After The Close - The first trading day of the month of November was a mixed one for investors. The large-cap indexes, particularly the Dow Jones Industrials and S&P 500 Index, finished higher, helped by a modest pickup in buying in the last hour of trading. However, the tech-heavy NASDAQ—though able to eke out a small gain by the closing bell—did not fare as well, with weakness in some of the major tech names, including shares of Apple (AAPL) and Amazon.com (AMZN), to blame there. Investors should also note that selling took place in the small-cap Russell 2000. Our sense is that investors who think that valuations have gotten a bit frothy, opted to take some profits off the table in the more risky small-cap market. Overall, declining issues led advancers on both the Big Board and the NASDAQ.

From a sector perspective, the winners and losers among the 10 major groups were close to being evenly split. In addition to the aforementioned technology weakness, there was some softness in the energy sector. In particular, oil stocks were under pressure, with falling crude prices likely weighing on the industry. In fact, the price of crude oil fell below $95 a barrel on the New York Mercantile Exchange today. A disappointing quarterly earnings report from oil giant Chevron (CVX - Free Chevron Stock Report) also did not help the sector. Conversely, there was some buying interest in the industrial groups, which we think was prompted by some good economic reports both here and abroad (see below). Likewise, investors showed an interest in some of the more-defensive names, including the utilities, the consumer staples, and the healthcare issues, which was probably the product of more investors starting to show some hesitation in adding additional risk to their portfolios.

As noted, most of the global economic news was encouraging today. Overnight, we learned that manufacturing activity in China rose to 51.4 in October, from 51.1 in September, topping consensus estimates. A similar story was written on the homeland, as the Institute for Supply Management, a Tempe, Arizona-based trade group, reported that its survey on the nation's manufacturing activity climbed to its best level since April of 2011, rising to a solid reading of 56.4. That was up incrementally from September's figure of 56.2. The manufacturing sector, which is an important cog in the nation’s economic output, has performed very well in recent months, helping to somewhat offset less-than-flattering data of late on employment and retail sales.

Elsewhere, it was not a good day for those long commodities. In addition to the aforementioned drop in oil, several of the metals, agricultural and soft futures, finished in the red. The primary culprit was the strength of the U.S. dollar. A stronger greenback makes these commodities more expensive in overseas markets and tends to hurt demand. The dollar rallied throughout the session, gaining significant strength against the euro and the British pound. The euro has fallen in recent days amid rumblings of a European Central Bank rate cut by the end of this year.

Looking ahead to next week, investors—with news from both Capitol Hill and the Federal Reserve likely to be minimal—will turn their attention to the economy and earnings. On the economic beat, investors will receive data on the trade gap and nonmanufacturing activity, along with the delayed—and much anticipated—releases of third-quarter GDP figures and the employment data for the month of October. Meantime, the earnings news, which will remain heavy from a volume standpoint, will probably be light on headline grabbers, as there are not many industry giants, with the exception of Walt Disney (DIS - Free Walt Disney Stock Report), Kellogg (K), and Mondelez International (MDLZ), scheduled to report quarterly results over the next five trading days. - William G. Ferguson.

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


12:30 PM EST - The U.S. stock market managed to regroup and move selectively higher this morning, but has since weakened across the board. At past noon in New York, the Dow Jones Industrial Average is now flat; the broader S&P 500 Index is down three points; and the NASDAQ is shedding 12 points. Further, market breadth has turned negative, as declining stocks are outnumbering advancers by about two to one on both the NYSE and the NASDAQ. And most of the market sectors are now in negative territory. There is particular weakness in the energy sector, with losses in the large integrated oil and gas producers. Notably, the price of crude oil is lower today, and that is probably hurting some of the equities in this group. Also, the basic materials issues are declining, with particular losses in the precious metals issues. Here, again, gold prices are down, and that is likely pressuring equities. In contrast, the utilities are holding up well today, as this tends to be a defensive group. Also, some consumer names are bucking the downtrend.

Technically, the S&P 500 Index has pulled back over the past couple of sessions. It seems the bulls may be losing some steam, at least for now. However, we have not yet seen profit taking of any magnitude, or heavy-volume selling by traders and institutions. The VIX is up slightly today, but remains at low levels, suggesting a bullish bias.

Traders here in the U.S. were likely pleased with some of the international economic news released today. Notably, there was a better-than-expected manufacturing report issued in China, which is encouraging given the size of that country’s economy. Further, on our shores, the Institute for Supply Management’s Index delivered a manufacturing reading of 56.4 in October, which was better than had been expected and also slightly ahead of the September figure.

