After the Close
The major U.S. stock indexes began the day on an up note, and managed to hang onto most of those early gains. On the economic front, traders got some encouraging news from the Institute for Supply Management. Namely, manufacturing activity for July came in at a nicely expansionary reading of 56.3%. This was down a bit from June’s tally of 57.8%, but still well above the 12-month average of 54.7%.
Otherwise, the second-quarter earnings season continues to get most of the attention, and investors largely appear to be pleased with what they’re seeing. To wit, the 30-stock Dow Jones Industrial Average closed out the day with another all-time high (its fifth in the last five sessions), rising 72 points to within shouting distance of the 22,000 milestone. The broader S&P 500 also pushed ahead, moving up six points to a record close.
Meanwhile, the tech-laden NASDAQ joined the winners’ circle with a gain of 15 points.
From a sector perspective, telecommunications, financial, and utility issues led the way, with each group advancing about half a percentage point. Meanwhile, losses among the few laggard groups were modest. Looking ahead, traders will be parsing the latest earnings report from Apple (AAPL - Free Apple Stock Report) after the close. The June quarter has been the tech giant’s slowest in recent years, ahead of its traditional September-launch of the latest iPhone models. However, in the wake of the company’s cautious guidance a few months back, market participants will be looking beyond the earnings figures and focusing instead on management’s outlook.
Optimism also reigned on the European bourses today, likely enlivened by the region’s recent positive GDP report. Germany’s DAX led the charge, advancing 1.1% on the day. The U.K.’s FTSE and France’s CAC-40 were not far behind, with each showing gains of a little under three-quarters of a percentage point. – Mario Ferro
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
The stock market opened higher this morning, with leadership in the blue-chip names. At just past noon in New York, the Dow Jones Industrial Average is up 80 points, while the S&P 500 Index and the NASDAQ are showing more modest gains. Market breadth is positive, with advancers ahead of decliners on the NYSE. From a sector perspective, the technology and financial names are pressing ahead. However, the healthcare and basic materials issues are lagging the broader market.
A few economic news items were released this morning. Specifically, personal income was unchanged during the month of June, where analysts had anticipated a slight increase. However, personal spending advanced 0.1% for the month, which was more or less in line with expectations. Elsewhere, construction spending slipped 1.3% in June, while the consensus forecast called for a modest uptick. Finally, the ISM Manufacturing Index came in with a reading of 56.3 in July, meeting expectations.
Elsewhere, the second-quarter earnings season is still in progress. Over the past 24 hours, a number of widely followed companies weighed in with their numbers. Specifically, shares of Pfizer (PFE – Free Pfizer Stock Report) are trading lower today, after the pharmaceutical giant delivered a mixed report. Elsewhere, shares of BP Plc. (BP) are gaining some ground, after the oil and gas operator put out a better-than-anticipated report. After the closing bell, we will hear from Apple, Inc. (AAPL – Free Apple Stock Report). Given the size and importance of this technology leader, investors will likely be looking carefully at this issuance.
Technically, the equity markets continue to hold up reasonably well. Of note, the Dow Jones Industrial Average, which is at new high territory, has been doing particularly well. So far, corporations have been delivering respectable results, and that is likely keeping the sentiment bullish. – Adam Rosner
At the time of this article’s writing, the author did not have positions in any of the companies mentioned.
Before the Bell
Following a week that saw a surprise pop in consumer confidence to a multi-year high, some reassuring metrics on second-quarter gross domestic product, and generally strong earnings support, Wall Street entered a new five-day span yesterday morning, with additional earnings on the docket, a report on manufacturing activity due out later this morning, and, most important, a release scheduled for this Friday morning, from the government, on non-farm payrolls for July and that month's latest figures on unemployment.
Ahead of all this, the stock market, also fresh off a series of further all-time highs, started the day and week nicely to the upside. And, initially, it was a full-fledged advance of modest proportions, with the 30-stock Dow Jones Industrial Average pressing ahead to an early gain of near 90 points. That advance generated another all-time high in that composite, bringing it to the doorstep of 22,000 in the process. However, once again, the tech-laden NASDAQ faltered, entering the loss column in the mid-morning and then staying there.
As to earnings, the Dow was again led by shares of aerospace giant Boeing (BA - Free Boeing Stock Report). That stock jumped once more following stellar gains last week on the heels of a strong quarterly bottom-line showing and upbeat guidance going forward. Meanwhile, on the reporting calendar for this week is tech stalwart Apple Inc. (AAPL - Free Apple Stock Report). That issue has been a formidable performer recently, rising past $150 a share on generally high expectations. As noted, however, the economy will share center stage with earnings this week, as a plethora of key reports will be issued.
Regarding the market, after a mixed morning, which saw the Dow gain nicely, but the NASDAQ and the Russell 2000 pull back somewhat, stocks continued in this mixed vein as the afternoon got under way. Then, for a time, the market firmed up, with the Dow pushing a little higher into record-high territory, posting a brief gain just shy of 100 points. The NASDAQ's loss also eased, moving inside of 15 points briefly. But this partial comeback could not be sustained, and as the session wound down some further selling ensued.
All told, as we headed into the final minutes, the Dow's gain eased back to a closing finish of 61 points. The S&P 500 Index, in and out of the black all day long, but within a narrow range, concluded posting a small loss, while the NASDAQ ended off 27 points. Also, the small-cap dominated Russell 2000 shed four points. In sum, it was a mixed session, with the late easing perhaps a function of added dysfunction in the White House, as the Communications Director was let go after less than a fortnight in office.
Looking out to a new day, and one that will, as noted, feature the monthly read on manufacturing activity from the Institute for Supply Management, we see that stocks were higher in Asia overnight, while on the Continent, the European bourses are tracking upward, as well, at this hour. Meanwhile, oil, which has shown enviable stability recently, is trading largely unchanged this morning; Treasuries are weaker; and gold is steady. Finally, ahead of a busy week of economic releases, the U.S. equity futures are up strongly on earnings optimism. – Harvey S. Katz
At the time of this article’s writing, the author did not have positions in any of the companies mentioned.
