After The Close
The stock market got off to a solid start this morning, pulled back around midday, but managed to selectively firm up in the afternoon. At the close of trading, the Dow Jones Industrial Average was ahead 73 points; the broader S&P 500 Index was up 5 points; and the NASDAQ was just nominally higher. Market breadth was positive, with winners outpacing losers on the NYSE. Further, most of the major market sectors made progress, with notable gains in the energy issues. However, the technology stocks and some consumer names were a bit sluggish today.
There were a few economic reports released this morning. Specifically, housing starts dipped to an annualized rate of 1.236 million units during the month of February. Building permits also softened during the period. Elsewhere, industrial production increased 1.1% for the month of February, which was better than analysts had anticipated. Finally, The University of Michigan preliminary consumer sentiment figure came in at 102 for the month of March, which surpassed the consensus forecast.
In the corporate sector, a couple of specialty retailers put out financial reports over the past 24 hours. Specifically, shares of Ulta Beauty (ULTA) rose nicely today, even though the company delivered a mixed report. In contrast, shares of Tiffany (TIF) retreated in response to a disappointing release.
Technically, the stock market managed to firm up today, after a series of weak sessions. Today’s trading keeps the S&P 500 Index just above its 50-day moving average, located at the 2,750 level. Meanwhile, it remains to be seen how the market will fare next week, as the Federal Reserve will weigh in with an interest-rate decision on Wednesday afternoon. Most on Wall Street expects that a small hike in rates will be implemented, but the commentary and tone of the remarks will be of importance, as well.
— Adam Rosner
At the time of this article’s writing, the author did not have positions in any of the companies mentioned.
Before The Bell
Following three consecutive losing sessions in the stock market to begin this second full week of the month, Wall Street hit the Ides of March yesterday with some initial gains, as the Dow Jones Industrial Average quickly raced out to a triple-digit advance. That early rise would briefly fade, but resume as the morning moved along. All the while, however, investors remained on edge due to the lingering concerns about possible trade wars. For the most part, the trade worries center on China, with the President thinking of slapping tariffs on at least $30 billion in imports from that country.
The worry, clearly, is that countries around the world could retaliate by implementing their own tariffs on U.S.-made goods. Such a reaction could spark a feared trade war. This would be especially harmful to larger multinational corporations that conduct a lot of business overseas. In recent days, shares of Boeing (BA – Free Boeing Stock Report), the best performer among the 30 stocks domiciled on the Dow Jones Industrial Average during the past two years, has been the largest casualty on that index. Meantime, in other news, jobless claims dipped in the latest seven-day span and Larry Kudlow has been named to head the Council of Economic Advisors.
Kudlow, a popular choice on the Street, would replace the departed Gary Cohn as the President's chief economic advisor. His naming helped to underpin the bulls somewhat, but the focus remained on trade as the penultimate session of the week moved along yesterday morning. As to the market, the aforementioned Boeing continued to struggle, losing another six points early on in the session on those China concerns. More so than not, however, the Dow held its own, with several nice moves to the upside for individual issues as we neared the noon hour in New York. The weakness mainly involved the smaller-cap indexes.
The stock market then picked up some notable strength as the afternoon began, with the Dow surging to a mid-session-best gain of almost 300 points on lessening fears of a trade war. However, that comeback could not sustain itself, and as we moved deeply into the afternoon, the Dow's advance wilted, while the S&P 500 and the NASDAQ fell into the red. As before, the S&P Mid-Cap 400 and the small-cap Russell 2000 led the way lower. The bifurcated market then would continue over the final hour of the session, as nervousness continued to blanket the Street.
At the close, the Dow would retain 116 points of its once-formidable advance, while losses of two and 15 points, respectively, would be sustained by the S&P 500 and the NASDAQ. The S&P Mid-Cap 400 and the small-cap Russell 2000 also would end the day lower, while losing stocks would hold a large edge over gaining issues. Boeing, a big loser over the past several sessions and earlier in the day would end the session just nominally under water. Now, heading into the final trading day of the week, the key economic news story will be the pending release of February industrial production and factory use figures.
As to the current session, shares in Asia were trading lower overnight; on the Continent, meantime, the bourses are working slightly higher at this hour. Elsewhere, oil prices are pennies ahead and Treasury note yields, which ended at 2.83% yesterday, are now moving along at 2.82%. Finally, U.S. equity futures are suggesting a narrowly positive start when trading resumes a little later this morning. As has been the case recently, though, eyes will be focused on the trade situation as nations around the world strive to contemplate what the latest moves by our country means for them.
– Harvey S. Katz, CFA
At the time of this article’s writing, the author did not have positions in any of the companies mentioned.
