After the Close
The stock market put in a choppy, but ultimately constructive session, today. Trader attention was turned to the latest political developments, as the nation’s former FBI director provided testimony to a Senate committee. The proceedings may have created some uncertainty for Wall Street. Meanwhile, at the close of trading, the major averages managed to show generally modest gains. The Dow Jones Industrial Average was up 10 points; the S&P 500 Index was ahead just one point; and the NASDAQ was higher by 24 points. Market breadth showed a mixed performance, as advancers were just ahead of decliners on the NYSE. The major equity sectors were divided, as gains in the technology, financial, and basic materials issues, were offset by losses in the consumer and utility stocks.
Meanwhile, we received just a few economic news items this morning. Of note, initial jobless claims dipped to 245,000 during the week of June 3rd, which was more or less in line with expectations. It is unlikely that this week’s number will influence the Federal Reserve, which meets early next week and will be making an interest-rate announcement. Most traders on Wall Street anticipate that another small rate hike will be approved, given the decent state of the nation’s economy. Tomorrow will be a fairly light day for economic reports, as the only important item set to be released will be the monthly wholesale inventory numbers.
Elsewhere, while few major corporations released their results today, some did make news. Of note, shares of Alibaba Group (BABA) soared after the leading Internet retailer in China suggested that revenues would expand at a dramatic rate in the year ahead. Furthermore, shares of Nordstrom (JWN) moved up on reports that the retailer may be exploring strategic options, such as becoming a privately held business.
Technically, the stock market has been showing some strength lately. For now, traders remain upbeat about the corporate outlook, and seem to be optimistic that the Trump Administration will be able to achieve some of its initiatives. – 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 - 11:40 AM EDT
Following a trio of uneven performances to commence the week on Wall Street, stocks got off to a slightly better start this morning, as hopes among bullish traders that testimony before the Senate Intelligence Committee this morning by former FBI Director James Comey would not reveal overly damaging news for the White House. That good feeling led to a more-than-35-point gain in the Dow Jones Industrial Average during the first 45 minutes, or so, of the session. However, the bulls could not keep the momentum up, and as we reached the one-hour mark, the market had a mixed tone to it.
As trading continued, investors were listening closely to the Comey testimony. Their concern is that very damaging remarks could further slow the already flagging pro-growth business agenda of the President. Expectations for tax reform, loosened regulations, and higher infrastructure spending, all in place since President Trump's election, have helped to fuel the multi-month rise in the U.S. stock market. Any notable additional slowdown or uncertainty in adopting these popular measures could badly damage the bullish sentiment still in place.
Bond yields, meantime, were up negligibly, as the Comey testimony continued, while in Europe, news that the European Central Bank had kept interest rates unchanged, and made no reference to future downward rate adjustments, did not hurt sentiment on the Continent, as the principal markets in the euro zone, led by the Paris CAC-40 and the Frankfurt DAX, continued to edge higher, while London's FTSE 100, eased nominally. However, stocks in the UK also were being affected by today's general election, where Prime Minister Theresa May's ruling Conservative Party is attempting to stay in power in what now shapes up as a close election contest. Finally, gold is up a bit in New York, as is oil, nudging up past $46 a barrel after yesterday's slide.
Meantime, as the morning droned on, stocks weakened a bit further for a time, with the Dow, the S&P 500, and the NASDAQ all edging a bit below the neutral line. But no major trend was emerging, as the Congressional hearings, to this point at least, had failed to bring to the fore major new information. In fact, as we moved closer to the noon hour, the indexes had returned to the black, albeit gingerly. The small- and mid-cap composites also kept their edge, performing somewhat better than their large-cap peers on this eventful Thursday.
In all, as we neared the noon in New York, the Dow Jones Industrial Average had moved out to a 25-point gain; the S&P 500 was ahead by a points; and the NASDAQ was better by 11 points. Gains of more than a half a percentage point each were being tallied by the S&P Mid-Cap 400 and the small-cap Russell 2000, as gaining and losing stocks were about even on the Big Board. Also in a dead heat were the 10 leading equity groups, with continued softness in the energy and utility sectors. So, we seem to be in a holding pattern, with the early edge still in the bullish camp. – Harvey S. Katz
At the time of this article's writing, the author did not have positions in any of the companies mentioned.
Before the Bell
After two modestly weaker sessions on Wall Street to start the new five-day stretch, the stock market bulls returned to their leading role yesterday morning with an early rise in prices. At the morning's best levels, the Dow Jones Industrial Average was up some 50 points. Gains also were tabulated, at the start, by the other indexes, by most of the 10 leading equity groups, and by almost twice as many stocks on the Big Board as not. However, this early spurt did not last, and as we moved into the middle of the morning, a more mixed tone started to emerge.
All the while, the market remained skittish, as traders awaited three key events that are to take place today. On point, the day ahead will feature testimony before the Senate Intelligence Committee by former FBI Director Jamey Comey. That will be the first time that he publicly speaks since being fired from his position. Wall Street also was looking ahead to the election in the United Kingdom, with Prime Minister Theresa May's Conservative Party expected to win. Finally, the European Central Bank is set to release its latest monetary policy decision today. Next week, the Federal Reserve will meet to define policy.
In all, after that buying spurt and subsequent retracement, the U.S. stock market meandered about in modestly higher territory for the remainder of the morning. Of course, the big story stateside will remain the Comey testimony, at least in the very near term, with the Fed taking center stage next week, when in spite of recent sloppiness in the economy, consensus expectations continue to hold that the central bank will lift interest rates at that time. Thereafter, the monetary course is a bit stickier, with anywhere from no rate hike to two such adjustments now expected by yearend.
The early part of the afternoon brought the same kind of range-bound activity seen earlier in the week. However, this time the action was to the upside, if grudgingly, as the Street awaited the Comey testimony. Also, of note, and driving the energy group lower, was a surprise build in crude oil inventories in the latest week. A decline had been expected. As a result, oil prices skidded more than 4% in New York, with a barrel of crude tumbling to below $46 in afternoon dealings. Not surprisingly, oil and oil-related issues took a pounding, with drilling industry leader Schlumberger (SLB) seeing its stock fall by more than 2%.
As we passed the halfway mark of the afternoon's trading, the market started to firm up again, with the Dow, for example, which briefly had given up its morning gains, pushing back up by some 45 points for a spell. Moreover, the small-cap Russell 2000 and the S&P Mid-Cap, both earlier in the red, stiffened their resolve, as well, as they pared their deficits. The reason for the strengthening was that some traders were speculating that the Comey testimony would not be as damaging as feared earlier, and certainly not be an obstruction of justice situation. Now, we shall see.
Stocks then remained higher, at least the major averages did, into the close, with the Dow winding up ahead 37 points, the S&P 500 Index adding four points, and the NASDAQ climbing 22 points. The smaller-cap indexes stayed near the breakeven line, however. Meantime, breaking the day's action down, we see the 10 leading equity groups were evenly divided between gainers and losers, while the Big Board showed a few more losing stocks than winning issues. As before, the big losing sector was the energy group, on the sharp drop in crude prices.
Now, a new day and one full of event risk begins. To this point, we see that stocks in Asia were mixed overnight, while in Europe's the leading bourses are trading a bit higher ahead of the UK vote. Moreover, oil, a huge casualty yesterday, is trading up pennies in early dealings in New York; gold is higher; and Treasury note yields are edging higher. As to our futures on this critical trading day, the early action is supportive to the bullish cause. – Harvey S. Katz
At the time of this article’s writing, the author did not have positions in any of the companies mentioned.