And while the earnings season is starting to wind down, investors received a handful of reports to digest today. Among the widely held names, shares of Dow component, Chevron (CVX - Free Chevron Stock Report) are off modestly, after the energy giant delivered weaker-than-anticipated results. Also, AIG (AIG) stock is headed lower, after the insurer put out a mixed set of figures. Among the bigger movers today, First Solar (FSLR) stock is up sharply on a healthy earnings report, while Body Central (BODY) is sinking after its release. - 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- Even though the earnings calendar is not as jammed packed as it has been over the last few days, and Wall Street will be paying close attention to manufacturing reports in an effort to get a better handle on the Federal Reserve’s plans moving forward, there are a few notable names scheduled to report this morning. Most notable in this regard is energy provider and Dow-30 member Chevron Corp (CVX - Free Chevron Stock Report).  Another big name that will interesting to keep an eye on this morning is American Int’l Group (AIG). The insurance giant reported slightly better-than-expected earnings after the bell last night, but underwriting losses in the property and casualty business resulted in a revenue miss. First Solar, Inc. (FSLR) and Madison Square Garden (MSG) are two additional names that handily outpaced earnings expectations this morning and will probably garner some interest from the investment community.

Elsewhere, we will be keeping close tabs on the automotive industry. Both General Motors (GM) and Ford Motor (F) are slated to provide October sales results, with the latter likely to lead the charge.- Andre J. Costanza

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


Before The Bell - The often volatile month of October is over, and the frequently more-forgiving month of November is set begin. Encouragingly for the bulls, fears of a notable correction in the month (October), which historically has seen not only corrections, but some memorable crashes--witness 1987 and 2008--did not materialize this year. In fact, stocks did well in the just-ended month, with each of the major averages scoring gains. The 31-day stretch, meantime, concluded with just minor moves yesterday, most of which, following several failed rally attempts over the course of the session, were to the downside.

All told, the stock market, which had retreated on Wednesday following the latest FOMC meeting, being pulled down by questions as to just when the Federal Reserve would commence its long-awaited monetary tapering, sold off further early yesterday. However, when the selling did not mushroom into a full-fledged rout, the bulls tiptoed back in, hesitantly at first, but then more definitively for a time, taking the equity market up modestly into the mid-afternoon. But when the bulls couldn't mount a sustained charge, the sellers reappeared, albeit still in somewhat half-hearted fashion, although the trend was clearly to the downside into the close.

By the conclusion of trading then, the Dow Jones Industrial Average, buffeted by last-minute weakness, wound the day off 73 points; the Standard and Poor's 500 Index was in the red by seven points; and the NASDAQ was off a modest 11 points. The the small- and-mid-cap composites, meantime, did somewhat better, on average, but still ended with losses, in a reversal of form from the prior few sessions, when those riskier composites had lagged. It would seem that the market's aversion to risk, which had been more pronounced in recent days, eased off to a degree in the latest session.     

Meanwhile, following the prior day's rather inconclusive Fed meeting results, and accompanying statement, it was back to earnings. Here, many companies issued their quarterly metrics yesterday, and for the most part the results were once again reasonable, and at times rather reassuring. However, there also were some notable reversals on the top and bottom lines, and a succession of less-than-empathetic reactions by the market. To wit, the latest session featured a disappointing forecast and a dividend suspension at weight-loss icon Weight Watchers (WTW). And that stock fell sharply, losing 19% on the day, and tumbling to 52-week low in the process. On the other hand, energy company CARBO Ceramics (CRR), soared almost 29% on strong third-quarter earnings and very upbeat guidance going forward. 

For the most part, though, the month ended quietly, with investors apparently satisfied to sit on their gains, and with a collective sigh of relief that October held no nasty surprises. And given how far and how fast the bull has come, that was no small achievement. It should be noted, that valuations are now frothy, and dividend yields are among the lowest in memory. That combination would seem to leave the market open to possible selling should the news head south in a hurry.

Meanwhile, we can now look out to a new month and to continued economic and profit releases. On the former count, the day ahead will bring key data on manufacturing activity, when at 10:00 (EDT) the Institute for Supply Management will issue its findings on manufacturing activity. A slightly lesser rate of expansion figures to have been tallied for October than September. It should be noted that yesterday, the Chicago area purchasing managers reported a surprisingly large spike in such activity. We'll soon see if there is another pleasant surprise in manufacturing tabulations across the country.
As to other news, manufacturing data from China issued overnight here were reassuring, suggesting that the world's second-largest economy is back in gear. However, the markets in Europe are less than ebullient about all this so far today and the principal bourses are all edging lower. But on our shores, the bulls seem set to get the new month off on a winning note as the Dow, S&P 500, and NASDAQ futures are all modestly higher ahead of the starting bell. – Harvey S. Katz  

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