Week in Review: Dow Posts Gains for Third Straight Week Amid Record Streak

The Dow Jones Industrial Average closed out Friday with gains for the third week in a row as a record-breaking streak propelled the index higher.

The Dow Jones Industrial Average closed out Friday with weekly gains for the third time in a row as a record-breaking streak propelled the index higher. 

The Dow has risen 0.96% over the past four days in a holiday-shortened week. The S&P 500 increased 0.69% and the Nasdaq jumped 0.12%. 

The Dow climbed every day this week, securing its longest record-breaking streak in three decades. The blue-chip index has closed higher after 11 consecutive sessions thanks to optimism over a forthcoming tax plan from the White House. 

However, with few developments on that front, the record rally has taken on a life of its own, benefiting from individual stock moves, such as a better-than-expected quarter from Walmart (WMT) and reports DuPont (DD) could clear regulatory hurdles in its merger with Dow Chemical (DOW) .

"Sentiment in the market has generally been very upbeat except for the first few hours after the election results," Bodhi Ganguli, lead economist at Dun & Bradstreet, told TheStreet. "There is a lot of expectation of business-friendly policies from the new administration... We have to wait for details to see exactly how they're implemented, but the economic policies that have been proposed are very conducive to higher fundamental growth of the economy."

Overall economic improvements have moved the Federal Reserve to shift its rhetoric toward hawkishness. In minutes from the Jan. 31-Feb. 1 meeting released this week, members of the Federal Open Market Committee said it would be appropriate "fairly soon" to make a move higher. Members said that holds true so long as the incoming labor market and inflation data was in line with or stronger than expected.

Even as the Fed says the March meeting is live, the market continues to only expect a small chance of a near-term hike. This could cause some turbulence in coming weeks, warned Bill Merz, markets strategist at the Private Client Reserve at U.S. Bank. 

"A surprise near term hike could trigger volatility," said Merz. "Our base case is for two Fed hikes in 2017 with a chance of a third. Other risks include delays in passing material legislation in the U.S., and a surprise Le Pen victory in the French Presidential election, though odds of the latter remain relatively low for the time 

Retailers were in the spotlight this week with a number of chains reporting on their performance over the critical holiday shopping season. Walmart (WMT) , the world's largest retailer, topped fourth-quarter earnings estimates, raised its dividend and guided for an in-line first quarter. Same-store sales in the U.S. climbed 1.8%, beating consensus of 1.3% growth.

Walmart wasn't the only retailer to top estimates. Home Depot (HD) reported a solid quarter which benefited from a healthy housing market. The DIY home-improvement retailer reported 5.8% sales growth at locations open at least a year, higher than estimates of 3.5%.

J.C. Penney (JCP) fell short of profit and sales estimates over its fourth quarter. The department store chain also announced plans to shutter as many as 140 stores over the next few months. Nordstrom (JWN) topped quarterly profit and reported sales growth over its recent quarter, enjoying the bulk of gains at its discount stores

Macy's (M) beat analysts' quarterly estimates on its bottom line, while fourth-quarter same-store sales fell 2.1%. Kohl's (KSS) exceeded quarterly estimates and met full-year profit expectations. The retailer said it saw "declines in brick-and-mortar traffic" over the quarter, though online demand countered some of that drag.

TJX Cos. (TJX) , which owns TJ Maxx, narrowly beat profit and sales estimates over its fourth quarter. Same-store sales rose by 3%, topping expectations of 2.5% growth. The retailer also said it plans to repurchase at least $1.3 billion worth of shares over this fiscal year.

Better-than-expected earnings from retailers came as a relief to investors who were wary heading into the industry's portion of the earnings season. Slower traffic at malls and cautious consumer spending are expected to have contributed to retail weakness. Retail earnings are expected to increase by 5.2% over the fourth quarter, according to Thomson Reuters estimates.

By Keris Alison Lehiff

Source: https://www.thestreet.com/story/14015842/1/week-in-review-dow-posts-gains-for-third-straight-week-amid-record-streak.html

Stocks are zooming: S&P 500 joins Dow, Nasdaq, small and mid-cap stocks at all-time highs

Welcome to the party, S&P 500.

The benchmark index on Monday hit a new record high for the first time since Aug. 15, breaking above 2,193.81. Leading the S&P higher were energy stocks, which surged around 2 percent on the back of soaring oil prices.

The S&P 500 reached its record on the same day the Dow Jones industrial average, the tech-heavy Nasdaq composite, the Russell 2000and the S&P Mid Cap 400 all hit record highs. The Dow, Russell, Nasdaq and Mid Cap 400 had also hit record highs last week.

