After The Close
The U.S. stock market put in a directionless and somewhat lackluster performance today. At the close of the session, the Dow Jones Industrial Average was down 28 points; the broader S&P 500 Index was off nominally; while the technology-heavy NASDAQ managed to cling to a four point gain. Market breadth showed a divided session, with advancers more or less even with decliners on the NYSE. The conglomerates and basic materials issues displayed some relative strength, while the financial names underperformed.
There were no major economic news items posted today, and the lack of information probably left traders searching for direction. Tomorrow, the pace should pick up, as several reports are due out. Specifically, we will get a look at the latest weekly initial jobless claims figures. Existing home sales for the month of November will be released, as well. In addition, the Conference Board will provide its monthly report of the leading indicators.
In the corporate arena, we recently heard from a few widely followed names. Specifically, shares of FedEx (FDX) moved sharply lower after the transportation giant delivered softer-than-anticipated numbers and tempered its outlook, noting continued global weakness. In contrast, shares of Steelcase (SCS) surged in price after the furniture company posted a solid quarterly report.
Technically, equities have moved notably higher over the past couple of weeks. Recently, talks with China have headed in the right direction, and traders seem relieved that additional tariffs will not be put in place at this time. Obviously, the situation in Washington bears some watching, with an impeachment vote looming, but Wall Street seems to be shrugging off most of the news there.
– Adam Rosner
At the time of this article’s writing, the author held positions in one or more of the companies mentioned.
Before The Bell
Wall Street tried to extend its four-day rally yesterday morning and to a large extent it succeeded, as the Dow Jones Industrial Average stormed ahead after an uncertain open to push higher by some 75 points as the noon hour arrived. But the S&P 500 Index, the NASDAQ, and the small-cap Russell 2000 Composite generally were marking time as the morning ended. Helping the market was a solid gain from streaming giant Netflix (NFLX), which disclosed strong membership growth in some key geographic regions. The latest upturn in equities followed a solid advance to start the week on Monday.
As before, the stock market was underpinned by the preliminary and partial trade agreement reached over the weekend between the United States and China. This so-called phase one accord will hopefully be followed by a more definitive longer-term pact. This latter meeting of the minds, though, may not take place until much later next year, if speculation on that matter proves accurate. Meanwhile, as part of the deal, which has not yet been signed by the parties, China has agreed to purchase billions of dollars in agricultural products from the United States.
This preliminary trade deal, albeit partial in scope, still has been pivotal in keeping the rally alive and well on Wall Street, and some are speculating that such modest progress could be paving the way for another solid year in 2020. Regarding the equity market, stocks continued to firm up as the afternoon began, with most of the improvement centered in the Dow, which a few minutes after the noon hour arrived had risen by some 85 points. However, the other indexes largely continued to mark time, in this relatively narrow uptick in an overbought equity market.
Meanwhile, there was the economy to consider, and on that front, the government released a pair of constructive monthly reports yesterday. First, we received good news in homebuilding, where housing starts gained 3.2% in November, coming in at 1.365 million annualized units for the month. At the same time, building permits rose by 1.4%, to 1.482 million homes during the latest month. In another report, the Commerce Department issued figures showing that industrial production had jumped by 1.1% in November, following a 0.9% drop the prior month. Also, capacity utilization climbed nicely, as well.
The market then would continue to hold onto solid gains into the final hour of trading, with the Dow entering the home stretch ahead by more than 50 points. As before, the other composites largely moved in place, although there still was a slight bias to the upside as the day progressed. Things then would not change much as the closing bell approached, as the major averages all were holding slight. Specifically, the Dow was up 31 points; the S&P 500 was ahead a point; and the NASDAQ was up nine points. Now, a new day gets under way and the early signs point to a somewhat higher opening when trading resumes.
– Harvey S. Katz, CFA
At the time of this article’s writing, the author held positions in one or more of the companies mentioned.
