After The Close - The bears were out in full force today, both on the homeland and overseas. Sparking the worldwide selloff were the growing tensions in Eastern Europe. Specifically, investors are worried about a potential military conflict between Russia and the Ukraine, with the former sending troops to the unstable region last Friday. That geopolitical news trumped a batch of decent U.S. economic reports issued this morning (see below).

From the get-go, the major U.S. equity indexes were under intense selling pressure. The Dow Jones Industrial Average was down as much as 250 points today, before settling 154 points lower by the closing bell. The weakness in the Dow 30 was matched by nearly similar percentage losses for the NASDAQ and the broader S&P 500 Index, with the latter two indexes finishing 0.7% lower. The aforementioned international worries had an even bigger impact on trading on the Continent. The major European bourses, including Germany’s DAX (down 3.4%) and France’s CAC-40 (-2.7%), were down even more than the U.S. major averages, as the concerns about the tensions in the Ukraine are even closer to home there.

The trepidations about the escalating tensions in Eastern Europe, along with light trading volume, raised the market’s volatility today. Not surprisingly, there was strong demand for safe-haven instruments. The price of gold jumped about $30 an ounce today, while the yield on the 10-year Treasury note, which moves in the opposite direction to the price, fell five basis points. The S&P 500 Volatility Index (or VIX), which is also known as the “fear gauge,” was up 15% at one point in intra-day trading. The last time such a move higher in the VIX was seen was during the first trading day of February. Investors should note that trading session was followed by an extended rally lasting the entire month. At first thought, one might think that this could be setting the market up for one of those Monday/Tuesday reversals that have been very much in vogue thus far in 2014. However, with the unsettling Ukrainian situation and the possibility of sanctions by the U.S. against Russia, the bulls can’t be feeling very confident right now.

From a sector perspective, there were no places for investors to hide in the equity market. Indeed, every one of the top-10 groups finished the session with down arrows. The biggest laggards were the financial, industrial, and technology sectors. Even the more defensive groups, including the healthcare, utilities, and consumer staples stocks, were unable to avoid the red ink today. The financial stocks bear close watching, especially if possible U.S. sanctions include the freezing of Russia’s assets by U.S. regulators. The U.S. banks have billions of exposure to Russia and would suffer losses if loans to Russia were frozen. 

As noted in our earlier market commentary, much of the domestic news was on the U.S. economy. The biggest report came from the Institute for Supply Management. Specifically, the Tempe, Arizona-based trade group’s manufacturing index came in at 53.2, which was better than the consensus expectation. It also marked the ninth consecutive month of expansion in the manufacturing sector and a made for a nice reading after several lackluster economic reports in the last month or so. We also learned today that personal income rose modestly in January, another positive sign. -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 continues to trade lower today with little sign of reversing course. Notably, traders have not been happy about Russia’s recent aggressive moves toward the Ukraine and that situation has unleashed a bout of selling across the equity markets internationally, and to a lesser extent, here in the U.S. At just past noon in New York, the Dow Jones Industrial Average is off 218 points; the broader S&P 500 Index is down 21 points; and the technology-heavy NASDAQ is shedding 61 points. Market breadth shows a flight from equities, as declining stocks are ahead of advancers by a wide margin on the NYSE. There is considerable weakness in the financial sector. The industrial issues are also encountering some selling. While also in negative territory, the utilities and the energy group are holding up a bit better than other areas of the market.

Technically, the stock rally that began in early February seems to be encountering some resistance. With stocks already a bit “overbought”, traders are likely a bit jittery and easily influenced by any negative news. Today’s move lower puts the S&P 500 Index below 1,850. Much will likely depend on further news items coming out of the Ukraine. For now, selling has been orderly, with no major panic among traders. However, the VIX is heading higher today, to over 16, and that does show that sentiment is becoming more apprehensive.

Meanwhile, there were a number of economic reports issued this morning, which were largely overlooked. First, personal income and spending levels for January showed modest increases. Further, the ISM Index rose to 53.2 in February, exceeding analyst expectations, which is encouraging. Also, construction spending increased 0.1% in January, which met the consensus forecast.

