As to the early action, the gains were fueled, as noted, by additional upbeat profit news, as well as by strong performances earlier in the day in the overseas markets, specifically in Asia and across Europe. Regarding earnings, a whole host of companies were due to report after the close; others had issued their statements before the bell had sounded for the start of trading.  Also of note was the economy. To wit, just after the government posted a gain in personal income on Monday, and the Conference Board weighed in with a near-17-year high in consumer confidence, the ISM issued data showing a healthy level of manufacturing last month.

Specifically, that organization reported that its monthly survey had registered a reading of 58.7 in October, which was a relatively solid number, being well above the 50.0 minimum expansion level. The result also was just modestly below the September tally of 60.8 and the consensus expectation of 59.5. This pace of industrial activity seems consistent with the recent GDP tally for the third quarter of 3.0%. Tomorrow, we will get issuances on the trade balance, non-manufacturing activity, and monthly employment and unemployment tallies. These latter reports could be market movers. In fact, the jobs figures often are.

Meanwhile, the stock market continued to hold firm for much of the morning, but as we headed into the noon hour, some selling ensued, which took the NASDAQ, a session laggard to begin with, slightly into the minus column, while the early increase in the Dow Jones Industrial Average, which had been more than 100 points at its peak, eased back to fewer than 50 points. Meanwhile, the manufacturing report showed particular strength in new orders, prices, and production. All areas gains save for inventories and customers' inventories. All in all, it was another solid economic report.

Nevertheless, the market slipped back further as we headed toward the 2:00 PM (EDT) report from the Federal Reserve, with the Dow's advance pared to fewer than 25 points, while the NASDAQ and the Russell 2000 fell more deeply into the red, on selective weakness in technology and smaller issues, respectively. In all, following the quick start, the market had a mixed look, at best, as we moved toward the central bank monetary decision. Weaker issues on the day included the shares of Apple. Recently strong, that issue had fallen back by more than $3.00 a share at midday.     

The bulls then stiffened their resolve after the FOMC meeting, in which the Fed opted, to the surprise of virtually no one, to keep interest rates unchanged. However, with its positive outlook, especially on the labor market, the bank clearly left the door open for a rate increase at next month's meeting. Our sense is that the Fed, which already has raised interest rates two times this year, will vote for a third hike at that time. Following the expected monetary action, the market perked up some, with the Dow, which had been up just modestly at 2:00, rising toward the high double-digit range. 

But such loftiness could not be sustained, and as the session wound down, so did the averages to a degree, with the Dow, once ahead by about 140 points, ending matters ahead by 58 points. The performance of the other averages were less noteworthy, as the NASDAQ and the Russell 2000 both ended lower on the day. Breaking things down further, gaining stocks held a modest 15-to-13 lead on declining stocks on the Big Board, but were behind, by some 9-to-5 on the NASDAQ. All in all, after the quick start, it was a rather uninspiring finish. 

Looking out on a new day, now, we see that shares in Asia were mixed in overnight trading, while in Europe, the Continent's bourses are now tracking in uneven fashion. As to our markets, one day after the Fed meeting and one day ahead of key data on employment, unemployment, and non-manufacturing, the equity futures are now pointing to a modestly lower opening.

— Harvey S. Katz, CFA

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