After The Close - The final day of the trading week was a very difficult one for those long equities. Indeed, investors were hit with a one-two punch of dour corporate earnings news and escalating tensions in Eastern Europe. Both events prompted heavy selling from the onset of trading on these shores—and the latter weighed heavily on the Europe’s major bourses earlier today, given the close proximity of the euro-zone economies and stock markets to the tensions between Ukraine and Russia. Germany’s DAX sold off sharply, as Russia is a main trading partner with Germany. The turmoil in Eastern Europe is having wide-ranging effects. Just this morning, Visa (V Free Visa Stock Report) noted that lower volumes in Russia is weighing on the company’s performance. The stock of the credit card processor was the biggest percentage decliner in the index of 30 bellwether companies. 

At the closing bell, the Dow Jones Industrial Average, the NASDAQ, and the S&P 500 Index were down 140, 73, and 15 points, respectively. All in all, with the exception of the utilities, there were few places for skittish investors to hide today, as the small- and mid-cap markets also were notably weaker.  Declining issues far outpaced advancers on both the New York Stock Exchange and the NASDAQ, especially on the latter exchange.

From a sector perspective, it was a sea of red ink among the top-10 groups, with the utilities stocks, as noted, the only sector in mild demand. The defensive nature of the group was sought by unnerved investors (The S&P 500 Volatility Index (or VIX), also known as the “fear gauge,” jumped during today’s volatile session.) The biggest laggards were the consumer discretionary and technology stocks, with not even data from the University of Michigan showing that consumer sentiment rose to its highest level this month since last July helping. Within the consumer cyclical space, shares of the casino & gaming and the retail department store operators were pummeled, while the technology sector was hurt by heavy selling of the social media and semiconductor names. Individual laggards in those two areas included Amazon.com (AMZN), Ford Motor (F), and Pandora Media (P).

As noted, the world equity markets were pressured by escalating tensions in Eastern Europe. Specifically, reports of a deadly clash between Ukraine forces and pro-Russia supporters in Ukraine, and Russia’s response of new military exercises near the Ukraine border, unnerved investors. Those events were followed by commentary from the U.S. government that harsher sanctions against Russia could be forthcoming; such measures were cited by Visa as having a negative impact on its volumes from Eastern Europe. We also learned this morning that a major credit rating agency lowered its credit rating on Russia’s bonds to just one notch above the “junk” level. As we have noted here several times in recent months, the situation in the Ukraine remains fluid and could raise the market’s volatility in short notice, which it clear did today.

The earnings news from Corporate America had its share of highs and lows today, but overall would probably be considered disappointing, at best. In addition to the reports noted above, Colgate-Palmolive’s (CL) latest quarterly results disappointed investors. Conversely, shares of Microsoft (MSFT Free Microsoft Stock Report) and Starbucks (SBUX) held their own after the company’s reported quarterly results, with each finishing the session nominally higher. Dow-30 component also put out an encouraging report after the close of trading yesterday.

Looking ahead to next week, the final three trading days of April will bring investors many reports from both the corporate and business fronts. The plethora of earnings reports will be headlined by three Dow-30 companies. Meanwhile, we will get data on consumer confidence (Tuesday) and GDP (Wednesday) before the month ends. But next week’s economic story certainly does not end there, with the Federal Reserve’s two-day monetary policy meeting commencing on Tuesday. We will also get reports on manufacturing activity, personal income and spending, and employment later next week. The hot-button topic of bond-buying tapering is surely to be on the minds of investors next week, with the Federal Reserve’s FOMC meeting and the employment and unemployment data providing the fodder for market pundits. - William G. Ferguson

At the time that this article was written, the author held no positions in any of the companies mentioned.


12:30 PM EDT - The U.S. stock market declined sharply this morning, as traders worried about tensions with Russia and corporate profits here at home. So far, the market has reversed course only modestly, and it remains to be seen how things will play out later in the session. At just past noon in New York, The Dow Jones Industrial Average is off 110 points; the broader S&P 500 Index is down 11 points; and the NASDAQ, now down more than 1%, is shedding 54 points. Market breadth shows widespread selling of equities, as declining stocks are ahead of advancers by about two to one on the NYSE. Most market sectors are trading lower. The technology group is declining sharply, with steep losses in the semiconductor and Internet names. Further, the financial area is weak, as the services stocks are off sharply. In contrast, the defensive utility issues are bucking the downtrend today, as often happens on such days.

Technically, stocks rallied sharply over the past week, so some consolidation is to be expected. Further, the market has been quite volatile lately, and some traders may be prompted to take profits faster than they would under different conditions. Notably, today’s move lower, puts the S&P 500 Index back near its 50-day moving average, located at about 1,860. Further, it seems that much of the selling is concentrated in the technology names, and that won’t likely help the NASDAQ, which has been a weak spot lately, to recover. Traders are feeling a bit more apprehensive, as the VIX is up about 7%, to over 14, today.

Traders received limited economic news this morning. However, the University of Michigan’s consumer sentiment report came in with a final reading of 84.1 for April, which was better than had been expected.

Meanwhile, a few large companies weighed in with results. Specifically, we heard from Microsoft (MSFT - Free Microsoft Stock Report). That issue is trading higher, after the technology giant issued an encouraging report. Investors were less pleased with Amazon’s (AMZN) figures, as that stock is off sharply. - Adam Rosner

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


11:15 AM EDT - The stock market, which had largely meandered about in unprepossessing fashion during the past two sessions, has taken a more definitive turn thus far today. However, this change is clearly not to the liking of the bulls.

