After the Close
Stocks moved moderately higher today, adding to yesterday’s gains. At the end of trading, the Dow Jones Industrial Average was ahead 43 points; while the broader S&P 500 Index was up four points; and the NASDAQ was higher by five points. The tone was generally upbeat, as advancers outpaced decliners on the NYSE. Most of the major market sectors advanced, with notable gains in the financial issues. In contrast, the consumer cyclical stocks retreated, with sizable losses in the retailers.
Traders received one important economic release this morning. Specifically, new home sales fell to an annualized rate of 569,000 units during the month of April, falling well short of analyst expectations. Tomorrow the real estate markets will be in the spotlight again, as existing home sales for the month of April are due to be released. Furthermore, the EIA will deliver its weekly crude oil inventory numbers. Then in the afternoon, the FOMC will release the minutes from its latest meeting.
Elsewhere, we heard from a couple of companies over the past 24 hours. In the retail space, shares of AutoZone (AZO) plunged, after that company delivered a weaker-than-anticipated report. Things initially went somewhat better for Toll Brothers (TOL). That stock was up for most of the day (but ultimately settled lower) after the home builder delivered an encouraging release.
Technically, stocks have recovered considerable ground over the past several days. The S&P 500 Index is now just below the 2,400 level, and it remains to be seen if stocks can move much higher from here. Perhaps, if some progress were to be made on the Trump Administration’s agenda, that might help spur on the bulls. – 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
U.S. equity markets opened the day modestly to the upside and, after an early morning lull, have picked up some momentum as noon approached.
There hasn’t been much in the way of market-moving news today. Sales of new homes fell in April after hitting a 10-year peak in March. Although April’s figure was down 11.4% sequentially, it did mark a half percent year-over-year gain. Elsewhere, oil is modestly higher, following news that Washington planned to sell some strategic petroleum reserves over the next ten years as part of a package of planned spending cuts. Oil prices had been firming up in recent weeks, as OPEC members are scheduled to meet on Thursday, and expectations are running high that their production cutback agreement will be extended.
As we passed midday in New York, the major equity indexes were all trading at or near their highs for the session. The Dow Jones Industrial Average was ahead by 44 points. The S&P 500 Index was up five points, and the NASDAQ was holding onto a 10-point gain. With few exceptions the key market sectors were mostly in the green, led by financials and utility stocks, which were each up about half a percentage point in the morning’s trading.
Meanwhile, European markets were generally higher, despite Monday night’s tragic terrorist attack in Manchester, England. Apparently, traders were encouraged by a purchasing managers’ index for May indicating that manufacturing in the euro zone had grown at its best pace in over six years. Altogether, France’s CAC-40 led the pack, with a half percentage point gain as the closing bell approached. Germany’s DAX was up about half as much, while London’s FTSE had given up earlier gains and returned to around the unchanged mark. – Mario Ferro
At the time of this article's writing, the author did not have positions in any of the companies mentioned.
Before the Bell
The bulls, who endured their worst day of the year this past Wednesday on concerns about the future of the Trump Administration, before staging a modest comeback on Thursday and a more substantial rally on Friday, began the current five-day trading span with a further formidable recovery. In fact, as the morning pushed ahead, the Dow Jones Industrial Average surged some 110 points. This meant that in the three days since the earlier meltdown, in which the Dow tumbled nearly 400 points, the blue chip composite has regained much of its footing.
Helping the Street to get back on course seemingly may have been the President's trip abroad. That trip, which will focus on the troubled Middle East, is having the effect so far of taking some attention off of his current domestic troubles. Of course, unless something big and long lasting comes out of that multi-state visit, all eyes will return to Washington soon enough. For now, though, the focus is overseas, in our opinion. And that is clearly a good thing at this point.
Also, most of the companies due to report their first-quarter results have done so, while there is little new of note on the economy. As to earnings, the results have been supportive by and large, while the U.S. economy continues to press forward toward what we believe will be GDP growth of about 3% in the current term. (Note, as well, that GDP growth in the first quarter, was an anemic 0.7%. But that tally is due to be revised this Friday.) In other news, chemicals maker Huntsman (HUN) saw its shares rise and then fall on news that it would be bought by Clariant AG creating a chemicals provider worth about $14 billion.
In other news, Ford Motor Co. (F) gained early in the day on news the automaker plans to make a change at the CEO position, while the defense stocks, led by Dow Industrials component Boeing (BA - Free Boeing Stock Report), gained after President Trump signed $350 billion arms deals. Otherwise, the market, albeit nicely higher, was pretty much news free on this typically quiet Monday, thus providing a nice respite to the high-profile drama of last week.
Stocks then continued their advance in the afternoon, but did not add much to the gains. In fact, stocks pretty much stayed in a tight band with the Dow gaining from 75 to 100 points for the most part. The index that did proportionately better was the tech-driven NASDAQ, which sported an increase of nearly one percent for much of the afternoon. The market then held these formidable increases into the latter stages of the afternoon and into the close.
In all, the Dow ended higher by 90 points; the S&P 500 Index added 12 points, bringing that composite to within six points of the technologically significant 2,400 level; and the NASDAQ added 50 points. The small-cap Russell 2000 also did well rising by 10 points. Gaining stocks also swamped losing issues on the NYSE and most of the key sectors did well. So, it would seem as though much of the damage that was done last Wednesday has been repaired.
Looking out at a new day, we see that stocks in Asia were mostly lower overnight, despite the gains in New York, while on the Continent, the bourses are tracking higher at this point. Also of note, oil is a bit lower as Washington seeks to sell some reserves; Treasury yields are off; and U.S. futures are showing some early strength. So, at this point, the trends would favor a modestly higher start to the action when trading resumes later this morning. – Harvey S. Katz
At the time of this article’s writing, the author did not have positions in any of the companies mentioned.
