After the Close
The stock market got off to a lackluster start this morning, and was unable to find much direction in the afternoon. Traders likely spent the day looking closely at the latest corporate earnings announcements, while also keeping an eye on developments in Washington. Of note, the Trump Administration revealed that it would unveil a tax reform plan shortly. However, limited details were provided. At the close of trading, the Dow Jones Industrial Average was down 31 points; the S&P 500 was off seven points; and the NASDAQ was lower by six points. Market breadth was slightly negative, with declining issues outpacing advancers by a narrow margin on the NYSE. From a sector perspective, weakness was found in the healthcare and financial issues, while some strength was seen in the defensive utility names.
Meanwhile, traders received only one notable economic report today. Specifically, existing home sales rose to an annualized rate of 5.71 million units in the month of March. This showing was higher than analysts had expected, and was also a bit better than the figure posted in April. Continued strength in the housing market is encouraging to see, as this area of the economy is quite sizable. Hopefully, the real estate markets will hold up well going forward, especially if the Federal Reserve chooses to tighten monetary policy again and mortgage rates move higher.
In the corporate arena, we again heard from a few widely held names. Specifically, shares of Visa (V - Free Visa Stock Report) edged up slightly today, but ended flat, after the financial giant delivered favorable results late yesterday afternoon. Shares of General Electric (GE - Free GE Stock Report) slumped, as investors were not overly impressed with the conglomerate’s latest report.
Technically, at the start of March, the stock market pulled back, and has remained selectively weaker since. It is not clear if the first-quarter earnings season will be favorable enough to propel stocks much higher, especially with the market already trading at elevated multiples. Further, the month of May will soon be approaching, and (if the adage is true) some traders may be inclined to lighten up for the summer months. - 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 - 12:10 PM EDT
The major U.S. indexes traded in a tight band early on Friday morning, before concerns stemming from geopolitical developments dragged the averages lower. The mid-morning selling effectively offset what has so far been a largely positive quarterly earnings season. Specifically, the upcoming first round of elections in France is being closely watched. A terrorist attack in Paris this week has added further doubt over the outcome there. Additionally, though recent tension with North Korea has abated, it underscores looming uncertainty over the United States’ foreign policy on that continent going forward. By the time the midday hour arrived, overall positivity from Corporate America’s quarterly check-in encouraged the bulls to make another push, and market breadth showed an even distribution of advancing and declining issues.
Before the Bell
Following a mostly higher, but still somewhat choppy, first three trading days of the week, which had been heavily influenced by the rising tide of largely supportive results from Corporate America, the stock market started out the penultimate session of the week nicely to the upside, and then took it from there, ultimately fashioning a wire-to-wire win for the bulls. The latest gain in the market saw the Dow Jones Industrial Average push gradually higher over the course of the morning, finally gaining a morning-best increase of more than 150 points by noon on the East Coast.
As before during the week, the gains were largely on the back of supportive earnings metrics. And the gains continued to come, with the Dow's advancing passing the 200-point mark by mid-afternoon, pushing that composite back above 20,600. Meanwhile, the NASDAQ was doing even better on a percentage basis, cracking the 1% gain marker, while the small-cap Russell 2000 was ahead by better than 1.1%, thereby modestly leading the way forward. It seems as though at least for one day, the vexing international issues were moving into the background.