Finally, it was a light day for earnings reports. Nonetheless, Nu Skin (NUS) shares are trading lower, as that company issued weaker-than-expected guidance. Also, Celldex (CLDX) stock is slipping, although the biotechnology operator issued a decent quarterly release. - Adam Rosner

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


10:40 AM EST - The U.S. stock market is trading sharply lower this morning, as traders turn their attention to escalating tensions in Ukraine. Specifically, the Russian military has entered a few strategic locations in the region, in a move that has many in the international community concerned. At about 10:30 AM (EST) in New York, the averages are all about 1% lower. The Dow Jones Industrial Average is off 171 points; the broader S&P 500 Index is down 17 points; and the technology-heavy NASDAQ is lower by 50 points. Market breadth is sharply negative, with declining issues outweighing advancers by roughly three to one on the NYSE. All the market sectors are in negative territory, with notable weakness in the financial, industrial and technology names. There is some interest in safe assets, as investors are buying U.S. Treasuries. Gold, too, is up over 2%, to about $1,350 an ounce.-  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 Earnings news is rather light this morning. However, Berkshire Hathaway (BRK/B), the holding company run by legendary investor Warren Buffett, did report fourth-quarter results over the weekend. The stock is trading slightly lower ahead of the bell in a decidedly weak premarket, as a result. On the M&A front, menswear retailers Joseph A. Bank (JOSB) and The Men’s Wearhouse (MW), which have been at each other’s throats for months, have agreed to sit down to discuss a possible merger. Indeed, the companies have signed a nondisclosure agreement in order to share confidential information and further evaluate a potential combination. Finally, automakers are in the spotlight today, as Ford (F) and General Motors (GM) are set to announce sales figures for the month of February. Investors don’t appear to be overly optimistic, likely due to the severe winter weather last month, and both stocks are indicating lower openings this morning. – 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 - January was down; February was up; and now we enter the merry month of March. To recap, stocks swooned in January and then recaptured all of that lost ground last month. Now, as noted, we begin the third month of the year with the Standard and Poor's, the NASDAQ, and the small-cap Russell 2000 holding cumulative gains, while the Dow Jones Industrial Average is still in the red, but only slightly so, after a stellar February showing.

Helping stocks regain their traction last month, we sense, was optimism the current slowdown in the economy is weather related, while the Federal Reserve, reflecting this view, is proceeding as though the economy is on firmer footing, which most economic pundits believe will be the case once the long and harsh winter finally runs its course.

So, here we are. On point, the past month ended on a mixed note, as strong early final-day gains faded near the close on Friday, with the Dow Jones Industrial Average, once ahead by some 125 points, then in the red by nearly 50 points, finally ending up by 49 points. The Standard and Poor's 500 Index also ended higher, establishing another all-time closing high in the process. At one point, that index, which secured its 47th record high over the past year, was ahead by some 5% for the month.  However, the tech-laden NASDAQ faded down the stretch and ended the session 11 points in the red. Still, that index, as noted, remains in the plus column for the year. The Russell 2000, another two-month winner, ended lower, too, signaling some possible group and sector rotation.    

As to influences on the market in this final day of February, we saw data showing that the nation's economy grew by 2.4% over the final three months of 2013. That was in line with expectations, but was well under the initially estimated GDP gain for the period of 3.2%. It also was down from the 4.1% rise generated during the third quarter. Still, consumer spending rose in the final quarter, gaining 2.6%; the third-quarter gain in that category had been just 2.0%. The big reason for the quarter-to-quarter deceleration was a much lower level of inventory accumulation versus the prior period. That is a positive, as it likely means greater output going forward. Yet, with the weather a major first-quarter influence, our sense is that GDP will rise by just 1%-2% in the current period. Importantly, the latest GDP figures were viewed receptively by Wall Street, as was a better-than-expected reading on consumer sentiment. Hence, we had the generally decent showing by the market on Friday. Off shore, meanwhile, the situation in the Ukraine continued to unravel last week, and only worsened over the weekend, as neighbor Russia put troops on the ground and a heated conflict is now threatened. Obviously, concerns about spreading turmoil in that region are setting off alarms, particularly in Europe, given its proximity to the conflict. 

Now, as we look ahead to the third month of the year, we find that a busy news week awaits traders and investors. To start with, the Institute for Supply Management will be reporting on its latest data regarding U.S. manufacturing activity later this morning. Then, on Wednesday, the companion report on non-manufacturing activity will be issued. Thursday will then bring data on factory orders, productivity, and initial jobless claims. Finally, we are due to get the monthly employment report on Friday. That pivotal issuance, the most closely watched economic data point of the month is expected to show that the nation added 163,000 jobs last month, an increase over the 113,000 positions added in January.

As to the stock market today, as we await these releases, the trend globally is clearly downward, with moderate losses suffered overnight in Asia, but sharper setbacks in place in Europe, which, as noted, seems logical given the proximity of that region to the Ukraine and Russia. And over here, the S&P futures are off more than 16 points; the NASDAQ futures are lower by 31 points; and the Dow futures are some 150 points in the red at this hour, presaging a sharply weaker opening when traders get going in less than an hour for now.

Finally, in data issued just moments ago. The Commerce Department reported that personal income and spending rose modestly in January, in a dual report that does not figure to have much impact on trading this morning, with all eyes on the Ukraine. - Harvey S. Katz

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