After The Close
The stock market delivered a choppy, and somewhat weak, performance today. At the close of trading, the Dow Jones Industrial Average was down 59 points; the S&P 500 Index was off six points; and the NASDAQ was lower by 19 points. Market breadth showed a divided session, with advancers just about even with decliners on the NYSE. The energy and basic materials issues led the market lower, while the defensive high-yielding utility issues held up relatively well.
It was a light day for economic news. However, according to a report from the Energy Information Agency (EIA), domestic crude oil inventories increased by roughly 5.5 million barrels during the latest recorded week. The price of oil moved lower today, possibly as a result of the news. Tomorrow will be a busier day, as we will get a look at the weekly initial jobless claims and a durable goods orders report.
In the corporate arena, the first-quarter earnings season continues to unfold. Over the past 24 hours, we heard from a few large names. In the Dow, shares of Caterpillar (CAT – Free Caterpillar Stock Report) moved lower on concerns about rising materials costs. However, Boeing (BA – Free Boeing Stock Report) shares managed to advance, even though the aerospace giant pulled its guidance, amidst ongoing uncertainty surrounding the 737 Max 8 plane.
Technically, the stock market has staged a massive advance so far this year. After declining in late 2018, the broader S&P 500 Index is back near record-high ground. While it would seem some consolidation may soon be in order, the bulls have the upper hand, for now.
- 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
After a very hesitant session to begin the new trading week on Monday, the bulls stepped it up nicely early yesterday morning, with the stock market advancing from the opening bell. The primary catalyst was corporate earnings, with this being the busiest week of the present profit cycle. At the head of the earnings class were Coca-Cola (KO – Free Coca-Cola Stock Report) and United Technologies (UTX – Free United Technologies Stock Report), with each posting stronger results sending the shares nicely higher. Both companies are domiciled in the Dow Jones Industrial Average, which after just a modestly higher opening, took off later in the morning.
In fact, as we neared the noon hour in New York City, the Dow had surged to a gain north of 170 points, primarily on strength in a group of blue chip components. The NASDAQ, meantime, was ahead by 100 points on strong gains in selective technology issues. It was a stellar session developing. In other news, Wall Street also kept an eye on oil prices, as they hit their highest level of the year yesterday, with global supplies suddenly an issue after the United States announced some further restriction on oil imports from Iran. One thing not rising were Treasury note yields, as they eased modestly on the day.
In other news, the government reported that sales of new single-family homes jumped to a seasonally adjusted annual rate of 692,000 properties in March. That was better than the 650,000 home sales expected. It also was the highest reading in more than a year and helped to take some of the sting out of a decline in the sales of existing homes last month. (The existing home sales data were issued on Monday). The upbeat new home sales report also helped sentiment somewhat. But the big story has been earnings, and with earnings and temperatures both climbing in sunny downtown New York yesterday, the market continued to gain.
The good market news, meantime, would continue into the afternoon, and with those upbeat tidings would come additional stock market gains, as the Dow would climb to an advance of nearly 200 points. The NASDAQ, meantime, would continue those gains, as would the S&P 500 Index, while the Dow would ease off somewhat in late afternoon. The smaller indexes also would hold onto their mid-session gains. For the most part, this strength was the result of a generally strong earnings season, with a little assist from the solid data on new home sales.
When all of the numbers were in, the Dow had closed up by 145 points; the S&P 500 ended higher by 26 points; and the NASDAQ ended matters ahead by 106 points. Advancing stocks overwhelmed losing issues, meanwhile, as the small-cap indexes prospered as well. All told, it was a big win for the bulls, who now have a number of other large-cap issues follow and evaluate as their quarterly metrics are issued. Taken together, it was a stellar showing and an indication of just how strong this earnings season is turning out to be, despite earlier dour projections.
Now, a new day begins, and we see that stocks were mixed in Asia overnight, while in Europe, the bourses are posting early losses. Elsewhere, Treasury note yields, off yesterday, are down further and oil prices, which have been in rally mode are falling slightly. Finally, U.S. equity futures, following yesterday's fireworks, are nominally gaining ground thus far this morning.
– Harvey S. Katz, CFA
