After the Close
Stocks opened lower this morning, but managed to selectively recover as the day progressed. At the end of trading, the Dow Jones Industrial Average was down 36 points, while the broader S&P 500 Index was ahead slightly, and the NASDAQ was higher by eight points. Market breadth showed a divided session, with advancers just slightly ahead of decliners on the NYSE. From a sector perspective, the consumer stocks displayed leadership. The utilities also had a good day. In contrast, the financial and industrial issues weighed on the market.
There were few important economic reports released this morning. However, tomorrow will be a busier day for news. Specifically, initial jobless claims for the week of February 4th are slated to be released. In addition, wholesale inventories for the month of December are due out.
Meanwhile, traders continue to sift through the numerous corporate earnings reports being released daily. Late yesterday, we heard from TheWalt Disney Company (DIS – Free Disney Stock Report). That stock advanced modestly today, even though the media giant delivered a somewhat mixed report. Things did not go as well for Gilead Sciences (GILD). That issue fell sharply after the drug company provided investors with disappointing guidance.
Technically, equities have been pressing ahead, as we move further into 2017. This likely reflects a generally constructive fourth-quarter earnings season. We have already heard from most of the large names, and now, the smaller companies will be weighing in with their numbers. – Adam Rosner
At the time of this article’s writing, the author did not have positions in any of the companies mentioned.
Mid-Day Update - 12:00 PM EST
Most U.S. stocks were down early on Wednesday morning, with each of the three large-cap indices holding onto losses for most of the first two hours of trading. But sentiment turned around 11 A.M. in New York, when the S&P 500 and NASDAQ groupings rallied into positive territory for a time. Satisfactory earnings performances and an uptick in domestic oil valuations both helped to pare much of the losses from the opening bell, with the latter occurring due to a drop in stockpiles. Still, the Dow Jones Industrial Average was held back by Goldman Sachs (GS - Free Goldman Sachs Stock Report) and other large-cap laggards. The blue chip index was down roughly 55 points at lunchtime on the East Coast.
While the Trump Administration’s plans to roll back regulations and reform the tax rates remain causes for optimism, corporate earnings season is having an outsized influence on trading this week. This morning, pharmaceutical giant Allergan (AGN) stock bounced on a strong year-end update and improved guidance for 2017. Time Warner (TWX) reported solid fourth-quarter results, led by its premium cable-turned-streaming media stalwart HBO and better-than-expected contributions from its Harry Potter spinoff film from November. Moreover, investors appear to be warming up to Walt Disney Company (DIS - Free Walt Disney Stock Report) shares. The entertainment stock slipped during after-market trading, but has held on to a near-1% advance this morning, due in part to CEO Bob Iger’s intention to stay on at the helm beyond his proposed 2018 retirement date , as needed.
After the bell, Whole Foods (WFM), CenturyLink (CTL), and Prudential Financial (PRU) are among the set of corporations scheduled to file quarterly releases. Tomorrow, Coca-Cola (KO - Free Coca-Cola Stock Report) and Kellogg (K) are just two of the companies that will report results. We expect earnings will play a large part in determining the broader market movements through the remainder of the month. Meanwhile, investors will be afforded some updated data from the economic front on Friday. The consumer sentiment reading from the University of Michigan and the monthly factory order filing ought to add clarity for traders trying to quantify the strength of the economy.
Looking out to the afternoon, the bulls appear determined to wrestle back some control of the market. Six of the ten major market sectors are exhibiting aggregate gains on the day, while the 1.4-to-1 edge held by declining issues over advancers is due largely to persistent weakness in small-cap trading. – Robert Harrington
At the time of this article’s writing, the author did not have positions in any of the companies mentioned.
Before the Bell
After a ho-hum session to start the new week, Wall Street got rolling again yesterday morning, and within minutes of the open, the Dow Jones Industrial Average had sprinted to a better-than-100-point gain. The other indexes followed suit on what appeared to be a resumption of the strong employment-induced run-up enjoyed this past Friday. Most equity groups joined the forward march of the market, even as lower oil prices set into motion some selling in the energy sector. Things then continued along the merry bullish path for more than an hour.
However, the bulls could not sustain the solid gains, with selective selling muting the increases as the morning progressed. In spite of these slowing gains, the Dow and the NASDAQ managed to set all-time highs during the morning. Even as the gains moderated, however, aerospace giant and Dow component Boeing (BA - Free Boeing Stock Report) still had its way, posting the session's best increase to that point. The old-line tech stalwart and fellow Dow issue IBM (IBM - Free IBM Stock Report) also helped the bullish cause, rising to near a 52-week high. The oil stocks in the Dow faltered, though, keeping a more dramatic improvement at bay.
The equity market continued to bump along with modest gains in the afternoon, just as it had with small losses the prior session. A number of major companies, which had reported earnings before the opening bell, continued to support the day's bullish action. In all, almost two-thirds of reporting companies have beaten consensus. Of course, given the strong market and the ever-loftier P/E multiples, a decent showing on the corporate front is likely needed to keep things going. Also, the market has been receptive to the business-friendly tone coming out of Washington, even as confusion reigns in some other areas.
Meanwhile, the modestly firmer tone continued into the mid-and late afternoon, with the Dow's improvement remaining in the 25 to 50-point range, for the most part. Small gains also were being posted by the two other large-cap composites, notably the S&P 500 Index and the NASDAQ. But the S&P Mid-Cap 400 and the small-cap Russell 2000 labored, staying in the loss column throughout. The bullish case, to be sure, was somewhat hurt by hawkish monetary comments from the President of the Philadelphia Federal Reserve, in which he cautioned that a March rate hike could well be in play.
As to the late action, the advance did run into headwinds as the session wound down, with the S&P 500 Index going negative for a brief spell, before edging back into the black at the close, and the losses in the S&P 400 and the Russell 2000 rising to a degree. Meantime, the Dow's once formidable rise was whittled away further, as was the increase on the NASDAQ. At the same time, losing stocks beat out winning issues on the NYSE, in a clear reversal from earlier in the day, while six of the 10 largest sectors saw final declines, with the energy groups falling by almost 1.4%.
Looking out now at a new day, we see that stocks in Asia were higher overnight, rising about a half a percentage point, while they are mixed in Europe so far this morning. Oil, meantime, is weaker again after falling yesterday, with both WTI and Brent crude lower in price. Finally, our futures are just incrementally higher in the early going. As to individual stocks to look at, shares of entertainment giant and Dow component Walt Disney (DIS - Free Disney Stock Report) are likely to open somewhat lower after the company reported a mixed quarter late yesterday. – Harvey S. Katz
At the time of this article’s writing, the author did not have positions in any of the companies mentioned.
