After the Close
Stocks opened lower this morning, stabilized in the early afternoon, but weakened considerably in the final hour of the day. At the end of the session, the Dow Jones Industrial Average was down 47 points; the broader S&P 500 Index was off seven points; and the NASDAQ was lower by 21 points. It should be noted that the smaller names held their ground today, as the Russell 2000 Index managed to end near the breakeven point. Meanwhile, market breadth showed a divided market, as winners were about even with losers on the NYSE. Leadership was found in the energy and basic materials issues, while the various consumer names dragged down the averages.
Meanwhile, there were no important economic reports released today. The lack of information may have contributed to the session’s lackluster tone. Furthermore, some traders may have turned their attention to the nation’s political arena. Tomorrow will be a light day for economic issuances, as well. However, for traders tracking the commodity markets, the EIA is slated to post the latest weekly crude oil inventory numbers. The price of oil edged up slightly today, to just over $48 a barrel.
Finally, a handful of retailers weighed in with their financial results over the past 24 hours. Specifically, shares of Casey’s General Store (CASY) sank, after that company’s results fell short of expectations. Shares of Fred’s Inc. (FRED) also retreated in response to a disappointing release. Finally, things did not go well for Conn’s (CONN). That issue weakened after the electronics retailer delivered an uninspiring set of numbers.
Technically, equities took a step back today. Although a pause here is to be expected and may even be healthy, given the large gains that have been logged over the past couple of weeks, any such pullback can still be worrisome to the bulls given the market’s extended P/E ratios. – 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 - 12:15 PM EDT
U.S. equity markets began the day modestly to the downside, and have spent most of the morning in negative territory.
In large part, it appears that market participants are in a holding pattern, with a number of headline issues keeping momentum in check. Investors will be on alert Thursday as former FBI director James Comey is set to testify before Congress. The U.K.’s general election is also set for that day, with the most recent terrorist attack in London fresh on voter’s minds. The European Central Bank is also having a policy meeting later this week.
Meanwhile, there are renewed tensions in the Middle East, as several Arab nations in the region have severed their diplomatic relations with Qatar.
As we pass the noon hour of trading in New York, the large-cap equity indexes were all a little off from their highs for the session. The Dow Jones Industrials were down 10 points; however, this was a 55-point improvement from its low shortly after the open. The broader S&P 500 has also made up earlier lost ground, to where it was only down two points. Meanwhile, the tech-dominated NASDAQ, which was the only one of the three to edge above breakeven, had slipped back to two points in the red.
In terms of sector performance, basic materials and technology issues were in the green by about one-third of a percentage point, while most of the remaining segments were down by a similar amount. Reflecting the general shift toward safety, gold is up about a little over a percentage point and flirting with a seven-month high, while Treasury yields have slipped reflecting increased demand.
Taking a quick look at the overseas bourses, London’s FTSE was just slightly shy of the breakeven mark. Although it spent the vast majority of today’s session in the red, it remained within a very tight range. Germany’s DAX was faring the worst of the lot, showing a loss of 1% after spending most of the day in a steady downtrend. France’s CAC-40 also never ventured into the green, and was down about three-quarters of a percentage point as the closing bell approached. – 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 recently triumphant bulls, coming off a strong late-week performance during the initial four days of June, seemed possibly headed for another gain to start the second-five day span of the month, as prices initially inched higher. However, additional gains would prove easier said than done, as the week started out in unimposing fashion, although the eventual losses were just incidental.
Actually, it was a very quiet and undistinguished session for the most part yesterday, following the dispiriting employment news this prior Friday. But that report could not keep the market from rising further to end the week. However, yesterday was different and uneventful. And, as a result, the market not only changed little in the aggregate, but stayed in a very narrow range throughout the trading day, starting the session slightly higher then heading a bit lower and never really deviating from that slight range.
The major influences were geopolitics and domestic political concerns. Specifically, investors grappled with a variety of matters both on shore and off shore. To wit, the coming days will see former FBI Director James Comey testify before Congress. And in the international arena, there was the recent terrorist attack in London to consider and the coming United Kingdom elections. There also is a European Central Bank Committee meeting up ahead this week, which precedes an FOMC meeting in our country a bit later in the month.
In truth, the stock market is in a wait-and-see mode, with the averages still trading near all-time highs, and waiting for some catalyst to drive prices higher still. Perhaps that reason to buy will be the economy, which is meandering about with some pockets of strength, but other points of weakness. The catalyst likely will not be earnings, as data for the first quarter are now virtually all in. Also, unless the government proceeds with the business-friendly policies pushed by the Administration, fiscal policy change is unlikely to unleash the buyers.
So, stocks did little yesterday, as noted, rising nominally early, fading somewhat during the middle of the day, and then closing matters with a modicum of selling, all the while staying in a very tight band. As the session concluded, the Dow Jones Industrial Average was off by 22 points; the S&P 500 Index was lower by just three points; the NASDAQ, under some pressure from a point-and-a half drop in shares of Apple (AAPL - Free Apple Stock Report), was down by 10 points; and the small-cap Russell 2000 was a nine-point casualty.
Bucking the downtrend were the energy stocks and the basic materials issues, with such heretofore out-of-favor issues as driller Schlumberger (SLB) and U.S. Steel (X) gaining nicely. Overall, though, it was a day for just marking time, as the Street readies itself for the coming mid-month FOMC meeting, a Federal Reserve get together that we still believe will result in a quarter-of-a-percentage point increase in the federal funds rate target, notwithstanding the weak employment report.
Looking ahead to a new day, now, we see that stocks were mixed overnight in Asia, while in Europe, the major bourses are showing moderate losses on Middle East concerns. At the same time, oil is flat in early New York postings; and metals prices are higher, led by gains in gold. As to our futures, the early action has a modestly bearish tilt to it in pre-market dealings. – Harvey S. Katz
At the time of this article’s writing, the author did not have positions in any of the companies mentioned.
