After the Close - The final day of the month of January was a volatile one for traders and capped off a tumultuous week on Wall Street. The major equity indexes fell sharply within the first few minutes of today’s session—highlighted by a more than 200-point decline for the Dow Jones Industrials—then spent much of the session trying to recoup those earlier losses. But in the end the selling picked up again suggesting continued anxiety among investors. Equities were pressured by concerns about deflation in the euro zone (see below), worries about emerging market currencies, and mostly weak earnings stateside, though there were a few impressive quarterly performances of note.

At the closing bell, the Dow Jones Industrial Average, the NASDAQ, and the broader S&P 500 Index were 150, 19, and 12 points lower, respectively. Overall, declining issues easily led advancers on both the Big Board and the NASDAQ. Today’s selloff was the finishing touch on a rough month for stocks. It was the first monthly setback for equities since August and the worst January showing since 2010. Overall, the Dow 30, the NASDAQ, and the S&P 500 Index fell 5.3%, 1.7%, and 3.6%, respectively, this month. The January showing is somewhat disconcerting for investors, as trading in the first month of the new year often is a good indicator of what lies ahead for investors over the remaining 11 months; however, that trend has not always been predictive. If anything, the January performance may be an indication that it will be a volatile year for trading after a bull run of more than four years. In fact, the Dow Jones Industrials saw intra-day swings of more than 100 points in every session but one this month, underscoring the volatile stretch it was for the U.S. equity market.

As noted, the equity market did not get much help from the business beat, either here or abroad. On the home front, The University of Michigan Consumer Sentiment Index fell in January. This, combined with a report from the Labor Department showing that personal incomes were flat last month, was somewhat discouraging to investors, and threw a bit of cold water on yesterday’s GDP report that showed that personal consumption jumped in the fourth-quarter. Today’s data raised some questions about whether the consumer, who accounts for about two-thirds of the nation’s economic output, will continue to spend in the months ahead. Meantime, the economic news was not much better from the Continent, which showed that prices fell unexpectedly in euro zone, and stoked concerns about deflation for the region. We also learned that retail sales fell sharply last month in Germany, the euro zone’s largest economy. All of these issues pressured stocks in the more economically sensitive sectors today. Not surprisingly, the energy, basic materials, and industrials groups were the notable laggards.

Meantime, the earnings news was not all that supportive, either. Of note was a very disappointing showing from Dow-30 component Chevron (CVX Free Chevron Stock Report). Shares of the fourth-largest oil concern fell on weak earnings and a notable decline in global production and refining margins. Some other companies that disappointed investors with their latest quarterly results were online retailing giant Amazon.com (AMZN), toymaker Mattel (MAT) and credit card giant MasterCard (MA). Conversely, shares of Google (GOOG) moved higher after the technology giant reported that ad revenues rose sharply in the latest quarter. The positive showing from Google boosted the technology stocks and helped the NASDAQ Composite, which briefly moved in to positive territory late in today’s session. Those investors’ long shares of Chipotle Mexican Grill (CMG) also were smiling from the get-go today, as the stock of the fast-food restaurant chain jumped on the company’s report of a 30% increase in quarterly profits and impressive same-store sales data. Shares of Computer Sciences (CSC) also hit a multiyear high after reporting fiscal third-quarter results today.

Looking ahead to next week, we could be in for more of the same as far as market volatility goes, with investors once again having to digest another heavy dose of earnings and economic news. Our sense is that the economy will have a bigger say in which direction the market heads, especially with the budding emerging market concerns. On the home front, we will get data on manufacturing and nonmanufacturing activity, the trade gap, and the much-anticipated report on non-farm payrolls for the month of January. The latter release could be a game changer, given the surprising slowdown in job creation last month. As noted, the earnings reports will be heavy, but with the exception of Walt Disney (DIS Free Disney Stock Report) and Merck & Co. (MRK Free Merck Stock Report), it will lack the headline grabbers. - William G. Ferguson

