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After The Close - The major U.S. equity indexes began today’s session with a solid move to the upside, and the Dow Industrials, S&P 500, and NASDAQ all set record intraday highs. However, late afternoon selling erased some of the gains.  

The main news item today was the signing of a preliminary trade agreement between the U.S. and China. The truce hopefully signals the end of the nearly two-year tariff war between the two nations, which had stoked fears over its potential impact on the global economy. Elsewhere, the U.S. Bureau of Labor Statistics released its Producer Price Index results for December. The report indicated that inflation remains well contained, with producer prices edging up 0.1% last month. Additionally, wholesale prices only advanced 1.3% last year, versus a 2.6% increase in 2018. Given that these figures fell short of the Fed’s targeted inflation rate of 2%, it raises the possibility of further rate cuts at some point down the road.

At the closing bell, the 30-stock Dow Jones Industrial Average was up 91 points, while the broader S&P 500 were up a modest six points, and the tech-heavy NASDAQ composite gained seven points.

Performance was mixed among the major market sectors. Utilities led on the upside, gaining 1.3%, while healthcare stocks were up 0.9%. Meanwhile, energy shares were down 0.7%, while telecommunications lost about a third of a percent.

Elsewhere, oil took a step back after the Energy Information Administration reported large increases in U.S. supplies of gasoline and distillates (notably, heating oil). Light sweet crude was down about half a percentage point, to just under $58 a barrel. Altogether, prices have dipped more than 3% over the last five sessions, but the commodity is still up more than 11% from where it was a year ago.

Lastly, trading was mixed on the European bourses today. A late afternoon rally helped Britain’s FTSE 100 to squeeze out a quarter percent advance. However, Germany’s DAX and France’s CAC-40 ended modestly below the unchanged mark. – Mario Ferro

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

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Before The Bell - The stock market, fresh off of another nifty win on Monday and seemingly ready to secure some additional records yesterday, got off to a mixed start as the second trading day of the week commenced. But unlike some recent days, it was the tech-driven NASDAQ that held things back, as the Dow Jones Industrial Average forged ahead. Profit taking in the tech sector held back that composite for a time. It was a different story for the Dow, where the official start of earnings reporting season provided a boost to the financial issues.

On point, shares of Dow component JPMorgan Chase (JPMFree JPMorgan Chase Stock Report) tracked further ahead on a clear profit beat. On the other hand, fellow banking behemoth Wells Fargo (WFC) tumbled on a weaker-than-expected quarterly result. In other areas, tech took a step back during the morning, but seemed to steady itself as the afternoon got under way, at which time the three large-cap indexes were all back in the green, led by a triple-digit advance in the blue chips. That mid-session push lifted the Dow above 29,000.

However, the averages were not able to build on that midday strength, and we headed toward the final two hours of the session, the NASDAQ and the S&P retreated back into the red, while the Dow's advance was halved for a time. Helping the equity market yesterday, as it had on Monday and last week was an apparent diminution in tensions with Iran, at least for the time being. Eager anticipation of today's signing of a so-called phase one trade understanding with China also boosted confidence, as did the start of earnings season.

Meanwhile, the mid-session pullback intensified as we moved into the final two hours of trading, with the Dow soon going negative for a time. The impetus for the afternoon selloff was news that the United States was not removing existing tariffs on China and would not do so until after the election in November even if the two sides sign the expected phase one accord later today. At best, the United States would lower those existing tariffs and not tack on new levies. Hopes for a more extensive trade pact are thus seemingly on hold for months.

But after that swoon, the stock market steadied itself, and the Dow soon started to come back, as there was really no change in the trade pact. Concerns about Iran, albeit less than they had been, were still there. Apparently all this could not keep the bulls down for long, and the buying resumed again, so that as we moved inside the final 90 minutes of trading, the Dow was back up by some 70 points. The buying then would continue as we entered the final hour of trading, at which time the three larger- cap indexes were back in the green.

The market then would spend the remainder of the afternoon going back and forth, with the Dow generally in positive territory, but grudgingly, and with the NASDAQ and the S&P 500 Index mostly under water, but not significantly so. This pattern then would continue into the close, at which time only the Dow was in the green, with a 33-point advance. Losses of five and 23 points were tabulated by the S&P 500 and the NASDAQ, respectively. Looking ahead now to a new day, the futures suggest that the Wednesday market will open with little fanfare. – Harvey S. Katz, CFA

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