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Can the Stock Market Stick the Landing?

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Monday, February 12, 2018

In the Dow Jones on Friday, we capped off a tumultuous trading week with a 300+ gain by the closing bell. Nearly 10% of S&P 500 companies saw +5% swings from their intra-day lows Friday, including Facebook and Amazon (AMZN - Free Report) — two companies that helped lead the major sell-off we’d seen so far in the month of February. Even still, it was the worst trading week in two years.

Ahead of today’s open, these same stock indexes are up. The Dow, in fact, is looking to ring in this new week with gains up another 300 points. The S&P and Nasdaq are also trending green at this hour, but by lower percentages. So does this mean the drastic market correction of the past week is now a thing of the past?

Zacks Exec VP Kevin Matras makes the argument that, although downward pressures may still exist, that we may well have seen the lows for this correction: check it here. And certainly we continue to see Q4 earnings reports that point to strong economies both domestically and around the globe; Zacks Director of Research Sheraz Mian’s latest Earnings Preview documents this fact here: Market Ignores Impressive Earnings Performance

To this point, in today’s pre-market we see another strong Q4 report from business conglomerate Loews Corp. (L - Free Report) , which posted 83 cents per share, better than the 72 cents expected (although still down 3.5% year over year). Not bad, but nothing like the 2200% earnings beat the Zacks Rank #2 (Buy) company posted in Q3. For more on L’s earnings, click here.

One of Loews’ top components is Zacks Rank #1 (Strong Buy)-rated insurance company CNA Financial (CNA - Free Report) , which posted Q4 earnings of $1.05 per share as opposed to the 85 cents we had expected. Core income rose nearly 30% year over year, likely demonstrating price firming following a devastating hurricane season in the U.S. in 2017. For more on CNA’s earnings, click here.

In other news today, the Trump administration rolls out its new budget, which is expected to include a major infrastructure plan. We anticipate much analysis regarding its potential costs and subsequent odds of passing an historically divided Congress. And we continue to watch in admiration as the Winter Olympics continue into the first full week. The question is: can the U.S. stock market stick the landing?

Mark Vickery
Senior Editor

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