Loading...
 

After the Close - It was a directionless day for equities, with the major market averages finishing not too far removed from where they started the session. For much of the day, the spread between advancing and declining issues was razor thin on both the New York Stock Exchange and the NASDAQ, as investors did not make many major moves after a notably weaker opening for the market. When all was said and done, the Dow Jones Industrial Average was off modestly, but were off of its session lows, while the NASDAQ was a bit higher, adding 16 points. The S&P 500 and the S&P Mid-Cap 400 Index were little changed.

Overall, although the market put in a rather uninspiring performance today, the bulls could take some solace in the fact that they were able to overcome a weak conclusion to trading yesterday and what was early on today looking like it was going to be a very tough day for those long equities, which was the case overnight in Asia and earlier on the Continent. In recent weeks, anytime selling has picked up and the markets look like they will be heading notably lower, the bulls seem to quickly step in and protect their positions, which has to be considered an encouraging sign, especially with the major equity indexes at or near record or multiyear highs, in the case of the tech-heavy NASDAQ.

Speaking of technology, the heavily weighted market sector, along with the utilities showed some leadership today. Within the tech space, the stocks of the semiconductor companies and the semiconductor equipment makers were in favor. It also should be noted that the basic materials sector finished in positive territory, helped by the precious metals and certain steel stocks. Conversely, there was some profit taking in the consumer staples, industrials, telecommunications, and energy sectors, but even those groups were off of earlier lows. The energy stocks were hurt by a sharp drop (roughly 2%) in crude oil prices on the New York Mercantile Exchange.

Once again, there was little economic and earnings of note released today, which may have been the reason why equities were somewhat range bound after the initial selloff and recovery. That will change before the market open tomorrow, as we are set to receive the latest data on retail sales for the month of February at 8:30 A.M. (EDT). It will be interesting to see if a weaker-than-expected showing would be brushed off as weather related once again. The consumer cyclical stocks, most notably those of the home furnishings and apparel companies, finished lower ahead of tomorrow’s retail data.

Meantime, there were a few interesting storylines out of Corporate America today. This afternoon, trading in shares of drugmaking giant Pfizer (PFE - Free Pfizer Stock Report) was briefly halted after reports surfaced the company lost a Celebrex patent ruling, which in a nutshell means that Pfizer faces earlier-than-expected competition for a leading drug. Elsewhere, the stock of heavily scrutinized Herbalife (HLF) fell after word surfaced that the maker of weight loss products is now being investigated by the Federal Trade Commission. Private equity firm Pershing Capital Management’s Bill Ackman has been pushing hard for an investigation to be launched, claiming that Herbalife is a pyramid scheme, something the company has vehemently denied.

Lastly, the markets closed the day with President Obama briefly talking to the nation on the geopolitical situation in Ukraine. It will be interesting to see if his remarks have any effect on the markets when trading resumes overnight and tomorrow. - 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 EDT - The U.S. stock market opened lower this morning, but has since firmed up, and for a time, the averages all were in the black. At just past noon in New York, the Dow Jones Industrial Average is off 15 points; the broader S&P 500 Index is down two points; and the technology-heavy NASDAQ is still up four points. It should be noted that the Russell 2000, a small cap index, is making positive strides, too, and that may suggest that speculative sentiment is still alive. Market breadth shows a neutral bias to the session, as rising stocks are just ahead of decliners on the NYSE. Despite today’s partial turnaround, some of the market sectors are still trading lower. There are losses in the consumer names, with declines in the apparel area. The industrial issues are a bit weak, with losses in the construction-related stocks. However, some strength can be found in the basic materials issues. Notably, the precious metals names are advancing, as gold, now at $1,366 an ounce, continues to firm up in price.

Technically, stocks have stalled a bit this week. The Monday-Tuesday turnaround failed to materialize yesterday, and that may have had some traders feeling cautious this morning, especially given the weak indications coming from the international markets. Specifically, Japan’s Nikkei declined sharply overnight, and Europe’s bourses also put in a weak session. Nonetheless, as has been the case so often in this bull market, buyers have stepped in to support equities on any sign of weakness. This has happened to some extent today. For now, the sentiment seems to be improving, as the VIX is retreating slightly to 14.60.

Traders received no notable economic reports this morning. However, tomorrow things pick up quite a bit. Specifically, we will receive data on weekly jobless claims, retail sales for February, and business inventories for the month of January.

