Loading...

After The Close - Stocks today again followed the path of least resistance, which was higher. At the end of the session, the Dow Jones Industrial Average was 86 points to the good and the NASDAQ was up 13 points, or a lesser percentage than the Dow. The broader market mirrored the performance indicated by those major indexes, with advancers topping decliners by a wider margin on the New York Stock Exchange than on the NASDAQ. And, not surprisingly given another record high on the Dow, the number of stocks reaching fresh 52-week highs easily surpassed those hitting lows.

The push higher came about despite (or given Wall Street’s predilection for inverse logic, possibly because of) some lackluster economic data. Uninspiring figures regarding manufacturing in the New York region and domestic industrial production provided reasons for investors to believe the Federal Reserve will keep its aggressive monetary policies in place. There is some fear that the bullishness toward stocks has become over reliant on the Fed’s easy money policies. But any potential day of reckoning seems to keep getting pushed farther into the future.

Moreover, Janet Yellen, the heir apparent to the top job at the Fed, has put forth views that indicate the central bank’s popular bond-buying program will continue to be pursued as long as economic conditions call for support.

Favorable Fed policies aren’t the only factor behind the stock market rally of late. Falling oil prices since Labor Day are putting more cash into consumers’ hands. The decline has come about as restarted negotiations with Iraq over its nuclear plans have taken some of the fear premium out of oil quotations. Clearly ample domestic supplies of crude oil are also helping to bring down pump prices. The longer the trend toward lower fuel costs continues, the more confidant consumers are likely to be about their spending capabilities.

Despite the recent shift of oil prices lower, shares of Dow-30 component Exxon Mobil (XOM - Free Exxon Mobil Stock Report) made a nice percentage move today on word that legendary investor Warren Buffett’s Berkshire Hathaway (BRKB) had taken position in the energy giant. Exxon Mobil stock was the leading gainer on the Dow today.

All told, stocks enjoyed a good week of gains, with the Dow closing in on the 16,000 mark. - Robert Mitkowski

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, although a bit choppy, is managing to move higher today. At past noon in New York, the Dow Jones Industrial Average is up 47 points; the broader S&P 500 Index is ahead two points; and the technology-heavy NASDAQ is adding on four points. Market breadth shows a slightly favorable bias, as advancers are just ahead of decliners on the NYSE and on the NASDAQ. Most of the major market sectors are in positive territory today. Leadership can be seen in the basic materials issues, as the metals names are advancing. The financial stocks are also up considerably. Nonetheless, the utilities are lagging. Further some consumer cyclical names are underperforming.

Technically, the S&P 500 Index continues to extend its recent gains. Trading volumes have been healthy, suggesting that there is some commitment to the rally. Further, sentiment as measured by the VIX, which is now at 12.17, shows a degree of complacency. Given the fact that market has rallied without a significant pullback for some time now, some traders may be wondering if conditions have become “overbought” or extended in some way.

There were a few economic reports released worth noting. Specifically, the economy in the greater New York region looks a bit sluggish, as the Empire Manufacturing Survey came in at -2.2 in November. This reading was both lower than it had been in the prior month, and just short of expectations. Moreover, industrial production dipped slightly in October, while analysts had been looking for a minor improvement. Meanwhile, traders may be concentrating less on recent economic news, but instead are looking elsewhere. Specifically, traders seem pleased that Janet Yellen, who may well be installed as the next head of the Federal Reserve, will keep the current monetary policies in place.

In the corporate arena, Applied Materials (AMAT) stock is trading mixed, after the technology company issued guidance that was a bit cautious. Also, Exxon Mobil (XOM - Free Exxon Mobil Stock Report) shares are up after Berkshire Hathaway revealed that it is holding a large position in that company. - 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 Third-quarter earnings season has largely run its course, although now October-period reports are trickling in. Of note, Nordstrom (JWN) stock is down just slightly ahead of the bell, after the department-store operator reported results that left investors wanting a bit more. Wall Street was more keen on quarterly financials from precision instruments company Agilent Technologies (A), however, and that stock is up nicely in pre-market trading as a result. Elsewhere, shares of Kimberly-Clark (KMB) are indicating a modestly higher opening this morning, after the manufacturer of personal care and paper products said that it was pursuing a spinoff of its health care business. – 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 U.S. equity market enters the final day of the trading week in position to make it seven consecutive winning weeks on Wall Street. Indeed, the Dow Jones Industrial Average, the NASDAQ, and the S&P 500 Index begin the day sporting respective gains of 0.7%, 1.4%, and 1.1% so far this week. Yesterday, the aforementioned indexes tacked on another 55, seven, and nine points, respectively. In the process, the index of 30 bellwether companies and the broader S&P 500 Index ended the session at all-time highs.

The extended bull run, which has put market valuations at very frothy levels, got a boost from the ongoing Senate hearing to confirm President Obama-nominated Janet Yellen as the next Federal Reserve Chairperson. Specifically, Ms. Yellen struck a dovish cord yesterday, which was music to the ears of most investors. The growing perception is that the new Federal Reserve leader would continue the central bank's accommodative monetary policies, which have played a major role in the stock market's surge the last few years. Ms. Yellen said that "the Fed has more work to do," which investors took as a sign that a tapering of the Fed's massive monthly asset purchases in the coming months is unlikely.

From a sector perspective, the growing sentiment that the lead bank will continue its loose monetary policies gave a boost to the economically sensitive groups yesterday. There was mild leadership from the financial, energy, and industrial stocks. The Fed talk also weighed on fixed-income rates, with the yield on the 10-year Treasury note falling to 2.70%. This produced some sector rotation, as the higher-yielding utilities and consumer staples issues, which are viewed as alternatives to fixed-income securities, were in demand, particularly among income-oriented investors. Meantime, technology and telecommunications stocks were relatively weak, hurt by a weak showing from Cisco Systems (CSCOFree Cisco Stock Report). The technology giant and Dow-30 component disappointed investors with lackluster fourth-quarter guidance.

Meantime, the new day has brought out the bulls again. Overnight, the Asia’s indexes finished nicely higher, led by Japan’s Nikkei, which was up 2%. China’s Hang Seng and Shanghai Composite each rose 1.7%, as well. Likewise, the major European bourses are higher as trading enters the second half on the Continent, but the advances have been more modest. The lack of any major economic and earnings news overseas, much like what we have experienced stateside this week, is creating a vacuum of trading, helping to extend the bullish feelings.

With less than an hour to go before the commencement of trading on these shores, our futures are pointing to a higher opening for the U.S. equity market. Given that it will be a light day on both the business and economic beats—though we did learn this morning that the Empire Manufacturing Survey for November registered a reading of -2.2, which was down from October’s figure of +1.5—it may be hard for the bears to knock the bulls out of the driver’s seat. Perhaps, investors will once again turn their attention to the Federal Reserve confirmation hearing on Capitol Hill, which may provide more fodder for the bulls to run with. Stay tuned. – William G. Ferguson

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