The S&P 500 was also within striking distance of 2,200. In October, a CNBC survey of 15 market strategists showed the average 2016 year-end S&P 500 target was 2,198.

Stocks have seen a sharp spike since the U.S. presidential election, as Donald Trump's surprise victory over heavy favorite Hillary Clinton brought enthusiasm for fiscal stimulus and deregulation of certain sectors, including banks and energy.

Michael Nagle | Bloomberg | Getty Images

Pedestrians walk past the New York Stock Exchange.

"It seems like everything has changed since the election," said Sean O'Hara, director at Pacer Financial. "There is an optimism in the market that hadn't existed."

"We'll have to see if the Trump administration delivers; personally, I think it will," he said.

Robert Pavlik, chief market strategist at Boston Private Wealth, said "I think [this rally] has legs, and it will continue, but there will be some bumps in the road," especially if the U.S. dollar keeps rising.

The dollar index, which tracks the U.S. currency's performance against a six other currencies, eased by 0.14 percent to 101.07 as of 1:09 p.m. ET. Last week, the index hit its highest level since April 2003.

Still, Pavlik said stocks have not given up their gains since the election and, even in days when they have slipped, markets haven't seen any significant continuation of downside trading.

By Fred Imbert

Source: http://www.cnbc.com/2016/11/21/s-and-p-500-hits-first-all-time-high-since-august-joins-dow-nasdaq-small-and-mid-caps.html

The 2 stocks expected to take the Dow above 18,000

A substantial rebound in the market has taken the Dow Jones industrial average up to its highs of the year, and nearly all the way back to a level that hasn't been seen since June: 18,000.

And at this point, all the index needs in order to cross that elusive level is for two stocks to rise to analysts' average price targets.

The Dow is a price-weighted index, meaning it replicates a strategy in which an investor owns just one share of each stock in the group. For this reason, the higher the share price of a given stock, the more importance it has in the index. That's why right now, the Dow's most important stocks are 3M, Goldman Sachs and IBM.

Analysts are none too bullish on 3M or IBM. 3M shares are expected to stay flat, based on analysts' price targets as compiled by FactSet, while IBM is actually overvalued by 11 percent, going by the median analyst price target.

However, Goldman Sachs is seen as a serious candidate for outperformance. 57 percent of the analysts who cover the stock rate it as a "buy," and the median price target on the now-$157 name is $187. If Goldman makes the expected 19 percent rally, then it alone will add more than 200 points to the Dow.

That would take the index up near 17,935. It would still need a bit of help, then, to get to the 18-handle.

And that's where Apple could come in.

The tech giant's share price is above the average for the index, giving it somewhat outsized importance in determining the Dow level. And analysts are markedly bullish on Apple, giving the stock a median price target of $130, according to FactSet.

If the 19 percent rally implied by that target arises, Apple will add another 140 or so points to the Dow level. Hello, Dow 18,075.

While Apple and Goldman Sachs are the stocks that could generate the most gains for the index if analysts' guesses turn out to prescient, sell-side stock prognosticators are actually rather bullish on the whole. If each of the 30 Dow stocks was trading at its median price target instead of its current price, the Dow would be trading above 18,600.

That handily beats the real-life Dow record price of 18,351 seen back in May.

Alex Rosenberg

Source:http://www.cnbc.com/2016/03/31/the-2-stocks-expected-to-take-the-dow-above-18000.html

Wall Street Breakfast: Markets Prepare For Q2 GDP Report

  134 comments  |  Includes: BA, FB, FCAU, GOOG, GOOGL, HLF, MA, MO, QQQ, RDS.A, RD

Economy
U.S. economic growth likely rebounded in the second quarter as healthy consumer spending and residential investment offset the drag from trade and the energy sector. Experts estimate that after a contraction in the first three months of the year, the economy grew at an annual rate of 2.9% last quarter. The Commerce Department will publish the initial GDP figure at 8:30 a.m. ET.

The decision to keep rates near zero for at least a few more weeks was unanimous in the FOMC's statement yesterday. Policymakers continued to see an improving economy and labor situation, but questions remain as to when the first rate hike will occur. Will it finally happen at a September meeting, later this year or in 2016?