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


12:15 AM EST - The U.S. market opened sharply lower this morning, as traders took their cue from the situation in Europe. Notably, the bourses were largely lower, due to some disappointing economic release on the Continent. Meanwhile, at about noon in New York, our markets are coming off the session lows. Hopefully, the bulls can muster some strength later in the day, delivering at least a partial, if not a full, recovery. For now, the Dow Jones Industrial Average is down 100 points; the broader S&P 500 Index is off seven points; and the technology-heavy NASDAQ is lower by 15 points. As expected, market breadth is negative today. Further, almost all of the market sectors are losing ground, with pronounced losses in the financial and healthcare names. However, the utilities are bucking the downtrend, which is possibly a defensive move on the part of investors. Notably, there has been some interest in gold lately, too, as this is a flight-to-safety investment. The precious metal is up slightly today, but it is still unclear if we will see a sustained recovery from these levels. At roughly $1,242 an ounce, the commodity is now dramatically off its high of just over $1,900.

Technically, the U.S. stock market remains volatile, delivering large swings on a daily basis. This likely suggests that traders are a bit uncertain about the current situation and in need of some direction. The barrage of earnings announcements coming across the news wires is also likely adding to the volatility. The fact that the quality of these reports has been quite mixed, too, is not likely helping matters. Today’s weakness keeps the S&P 500 Index stuck in the 1,780 area. We will be watching to see if the broad index can move past 1,800, which may function as a point of resistance. A sustained move beyond this level would likely be a bullish indication.

Meanwhile, traders received some economic news this morning, but this likely had little impact on todays’ trading. To wit, the University of Michigan’s Consumer Sentiment report came in with a final reading of 81.2 for January, which was in line with expectations, but below December. Elsewhere, the Chicago PMI slowed slightly during January.

Once again, some widely watched companies put out results. Specifically, Internet retailer Amazon.com (AMZN) issued a disappointing release, sending that stock lower. However, technology leader Google (GOOG) stocks is moving higher, even though that company issued a mixed release. - Adam Rosner

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


10:15 AM EST- The stock market, already on course for its worst January since 2010, moved further into negative territory for the now-concluding month this morning, with the major U.S. indexes under heavy early selling pressure on this final day of the month.

To wit, the Dow Jones Industrial Average is now off 210 points, having a few minutes ago fallen to a loss of some 225 points; the Standard and Poor's 500 Index is down 18 points; and the tech-laden NASDAQ is lower by 35 points.

Behind this latest drop, which thus far has offset yesterday's encouraging rebound, are proliferating global worries. Not only are emerging market indexes faltering badly on economic and currency fears, but now Europe's markets are headed notably lower in the current session on deflation fears, which are growing out of a lower 12-month inflation number issued this morning.

Finally, U.S. news at home hasn't helped, as data issued at 8:30 (EST) this morning showed no increase in personal income in December; expectations had been for a gain of 0.2%. Should income start to falter, the expected solid GDP increase this year could be in jeopardy. - Harvey Katz

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 SurveyStocks look poised to end a down month on a decidedly weak note, as futures are pointing sharply lower. Earnings reports, at least today’s batch, seem to be part of the problem, and a number of large, bellwether companies disappointed investors. Indeed, shares of Internet retailer Amazon.com (AMZN), energy giant Chevron (CVXFree Chevron Stock Report), toy maker Mattel (MAT), and credit card processor MasterCard (MA), are all moving lower ahead of the bell after releasing December-period results, with AMZN, MA, and MAT showing considerable weakness. A January-period profit warning from Wal-Mart (WMTFree Wal-Mart Stock Report), the world’s largest retailer, did not help the sentiment on Wall Street, and that stock is indicating a slightly lower opening, as a result.

