After The Close - The U.S. stock market got off to a weak start this morning, and was unable to meaningfully reverse course as the session evolved. All told, the Dow Jones Industrial Average was off 135 points; the broader S&P 500 Index was lower by 16 points; and the technology-heavy NASDAQ was down 34 points. Market breadth was decidedly negative, as declining stocks outnumbered advancers by about two to one on both the NYSE and the NASDAQ. All of the various market sectors closed in negative territory. There were sharp losses in the energy group, as the exploration and production issues were off sharply. The technology sector slipped, too, with weakness in the hardware names. In contrast, there was some relative strength in the healthcare group, which held up a bit better than other areas of the market. Also, there was considerable strength in the precious metals stocks. Notably, the price of the gold traded almost 2% higher today to about $1,225 an ounce.

Technically, the S&P 500 Index, with dividends, gained almost 30% in 2013. So, it is not unreasonable that traders would be a bit cautious in starting out the New Year. Furthermore, some traders may have waited until 2014 to take profits, which allows them to put off paying taxes for a while. Meanwhile, it is difficult to make predictions based on one trading day, and, for now, we will have to wait and see how the month of January plays out.  

Meanwhile, traders started 2014 with quite a few economic reports to sift through. For the most part, the news was uneventful. Initial jobless claims for the week ended December 28th came in at 339,000, which more or less, matched expectations. The ISM Manufacturing Index provided a reading of 57.0 for December, which was slightly better than the consensus view. Meanwhile, construction spending increased 1.0% during the month of November, which was a bit better than had been expected. Tomorrow will be a light day for reports, as just motor vehicle sales for December are due to be released. Investors should also bear in mind that the government’s monthly employment report for the month of December is slated to be released next Friday, and that will be a widely-watched item.

In corporate news, things were quiet today. However, Bank of America (BAC) stock moved higher on a “Wall Street” upgrade. -Adam Rosner

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


12:10 PM EST - Stocks today came out of the chute in a downward trajectory to open the new year, and the selling has continued. Right around the noon hour on the East Coast, the Dow Jones Industrial Average is off 127 points and the NASDAQ is 40 points lower. The broader market affirms the negativity, with decliners topping advancing issues by more than two to one on the Big Board.

More than anything else, the minor selloff probably speaks to the need for traders to take profits, which some were likely waiting for the calendar turn to do.

But there was also a bit of disconcerting data from China, where industry sources showed manufacturing growth slowed. The big picture is that China’s economy appears to be shifting into a lower gear, and not likely to resume its former double-digit annual GDP advances anytime soon, even if its most recent growth of over 7% a year is not too shabby.

On a brighter note, financial data firm Markit noted that manufacturing in Europe advanced for a third straight month in December, with orders rising to a two and a half year high. The quieter-to-better tone of news streaming out of Europe in the past year has clearly provided support for stocks on these shores after serious concerns about the region’s future two to three years earlier. 

This morning’s economic data stateside was not bad, either, with initial weekly jobless claims falling by 2,000 and Markit’s U.S. Manufacturing Purchasing Manager’s Index rising in December. The ISM manufacturing index eased slightly from November to December, though, even as it remained solidly in expansion territory. This latter piece of data may be helping to push bond yields down somewhat (with prices rising). The yield on the 10-year Treasury note is back down to 3.00% after coming into today’s session above that level.

Elsewhere gold prices are bucking the downturn in the stock market. Gold in recent months lost much of its luster as a safe haven against uncertainty, as the global economy regained its footing. But, for today at least, a rise in gold quotations is helping to lift shares of producers of the yellow metal, including Barrick Gold (ABX) and Newmont Mining (NEM).

Heading into the afternoon session, stocks are near their lows for the day, but despite not continuing their recent strength, nothing seems too terrible. - Robert Mitkowski

At the time this article was written, the author did not have a position in any of the companies mentioned.