On point, our market, taking its cue from Europe, most notably Germany's DAX, which has been pummeled today, is retreating along a broad front so far this morning. All told, as we pass the 90-minute mark of the final trading day of the week, the Dow Jones Industrial Average is off by 155 points, or almost 1%; the Standard and Poor's 500 index is down by 16 points; and the tech-laden NASDAQ is in the red to the tune of 70 points, or a notable 1.6%. The small-and mid-cap indexes are also getting hit rather hard attesting to the broad-based selloff now under way.

Behind this latest assertive move by the bears is a succession of mixed earnings reports and an escalation of tensions with Russia. It is this latter deterioration in relations between East and West that has been largely responsible for the sharp drop in the DAX, as Germany is a big trading partner with Russia.

This one-two punch of mixed earnings news and worsening relations with Russia are overwhelming a better-than-expected report on consumer sentiment issued earlier this morning. All told, this is shaping up as a big day for the recently chastened bears. - Harvey S. 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 Survey The drumbeat of earnings news continues, with one of the bigger disappointments coming from credit card processor and Dow-30 component Visa (VFree Visa Stock Report). March-period earnings were solid, but the stock is moving lower ahead of the bell, probably due to management’s comments that a strong U.S. dollar will likely weigh on revenue growth in the current quarter. Wall Street also took issue with results and/or outlooks from Internet radio operator Pandora Media (P), appliance manufacturer Whirlpool (WHR), household products company Colgate-Palmolive (CL), automaker Ford Motor (F), online retailer Amazon.com (AMZN), and telecommunications equipment company Broadcom (BRCM). On the other hand, investors appeared pleased with quarterly reports from software giant Microsoft (MSFTFree Microsoft Stock Report), China-based Internet company Baidu (BIDU), coffee shop operator Starbucks (SBUX), and drugmaker AbbVie (ABBV), as these equities are moving higher in the premarket.

In other news, shares of Clean Harbors (CLH) are indicating a notably higher opening this morning, after Relational Investors amassed a 9% stake in the environmental company. - 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 old mantra of "an apple a day keeps the doctor away" could well have applied to Wall Street yesterday, only with a slight modification. To wit, the saying could better have been "an Apple a day keeps the bears away." On point, the stock market, after an indecisive, but generally lower, session on Wednesday moved quickly higher at the open yesterday. The impetus for this march forward, meantime, was largely the result of one stock--namely, the strong performance of technology icon, Apple Inc. (AAPL).

Specifically, that iconic company not only posted better-than-expected quarterly metrics, but also raised its dividend, added to its stock repurchase program, and, in a major surprise, voted to split its stock 7-for-1. That was the first such equity distribution of that kind since 2005. We add that stock splits are a rarity these days, in a reversal of form from years ago, when a sharp and extended gain in a stock was often the prelude to a split. Now, as noted, such occurrences are rare, as some companies take a certain pride, it would seem, in having a share price that is in three digits. Apple shares, incidentally, had closed on Wednesday at $524.75; yesterday's massive gain put the tally at $567.77, up $43.02 on the day.

Of course, in this busy reporting period, Apple was not the only high-profile name to cross computer screens with their results, with the day also seeing such well-known names as 3M Company (MMM - Free 3M Company Stock Report), Caterpillar (CAT - Free Caterpillar Stock Report), and Verizon Communications (VZ - Free Verizon Stock Report) show their wares. Among this trio of blue chips, however, only Caterpillar brought out the buyers, with that earth-moving behemoth seeing its stock make a new 52-week high in the process. 3M and Verizon did little to charm investors, and those issues pressed lower in what was ultimately a mixed day for Wall Street.

All told, the NASDAQ, boosted by the aforementioned Apple surge, showed a decent advance on the day of 21 points. However, the Dow Jones Industrial Average, which was in and out of the plus column throughout the session, closed exactly where it began the session, for the first time in 13 years. The Standard and Poor's 500 Index likewise proved indecisive, gaining just three points, while the small-and mid-cap benchmarks closed mixed, with the Russell 2000 Composite easing by almost three points. The market seems in need of some rest here following the stellar gains of the past week and a fraction.

Of course, while earnings have been the principal driver on Wall Street this past fortnight, the market also has been influenced by the ebb and flow of economic reports. Here, the latest session saw the release of somewhat disappointing data on weekly jobless claims, but better-than-expected results for March durable goods orders, an important, but historically volatile, series. Then, there is the overseas situation, which today largely means the latest goings on in Ukraine and the worsening of a Cold War-type standoff between Russia and the United States. Despite the deteriorating relations, and some recent intensification of the dispute in that region, the global markets are still pressing forward with little notable resistance--for now.

Finally, as the old week winds down, we look ahead to a new day that will feature little in the way of hard economic news save for the issuance--within the next hour--of a consumer sentiment survey from the University of Michigan. A small increase in that key metric is the general expectation. Next week, there is a lot on the docket, with the scheduled release of the companion Consumer Confidence survey from the Conference Board, along with the a look at March-quarter GDP, March personal income and consumer spending, April manufacturing activity, and April employment and unemployment figures. Once again, however, earnings will be front and center, as first-quarter issuances continue to come in en masse.

As to the day ahead, meantime, stocks were generally a bit lower in Asia overnight, save for Japan's Nikkei, while they are moving sharply downward in Europe thus far this morning, with particular weakness in Germany's DAX. The pullback on the Continent seems to reflect heightened fears over Ukraine and concerns engendered by the likelihood sanctions will be stepped up against Russia. And over here, following yesterday's uneven showing, the equity futures are suggesting a lower opening in New York when traders gets down to business in less than an hour from now, with the S&P futures off by five points and the NASDAQ futures in the minus column by almost 14 points. - Harvey S. Katz, CFA

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