Just moments after Saudi Arabia announced plans to cut oil production, U.S. House Speaker John Boehner expressed his support for repealing the 40-year-old ban on domestic crude exports. "Until recently our nation's energy policy was rooted in a scarcity mindset that went back to the 1970s," Boehner told reporters. "But now America is experiencing an energy boom and our policy needs to follow suit." The House will start working on wider energy legislation when it returns after the August recess.

Meanwhile, the Export-Import Bank will stay shuttered for the rest of the summer after the House passed a highway funding bill that excluded a measure to save the lender. As a result, several corporations - the latest Boeing (NYSE:BA) - are considering moving work overseas given the federal credit agency's uncertain future. Ex-Im provided $27.4B in financing for U.S. exports in fiscal year 2014.

Stocks
Baidu has announced a new share repurchase program, after its stock price got hammered by investors following weak earnings results on Monday. The buyback will take place over the next 12 months and will be funded from the company's existing cash balance. On the decline: BIDU shares have now lost almost a third of their value since their all-time high last November, and aredown 19.1% over the past week.

Samsung Electronics is warning of "mounting challenges" ahead as the company's once-highflying mobile unit again dragged on its quarterly results. With poor Galaxy S6 sales and a dramatic loss of Chinese market share, operating profit at Samsung's (OTC:SSNLF) mobile division slid 38% to 2.76T won ($2.4B). Overall operating profit dropped 4% to 6.9T won ($5.93B). The company is now looking to "flexibly adjust" the price of the S6, introduce a new premium model with a larger screen and develop a fresh range of mid-to-low end devices.

Google's Project Loon has signed its first national agreement with the government of Sri Lanka, making the island nation a frontrunner in the race to provide countrywide Wi-Fi access from giant helium-filled balloons. Details of Google's (GOOG, GOOGL) memorandum of understanding didn't provide a timetable to when the project would begin, but sources say a launch is "highly unlikely" to happen in 2015.

Looking to gain a better foothold in the mobile messaging market, Yahoo (NASDAQ:YHOO) is launching Livetext, an app that makes video calling almost as private as texting. Users will be able to hold video chats in which text messages/emojis appear on the screen, but no audio is present. The app will be released today for Apple and Android devices.

Shell is bracing for a "prolonged downturn," the company declared, as it reported a sharp fall in Q2 profit and said it would cut 6,500 jobs and full-year capex to $30B. Quarterly profit on a current cost-of-supplies basis dropped to $3.4B from $5.1B a year earlier, meeting analyst expectations. Despite a slump in crude prices, Shell (RDS.A, RDS.B) is still acting boldly . In April it signed a $70B deal to acquire BG Group, and is pressing ahead with expensive plans to drill in the Arctic.

What appears to be a wing component of a Boeing (BA) 777 washed up off the coast of Madagascar on Wednesday, and officials believe it could be debris from Malaysia Airlines Flight 370 that went missing in March 2014. Following that tragedy, and the shooting down of flight MH17 over Ukraine, Malaysia's sovereign wealth fund Khazanah Nasional took the airline private to repair its image and begin a $1.9B company-wide restructuring.

Embattled nutritional products seller Herbalife continues to swat pesky lawsuits away. Yesterday, U.S. District Court Judge Dale Fischer dismissed a suit brought by the Oklahoma Firefighters Pension and Retirement System that accused the company of misrepresenting its sales practices as legitimate. The judge also said that CEO Michael Johnson's selling of 12% of his Herbalife (NYSE:HLF) stake, while "undeniably large," did not raise suspicions.

Tesla Motors is now offering a referral program as an experiment through October 31, under which owners can earn a $1,000 discount by referring a new customer to the automaker. The initiative follows an update by the company on models, battery options, and price adjustments as it prepares to launch its second higher-volume product, the Model X SUV. TSLA -0.4%premarket.

Uber has launched its own auto leasing subsidiary, bringing the fast-growing ride services company into contact with another controversial business. In late 2013, Uber (Pending:UBER) introduced its first leasing program, but partnered with automakers and other financial institutions to lease cars to its drivers. The next iteration of the program, Xchange Leasing, involves cutting out intermediaries and directly leasing to UberX drivers.

Fiat Chrysler Automobiles is in hot water again. The automaker has now been sued by a Canadian law firm for more than $4B in damages, in connection with a massive recall it announced earlier in July. On Sunday, Fiat Chrysler (NYSE:FCAU) got slapped with a record $105M fine for safety recall lapses, and the carmaker is warning that it faces a U.S. product drought through 2016.