Stocks to Watch from The SurveyCorporate news looks to be rather light on the first trading day of 2014. Motorola, a division of Internet giant Google (GOOG), has dropped the price of its flagship smartphone, the Moto X, putting pressure on rivals such as Samsung and Apple (AAPL). Shares of both Google and Apple are down slightly ahead of the bell, with the latter being hurt by an analyst downgrade. After the market closes today, consulting company Resources Connection (RECN) is scheduled to release November-period results. – 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 - We start a new trading year this morning following a historic 12-month joyride that saw the stock market set a series of records, led by the 30-stock Dow Jones Industrial Average, which thanks to Tuesday's notably better showing, forged 52 all-time closing highs. In fact, the market largely ran the table in the just-concluded term, starting the year in the plus column and staying on track just about throughout. And the momentum actually built as the 12 months wound down, with the bulls ending the year in a veritable buying stampede. 

What made the just-ended 12 months so special was that it was already the fifth year of this lengthening bull market, a bullish rise that has carried the Dow Jones Industrial Average from a bear market nadir of less than 6,500 to a 2013 close of just under 16,600. That run of some 10,000 points in this blue chip index was paralleled by stealthy gains in the Standard and Poor's 500 Index and the tech-laden NASDAQ. The S&P, meantime, scored 45 all-time highs in the year just passed thanks to the late rush on Tuesday, while the NASDAQ climbed by better than 38%, including a final-session gain of 22 points. The latest 12 months were remarkable on many counts. 

Behind this strong year for the market was solid economic improvement, continued monetary support from the Federal Reserve--which even while starting to taper its bond-buying program was out there pledging to keep interest rates at historic lows for some time yet--and strengthening corporate earnings. A relatively quiet and benign global economic backdrop, where no major fiscal or monetary debacles occurred, a comparatively stable international political and diplomatic scene, and continued low inflation readings stateside also aided the bullish cause.  

The final session of 2013, meanwhile, was helped by not only continuing market momentum, but also by some further encouraging economic metrics in the form of a report showing a strong rise in consumer confidence in December, including gains in a few key components within that aggregate index, led by the Present Situations Index and the Expectations Index. More plentiful jobs and a better stock market, we sense, were behind much of the latest improvement in this key consumer sentiment survey.

Now, following this record-breaking year, the bulls will try to keep the momentum of 2013 alive in the new year. And as always they will face a series of challenges, most of which are not yet on the radar screen. And, moreover, some pundits are already forecasting an early pullback. Their reasoning is that valuations are stretched and that some equilibrium will need to be established again before we can get another leg up in this market. Now, we would not argue with the fact that the market is rather frothy, but markets can stay that way for lengthy periods of time, just as they can stay undervalued for long stretches, as they did during 2008 and early 2009. Also, we believe that fourth-quarter earnings season, which is just a week or two up ahead, will be largely favorable. What's more, the stock market often performs well in the first four or five months of a year. That said, stocks have, in the past, stumbled more frequently during the second half, and that was certainly not the case in 2013. Thus, so much for the calendar. 

As to the day ahead, we will be getting an important economic issuance at 10:00 (EST) this morning when the Institute for Supply Management will release its latest reading on manufacturing activity across the country. That metric, covering December, is expected to further the string of monthly data showing an expansion in this critical industrial category. Also, this morning, in a report just released, the U.S. Labor Department reported that weekly jobless claims had eased a bit in the latest seven-day stretch. Jobless claims have been generally trending lower in recent months, while job creation has been on the rise. 

Finally, on the global stage, the markets were mixed in Asia overnight, hurt by downbeat manufacturing data out of China, while they are lower in Europe thus far this morning. And on our shores, the Standard and Poor's 500 Index futures are suggesting an early moderate decline of some three points, while the tech-heavy NASDAQ is seeing a nine-point drop in the futures, with less than an hour to go before the start of the new trading day. The yield on the 10-year Treasury note, in the meantime, has inched above 3%, as we take this opportunity to wish all of our readers a happy, healthy, and prosperous new year. - Harvey S. Katz

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