), and telecommunications company Sprint (S).

Conversely, the investment community was not enthused with quarterly results from several Internet companies, and shares of Yelp (YELP), IAC/InterActive (IACI), and LinkedIn (LNKD) are all indicating notably weaker openings this morning. Other stocks moving lower in pre-market trading on earnings news include SodaStream (SODA), a maker of home beverage carbonation systems, money movement and payment services provider Western Union (WU), insurer Aflac (AFL), and energy company Phillips 66 (PSX). – Matthew E. Spencer

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 drifted higher for much of the day yesterday, but with the gains being selective and concentrated predominantly in a few high-profile Dow-30 stocks, notably International Business Machines (IBM - Free IBM Stock Report), which was boosted by an enlarged share buyback, and Procter & Gamble (PGFree Procter & Gamble Stock Report).

Overall, the market's gains were grudging, as many pundits are warning once again that the surge has come too far, too fast, and that some sort of pullback, even a nasty one, is overdue. With such sentiment starting to again hang over the market, it is not too surprising that investors have started to pare back on their purchases of riskier small- and mid-cap names and shifted over to buying more liquid issues, which are  normally domiciled on the larger-cap indexes, such as the Dow Jones Industrial Average and the Standard and Poor's 500 Index. Yesterday's action was a case in point.

For the most part, though, the market was influenced by the ebb and flow of corporate earnings data, which continue to roll in at a fast pace, and will do so for another couple of weeks. In total, such issuances have been satisfactory this quarter, with the majority of companies, large and small, bettering reduced profit targets. This has become the standard on Wall Street in recent quarters, as companies guide lower during the period and then exceed those modest targets after the quarter has drawn to a conclusion.

Also on the minds of traders and investors alike over the past week or two, has been the Federal Reserve, which commenced its latest two-day FOMC meeting yesterday morning. That confab will conclude this afternoon. It is a virtual certainty that interest rates will not be moved off of their historic lows; it is a near certainty in this environment that there will be no tapering of the aggressive bond-buying program.

Meanwhile, it earlier had been a foregone conclusion that the lead bank would cut back on such purchases this year; now, with the uncertainties engendered by the recent government shutdown and the contentious debt-ceiling debate having passed for the moment, there is less chance of such an adjustment. The new thinking is that the Fed may shift its policy some time next spring, if not later. With acknowledged monetary dove Janet Yellen likely to assume the stewardship of the central bank by then, there is less likelihood that a shift in gears will take hold very quickly. The accompanying statement after the meeting's conclusion today should thus be enlightening.         

Then, there is the economy, which continues to amble along in unassuming fashion, with any hint of an acceleration in growth still being held at bay. The latest metrics were certainly not emboldening. On point, the Conference Board yesterday reported a sharp drop in consumer confidence this month, while the Commerce Department reported that retail sales, pulled down by a rare decline in auto volume, eased by 0.1% in September. Such reports were accompanied by a decline in producer, or wholesale, price inflation for the month. At this point, deflation seems more of a threat than inflation, although neither event appears likely, in our opinion.

Finally, there was the usual quarterly event surrounding the earnings release of tech icon Apple (AAPL). To sum up, the company issued its metrics after the close of trading on Monday, and results did not vary much from the consensus. The stock, which sold off in the afterhours that day, shifted course and moved higher early yesterday. However, the profit takers soon moved in and the issue ended the day modestly lower. 

As to the day ahead, the bulls were out in Asia overnight and they are taking the reins so far in Europe this morning. And on our shores, the equity futures are pressing higher, with the Standard and Poor's 500 Index futures now up three points and the NASDAQ futures heading higher to the tune of almost 15 points. With the S&P and the Dow poised at records, there is a strong bullish tone still in place, notwithstanding the temptation to take profits in an overheated market. – Harvey S. Katz  

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