After the Close
The stock market was quite volatile today, as traders grappled with, and ultimately shrugged off, some breaking political news. Of note, equities moved higher this morning, sold off sharply at around 11 AM (EDT), but managed to advance irregularly in the afternoon. At the close of the session, the Dow Jones Industrial Average was little changed, the S&P 500 Index was off slightly, and the NASDAQ was higher by 17 points, on strength in technology. Market breadth showed a mixed performance, as advancing issues were just about even with decliners on the NYSE. From a sector perspective, the energy and basic materials issues pressed ahead, helped by slightly higher crude oil prices. In contrast, the financial stocks retreated.
Meanwhile, just one notable economic news item was released this morning. Specifically, wholesale inventories increased 0.4% during the month of May. This showing was slightly stronger than had been anticipated, and was also better than the decline logged in April. Tomorrow, the Federal Reserve will be in the spotlight. The Fed will deliver its Beige Book summation for the month of July, and central bank Chair Janet Yellen will be address the House Financial Services Committee.
Elsewhere, it has been a quiet day for corporate profit reports. However, shares of PepsiCo (PEP) moved lower, even though the beverage maker weighed in with decent results. Apparently, some investors noted that higher prices offset somewhat sluggish demand. It should be mentioned that the second-quarter earnings season is set to begin, with several big banks, including JPMorgan Chase (JPM – Free JPMorgan Stock Report) and Wells Fargo (WFC), due to report in the coming days.
Technically, the stock market has been a bit choppy lately and traders could use some direction. As companies post their latest numbers, a clearer picture may emerge. – 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 started off the day in mixed fashion, and that remained the case until late in the morning session.
As we passed the noon hour of trading in New York, all three of the major indexes had seen their mid-morning rallies peter out, but had bounced off their lows. Stocks headed south following further developments regarding Russia’s alleged involvement with the Trump campaign.
In all, the Dow Jones Industrials plummeted 160 points from its late-morning peak, but had bounced back to a loss of just a few points. Meanwhile the broader S&P 500 Index, which has spent most of the morning in the red, was also near its nadir, down five points. Lastly, the tech-heavy NASDAQ, which had been in the green for most of the session, eventually succumbed to the downdraft, but then bounced off the low to just above the unchanged mark.
At mid-day, most of the main market sectors were showing losses of a quarter percent or more, but energy shares were ahead by a similar amount above breakeven. Elsewhere, oil prices took an early dip on reports that Saudi Arabia was pumping more oil than its agreed-on OPEC limit. Prices have recovered significantly, showing a gain of over half a percent.
There’s not much in the way of market moving economic news today, but traders will be paying close attention when Federal Reserve Chair Janet Yellen speaks before the House Financial Services Committee tomorrow and the Senate Banking Committee on Thursday. Later in the week, we will be getting reports on jobless claims, inflation, and June retail sales, along with some initial second-quarter earnings releases.
Trading in the European bourses also lacked direction for most of the day, but echoed the downturn in U.S. stocks as the closing bell approached. London’s FTSE and France’s CAC-40 were hit the hardest, shedding about half a percentage point, while Germany’s DAX only dipped slightly into the red. – 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
Wall Street, which had eked out a modest gain the week before, principally on the backs of a late-rally to end the five-day span on Friday, commenced the new week on a down note, as some profit taking gave traders initial cause to lighten up positions. But that selling lasted just moments, and the stock market, which got a healthy lift late last week on the release of constructive economic data, quickly resumed its climb. As for the earlier rally, Friday had seen the Labor Department issue figures showing a stronger-than-expected rise in June non-farm payrolls.
The solid jobs increase, coupled with earlier upbeat reports on manufacturing and non-manufacturing, gave the economic bears cause to reconsider their erstwhile pessimism about the direction of the long business expansion. The latest data, in fact, seemed to suggest that the second quarter's improvement might well have been rather impressive and that the pending gains in the current interim and the concluding three months, might well be decent, as well.
But the market's early comeback yesterday morning, albeit encouraging at first, never really amounted to much, and the Dow Jones Industrial Average, which had fallen back by more than 40 points in the first half hour of the session, could not get all that far onto the plus side of the ledger, topping out with a mid-session increase of some 30 points. Things went somewhat better on the NASDAQ, though, where a gain of more than 35 points was seen late in the day on strength in the tech stocks.
The rally, however, did not extend to the smaller-cap sector, as the Russell 2000 stayed in the red for much of the session, finally closing with a small loss. As to influences on trading, the market continued to reap the benefits of the strength exhibited on multiple fronts last week, as the current five-day stretch will feature little in the way of new data until late in the week, when we will get reports on inflation and June retail sales. Neither issuance is likely to be market moving. As to the Federal Reserve, its Chair, Janet Yellen, will speak to Congress this week.
As to the coming days and weeks, in addition to the next Fed meeting, which is likely to see the bank hold interest rates unchanged, the market's focus will be on earnings, as second-quarter reporting season is just days away. Expectations are rather higher, and given the market's elevated valuations, some measure of satisfaction will be needed, in our opinion, to keep the buying momentum in place. Meanwhile, the market's hesitant rise continued into the close, with little further upward movement.
As the final bell sounded, we saw a modicum of selling, pare the gains slightly, as the Dow's one-time 30-point gain was whittled away completely, leaving that blue-chip composite off by just six points. The S&P 500 Index retained a nominal two-point advance, though the NASDAQ did end higher by a substantial 23 points. Moreover, gainers topped losers on the NYSE, but just slightly so, while there were a few more winning groups than losing sectors, with the basic materials category doing especially well, with fertilizer stocks leading the way.
Following this underwhelming session, we see that stocks in Asia were mostly higher overnight, while in Europe, the major bourses are now showing some early weakness, overall. In other markets, oil is down a few pennies a barrel; gold also is off a bit; but Treasury yields are climbing again. Finally, on this relatively quiet day for economic tidings, the U.S. futures are now trading slightly lower, presaging a nominally weaker opening when live trading resumes 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.
