After the Close
The stock market put in another impressive performance today, adding to yesterday’s gains. At the close of trading, the Dow Jones Industrial Average was ahead about 232 points; the S&P 500 was up 14 points; and the NASDAQ was higher by 42 points. The buyers were out in force today, as advancers easily outpaced decliners on the NYSE. Further, most of the major stock sectors forged ahead, with notable gains in the healthcare, technology, and energy issues. However, the defensive utility names did not participate in the rally, as traders were likely moving their capital into potentially more rewarding stocks. Telecom stocks also lagged.
Meanwhile, today’s economic news was encouraging, for the most part. Specifically, new home sales advanced to an annualized rate of 621,000 during the month of March. This figure was up from the 587,000 number posted in February, and was also higher than had been anticipated. On a related note, according to the Case-Shiller index, home prices increased 5.9% in the month of February, pointing to ongoing strength in the residential real estate sector. In contrast, according to Conference Board, consumer confidence softened slightly in the month of April. Tomorrow will be a light day for economic news, but the pace picks up again on Thursday. On Friday we get a look at the advance estimate for first-quarter GDP.
Elsewhere, a few large corporations posted strong results over the past 24 hours, and that likely helped buoy the major averages. Specifically, shares of Caterpillar (CAT - Free Caterpillar Stock Report) moved sharply higher, after the equipment giant delivered a better-than-expected set of numbers and provided an upbeat outlook. Shares of McDonald’s (MCD - Free McDonald's Stock Report) also forged ahead, in response to a good report.
Technically, stocks have strengthened quite a bit over the past few days. Today’s move puts the Dow Industrials close to the 21,000 mark and the NASDAQ past the 6,000 level. This may hold some psychological sway with investors. – 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 opened and remained strongly higher Tuesday morning, as corporate earnings season and a sigh of relief from the French elections opened up some room to run for the bulls. The positive undertones are being supported by the widespread buying of small-cap equities, while nine of ten market sectors have held onto solid aggregate gains through the noon hour in New York. And, though President Trump’s recently announced plans for a massive tax cut continue to embolden the bulls as they lift the averages higher, sustained positivity from the earnings season remains the major driver of today’s trades.
The Dow Jones Industrial Average was the biggest benefactor of what has so far been a positive run of earnings from Corporate America. Caterpillar (CAT – Free Caterpillar Stock Report) has been the biggest mover on the index, reporting better-than-expected results and increasing its earnings forecast. As has been the case on the broader market, the Dow’s financial components are up big today due to the aforementioned tax reform update. While the blue chip grouping is leading the way (up as much as 244 points), the S&P 500 and NASDAQ are up significantly today as well, adding 16 and 39 points, respectively, at their morning peaks.
Meanwhile, investors were given some mixed updates from the business beat. That is, while new home sale numbers hit eight-month highs in beating consensus estimates during the month of March, a disappointing consumer confidence report damped the enthusiasm somewhat. Still, the 120.3 reading registered by the Index in April is only a slight slip from the 124.9 high in March, so we doubt investors are too concerned over the sequential decline.
As for oil, domestic crude prices continued to flounder this morning. Inventory levels stateside have failed to taper in recent months, adding pressure on OPEC as it vies to extend the six-month drilling accord that ends in June. Traders appear uncertain of the likelihood of an expanded agreement, and U.S. crude has fallen $0.14 per-barrel on the doubts.
Looking out at the rest of the week, another run of solid earnings from a lineup of heavy hitters in the aerospace, energy, and technology industries ought to stoke the case of the bulls as the week progresses. While we believe some resistance exists in the way of government shutdown speculation, as well as news items on the geopolitical front, strong quarterly updates will likely continue the recent rebound registered on the stock exchange. – 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 mostly higher post-Easter week on Wall Street during the latest five-day stretch, the stock market opened trading yesterday on an emotional high and began the current week with a wire-to-wire win for the bulls. This time, however, the strength had less to do with domestic affairs than with global events--namely Sunday's opening round of France's Presidential election. To wit, after weeks of uncertainty, French centrist candidate Emmanuel Macron's narrow plurality win over far right candidate Marine LePen brought a collective sigh of relief to markets worldwide.
This technical win by the centrist candidate set up a concluding vote early next month, in which Macron is widely favored to win. Stateside, meantime, President Trump has promised a massive tax cut that he believes can be passed quickly. So, stocks roared ahead in our country, especially the financials. As part of the major upsurge, the NASDAQ jumped to an intra-day record early on, while the Dow Jones Industrial Average soared more than 200 points. But while U.S. affairs had some part in the rally, it mostly was France's election that aided the bulls.
As the morning ended, the market held onto strong gains, with the Dow Jones Industrials comfortably above the 200-point gain marker. All of the other averages were strongly in the plus column, as well, with not only the financials gaining notably, but also the technology stocks. It seems that complacency was again the rule of the day. Not surprisingly, the fear gauge, or the VIX, slid anew. In all, with the French election risk seemingly on the decline and earnings season a decent one so far, Wall Street's bulls were clearly in charge.
The buying then continued into the afternoon, with the equity market coasting to its largest increase in some seven weeks, and in the process wiping out all of April's losses to this point. Also of note, the S&P 500 technology sector, which plummeted after the 2000 market surge, has made up its lost ground after 17 years. Breaking the advance down, as the buying continued into the close, we saw that all of the 10 leading equity sectors gained on the day. Among the leaders were the financials, technology, and the industrials.
Also, advancing stocks held a strong lead over declining issues on the Big Board, with a plurality of some five to two. Things were also very similar on the NASDAQ. Among big individual gainers, we saw a better-than-four percent jump in shares of banking giant Bank of America (BAC). The steel stocks also did well again on the hoped-for reduction in imports. All told, the Dow added 216 points; the S&P 500 Index was better by 25 points; and the NASDAQ soared by 73 points, to the aforementioned all-time record.
Looking out at a new day now amid hopes by the bulls that we will not see a Monday-Tuesday reversal, we see that stocks were nicely higher in Asia overnight, while in Europe, following the prior day's bullish fireworks, we see that stocks are thus far inching forward in early morning dealings. Elsewhere, oil is pennies higher; yields on U.S. Treasury securities are up a bit; and U.S. stock market futures are ahead. Going forward, after yesterday's heroics, the focus will be on Washington, as Congress strives to avoid a government funding shutdown on Friday. – Harvey S. Katz
At the time of this article’s writing, the author did not have positions in any of the companies mentioned.