There were some bright spots, however, and investors seem pleased with quarterly financials from restaurant operator Chipotle Mexican Grill (CMG), Internet icon Google (GOOG), online video game developer Zynga (ZNGA), hotel/casino operator Wynn Resorts (WYNN), and electronics company JDS Uniphase (JDSU). CMG and ZNGA, in particular, are doing well in pre-market trading. – 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 - It hasn't been a very good month for the bulls, overall. In fact, barring last-minute heroics by those eternal stock market optimists, the leading equity averages are on course to close out this opening month of 2014 with modest losses. But that does not mean the bulls haven't had their way at times and attempted on a few occasions to right a listless ship. Yesterday was just such a day.

To wit, after Wall Street, under pressure from emerging market trials and tribulations, a succession of less-than-fulfilling quarterly earnings reports, and further attempted tapering action by the Federal Reserve, had fallen sharply on Wednesday, with the Dow Jones Industrial Average tumbling 190 points. Further concerns overseas and the announcement of another $10 billion-a-month Fed monetary tapering were the principal inducements to sell that day.

But what the market gives, in terms of some satisfaction for the bears, it also can take away. Thus, one day after the Dow and the other averages tumbled en masse, the market turned around and headed strongly higher.

Of course, the lingering issues of heightened developing world economic and currency risk, a slightly less accommodative Federal Reserve, a checkered earnings pattern, and stretched valuations remain with us. However, we did manage to see better earnings in the latest session from financial services behemoth and Dow-30 component Visa (V - Free Visa Stock Report) and stellar results from social networking giant Facebook (FB), the report of a strong fourth-quarter showing by the nation's gross domestic product, and perhaps second thoughts about the prior day's Fed tapering.

Breaking these developments down, the Visa and Facebook results were reassuring, especially after the less-welcoming reception accorded yesterday's released quarterly results from Dow-30 components 3M Company (MMM -Free 3M Stock Report) and Exxon Mobil (XOM). And, as if on cue, both stocks ticked down after their issuances, although neither company's metrics were all that problematic. Overall, this has been a decent quarterly earnings season, and one that may not have gotten its due because of the high valuations. Then, there is the economy, which has had good and bad news lately, but which had a really large piece of the former yesterday morning when the government reported that its advance estimate of fourth-quarter GDP showed a gain of 3.2%. That was in line with consensus forecasts, but the key component of that healthy increase, a solid uptick in consumer spending, was truly confidence building.

Then, there is the Fed. True, it is likely to continue to reduce monthly bond purchases. But that slightly less-giving approach can be better tolerated in a strengthening economy, such as this data on GDP would suggest is taking hold now. So, stocks rallied from the start, and save for some backing an filling in mid-afternoon, the bulls were almost totally in charge, though the market did close off its session highs. All told, by the close, the green arrows were clearly in the majority, as the solid advance-decline line would attest. Specifically, the Dow helped by a modest rise in Visa shares, gained 110 points; the Standard and Poor's 500 Index tacked on 20 points; and the tech-laden NASDAQ, lifted by a 14% surge in Facebook, added an eye-opening 72 points. The small- and mid-cap indexes also made notable up moves on this dramatic recovery day for the bulls.

Meanwhile, a new day is about to get under way, and we are not getting help from overseas so far this morning, with the markets in Europe under notable pressure this morning, due, in part, to a sobering reduction in inflation in January, a drop which raised the ominous specter of possible deflation. And on our shores, the bulls have seemingly again run out of steam, as the Dow, S&P, and NASDAQ futures are all tumbling ahead of the bell. A disappointing quarterly release from Amazon (AMZN), is not helping matters. In fact, even a warm reception for Google's (GOOG) results, while boosting that stock, is not giving a lift to the market, overall.

Finally, the government has just released data on personal income and personal consumption expenditures for December, and the figures were mixed, and certainly not game changing. On point, the Commerce Department reported that personal income showed no change last month; a gain of 0.2% had been the forecast. But consumer spending added 0.4%, twice the expectation. Such metrics would seem to suggest that the fourth quarter's increases in consumer expenditures carried through the end of the quarter, but with flattish income, the obvious question becomes just how much longer such growth will persist.

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