We received a few earnings reports this morning. Express (EXPR) is seeing its stock trade notably lower, as the apparel retailer put out weaker-than-expected figures, and issued disappointing guidance. VeriFone (PAY) stock is up, as that company’s results were encouraging. - 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 reports are still trickling in. One of the biggest disappointments came from apparel and accessories retailer Express (EXPR), causing that stock to move sharply lower in pre-market trading. Shares of hotel and casino operator Caesars Entertainment (CZR) are indicating a weaker opening on earnings news, as well. Menswear retailer The Men’s Wearhouse (MW) also issued unimpressive financials, but investors seem to be more focused on the company’s agreement to acquire rival Joseph A. Bank (JOSB), which was announced yesterday. Indeed, MW stock is down just modestly ahead of the bell, despite the significantly larger-than-expected loss it posted in the January term. 

On the bright side, investors were pleased with results and/or outlooks from electric payment device company Verifone Systems (PAY) and snack and nut producer Diamond Foods (DMND). Both stocks are moving higher, in response, with PAY showing considerable strength. – 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 was one of those seesaw sessions on Wall Street yesterday, as the leading averages started off positively; then, shortly before 10:00 (EDT), the averages reversed, with the Dow Jones Industrial Average falling by some 40 points. The market then began a modestly positive reversal, so that some market followers were no doubt again musing about a Monday-Tuesday reversal, such as we have seen in recent months, most notably last week.

However, the bulls, who marched intrepidly into the plus column within an hour of that initial dip, could not sustain the momentum, and by the noon hour on the East Coast we were back in the red, with the Dow falling somewhat more through the afternoon. In truth, though, the losses were never significant, all things considered, although they did attest to some underlying sloppiness after the long bullish run through last month.  

By the close, the averages were all in negative territory, with the Dow leading the way lower on an absolute basis, with a decline of 67 points; the Standard and Poor's 500 Index shed 10 points; the NASDAQ was lower by 27 points; and the small-cap Russell 2000 fell rather sharply, sinking 13 points, or 1.1%. It was not a rout, to be sure, but it was a big enough setback to cause some worries about further losses going forward. And unlike Monday, there was little of any late buying to lessen the sting. Indeed, the leading equity averages generally ended the trading session toward their worst levels of the day.  

Behind this latest profit taking, which had been much milder on Monday were the usual suspects, namely concerns about Ukraine and Crimea, worries about first-quarter earnings, which will be out en masse in another month, and some emerging concerns about valuations, as the long and impressive bull market starts its sixth year. Then, there are the unanswered questions about Malaysia Airlines flight MH370, which went missing en route to Beijing late last week. That disappearance has evoked stirrings about possible terrorism, which is never good for global stability or the stock market. Combine that with frothy valuations, and some investors and stock market pundits are growing skittish--and understandably so.    

As to individual stories, there were a few on another day of sparse economic news and limited corporate earnings data. Of note, though, men's clothiers Jos. A. Bank (JOSB) and Men's Wearhouse (MW) both saw their stocks higher yesterday, with the former concern agreeing to be purchased by the latter for $1.8 billion, thus ending a contentious fight by these two retailers. It should be noted that both stocks hit 52-week highs during the session, ending the day's trading with nice gains. The stocks, it should be noted are up about 50% since the merger talks first got under way.

Elsewhere, data indicated that wholesale inventories had risen in January, while wholesale sales had fallen, which is not a positive development, and could threaten the pace of the economic expansion in succeeding months. Also, a survey of small businesses issued before the start of the trading day, was not encouraging, as that sentiment gauge fell by more than expected in February. Overall, our sense is that the economy will show growth of just 1%-2% this quarter, held back in large part by the weather. We still look for some pickup in strength beginning this spring. Finally, oil and gold prices both fell in the latest session, while the VIX, or the fear gauge, rose modestly, suggesting less tolerance for risk.

Now, as we look out to a new day, we find that the markets in Asia were lower overnight, while in Europe the bourses are notably in the minus column so far this morning. It seems that concerns about China and the potential for slowing growth have some investors on edge globally. In fact, with the aforementioned worries about growth in the world's second largest economy, copper prices are once more getting hit hard, while crude-oil prices are down. Then, of course, the problems in Ukraine continue to fester. This dour combination are, not surprisingly, taking the measure of our equity futures, which now show losses of five and 10 points, respectively, in the S&P and NASDAQ futures. Thus, when traders get down to business in less than an hour from now, they could well be seeing plenty of red arrows. - Harvey S. Katz

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