After recently passing hedge funds in terms of total assets, ETFs are pressing on with the record setting. In the past 12 months investors traded $18.2T worth of ETF shares, a 17% increase from the 12 months prior and more than triple what it was 10 years ago. For perspective: The amount of dollars exchanging hands through ETFs is now more than the U.S. GDP, which stands at $17.4T.

Wednesday's key earnings 
Altria (NYSE:MO) -1.5% despite an increase in market share. (link)
Facebook (NASDAQ:FB) -2.6% AH after costs soared. (link)
MasterCard (NYSE:MA) +1.7% on in-line results. (link)
SolarCity (NASDAQ:SCTY) -1.8% AH after missing profit estimates. (link)
Whole Foods (NASDAQ:WFM) -11.3% AH on disappointing earnings. (link)

Today's Markets:
In Asia, Japan +1.1% to 20523. Hong Kong -0.5% to 24498. China -2.2% to 3706. India +0.5% to 27705.
In Europe, at midday, London +0.7%. Paris +0.8%. Frankfurt +0.7%.
Futures at 6:20: Dow +0.1%. S&P flat. Nasdaq +0.2%. Crude +0.7% to $49.14. Gold -0.7% to $1085.30.
Ten-year Treasury Yield +3 bps to 2.3%

Today's economic calendar:
8:30 Initial Jobless Claims
8:30 GDP Q2
9:45 Bloomberg Consumer Comfort Index
10:30 EIA Natural Gas Inventory
1:00 PM Results of $29B, 7-Year Note Auction
3:00 PM Farm Prices
4:30 PM Money Supply
4:30 PM Fed Balance Sheet

Notable earnings before today's open: AAWW, AB, ACI, ACIW, ACOR,ACRE, ADP, ALKS, ALLE, ALU, ALXN, AMRC, APD, AVP, AWI, AZN, BC, BCO,BG, BLL, BUD, BWA, BWEN, CAH, CBB, CBM, CBR, CCE, CCJ, CEVA, CI, CL,CME, COP, COT, CPN, CRL, CRR, CRS, CSH, CVE, CVI, CVRR, DBD, DCIX, DFT,DLPH, EDR, EME, ENTG, EPD, ERJ, ESI, EXLS, FCAU, FCN, FIG, FMS, GG, GHM,GLOP, GLPI, GNC, GOV, GTLS, GVA, HEES, HOT, HP, HST, I, IART, IDA, IDCC,IDXX, INGR, IRDM, IRM, IT, ITC, IVZ, KMT, LBY, LINE, LKQ, LLL, MD, MDLZ,MDP, MDXG, MMYT, MOBL, MPC, MPLX, MSCI, MTRN, MWW, NAVB, NICE,NMM, NNN, NOK, NTCT, ODFL, OSK, OXY, PBI, PCRX, PES, PF, PG, PNK, PNW,POT, PRFT, PWE, RDS.A, RFP, RTIX, RYAM, RYL, SC, SCG, SEE, SHOO, SHOP,SMP, SNE, SNMX, SSYS, SUI, SWK, TASR, TDY, TE, TEX, TFX, TKR, TMUS,TWC, TWI, UAN, UFS, UPL, VA, VG, VICL, VLO, VLY, WST, WWE, XEL, XRAY,XYL, YNDX, ZBH

Notable earnings after today's close: AIV, AMCC, AMGN, ATEN, AUY, AVD,AXTI, BAS, BCOR, BCOV, BRCM, BVN, CALD, CATM, CLW, CMLS, COHR, COLM,CPSI, CPT, CRAY, CTRL, CXP, DCT, DECK, DGI, DLR, DTLK, EA, EEP, EGO, EIX,ELLI, ES, ESS, EVHC, EXPE, FE, FEIC, FEYE, FLR, FLS, FR, FRGI, GB, GMED,HBI, HK, HME, HTCH, IM, IMMR, INT, ISBC, KAMN, KLAC, LEG, LNKD, LRE,LSCC, MOH, MTD, MTSN, MWA, MXWL, NGVC, NR, NSR, OLN, OMCL, OUTR,PCCC, PDFS, PKI, PODD, PTCT, PXLW, QLGC, QTM, RGC, RMD, RNG, ROVI,SAM, SB, SGEN, SKYW, SPF, SPN, SYA, SYNA, SZYM, TCO, TEP, TMST, TNAV,TNDM, TPX, TSYS, TXTR, UHS, VCRA, VVUS, WAGE, WBMD, WU, WWWW,YRCW, ZLTQ

Source: http://seekingalpha.com/article/3373755-wall-street-breakfast-markets-prepare-for-q2-gdp-report