Wall Street >>> Earnings Season Off to Positive Start

The markets ended with a mixed verdict on Wednesday as a stronger dollar halted the Dow's two-day surge but the broader S&P 500 inched higher before Alcoa kicks off earnings season after the bell.

The day ends with the Dow Jones Industrial Average (DJIA) more or less flat while the S&P 500 (SPX) and Nasdaq Composite (COMP) posted mild gains. At its afternoon lows, the Dow was down 55 points but some late-session buying erased that dip. There was an "opportunity" (for lack of a better term) for the bears to pile on in the afternoon but that didn't happen. The late-day bounce means the Dow is still holding the bulk of the more than 240 points gained so far this week.

The launch of earnings season means a few things. The most obvious is that we will be inundated with headlines and the subsequent reactions from the stocks. Keeping track of all this can, at times, be like trying to herd cats. That doesn't mean there won't be opportunities, but it is something to factor into the analysis. And that is where I will pick up in the morning. Have a nice day.

Today's Markets
The Dow Jones Industrial Average (DJIA – 9,725.58) made a valiant effort to pare its losses during the final hour of trading, but couldn't quite muscle into the black. By the close, the index settled on a deficit as 17 of its 30 components ended lower.

The Dow Jones Industrial Average fell 5.67 points, or 0.06%, to 9725.58, the S&P 500 rose 2.86 points, or 0.27%, to 1057.58 and the Nasdaq Composite climbed 6.76 points, or 0.32%, to 2110.33.

For the week:
The Dow is up 237.91, or 2.5 percent. The S&P is up 32.37, or 3.2 percent.
The Nasdaq is up 62.22, or 3.0 percent.
For the year:
The Dow is up 949.19, or 10.8 percent.
The S&P is up 154.33, or 17.1 percent. The Nasdaq is up 533.30, or 33.8 percent.

Wednesday's action represented a pause from a pair of weak dollar-inspired rallies that sent the Dow soaring 244 points during the first two days of the week, marking the best two-day stretch since mid-July. It's not surprising to see the bulls take a breather as the dollar bounced back from a three-day plunge.

At the same time, Wall Street continues to have high hopes for earnings season as better-than-expected profits the past two earnings seasons helped fuel the Dow’s 3,000-point surge off the March lows.

“If earning season starts to play out pretty well, I think you’re going to see [Dow] 10000 before you know it,” commented NYSE trader Doreen Mogavero.

“The bar has been raise for earnings season. We’re going to have to see higher quality earnings surprises driven by revenue in order to keep this market going into the fourth quarter,” said Mogavero.

The markets ended well off their worst levels of the day as the Dow had been down 55 points before closing just fractionally lower. Likewise, the S&P 500 erased earlier losses to close at session highs.

“Most of the pullbacks seem to be met with an attitude of buying opportunities,” said Craig Peckham, equity trading strategist at Jefferies & Co. Given the two days of gains, “I consider [today's flat close] net-net to be a win."

HAPPY TRADING!