Benchmarks ended on a mixed note yesterday after clinching new
records over the past two trading days. Dismal housing sales data
arrested whatever buoyancy was achieved from the Iran nuclear
deal. At one point during the trading day, the Nasdaq had moved
beyond 4K for the first time since 2000, but finally lost out on
much of the day's gains. While the S&P 500 was the lone index
to end in the red, the meager gains in the blue-chip index was
enough to extend its all-time record run. The healthcare sector
was the biggest gainer among the S&P 500 industry groups
while energy sector lost the most.
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Ahead of Wall Street
The Dow Jones Industrial Average (DJI) increased 0.1% to close
the day at 16,072.54. The S&P 500 dropped 0.1% to finish
yesterday's trading session at 1,802.48. The tech-laden Nasdaq
Composite Index climbed 0.1% to end at 3,994.57. The fear-gauge
CBOE Volatility Index (VIX) edged up 4.32% to settle at 12.79.
Consolidated volume on the New York Stock Exchange was roughly
3.0 billion shares. Declining stocks outnumbered the advancers.
For 54% shares that declined, 43% advanced.
A holiday-shortened week is most likely to witness lower volumes
and this is exactly what happened yesterday. Also, the day was
short of domestic action apart from the pending home sales
report. However, major news came in over the weekend, namely the
landmark Iran nuclear agreement. The U.S. and other important
global powers, such as Russia, China, France, the UK and Germany
signed an agreement with Iran as per which the country will
curtail some of its nuclear activities. In exchange, Iran will
gain $7 billion over a period of six months due to the withdrawal
of sanctions. The deal promises to reduce conflict risks and
boost trade in the short term. It will also make it easier for
Iran to export crude oil. As a result, oil prices moved south.
Consequently, the agreement signed at Geneva had its effect on
the energy sector. Oil prices dropped about 0.8%, to settle at
$94.09 per barrel following these developments, affecting the
energy sector. Energy stocks were the biggest losers on the
S&P 500 and the Energy SPDR (XLE) lost 0.9%. Stocks such as
Chevron Corporation (NYSE:
), Schlumberger Limited. (NYSE:
), Occidental Petroleum Corporation (NYSE:
), ConocoPhillips (NYSE:
), and Pioneer Natural Resources (NYSE:
) lost 0.2%, 3.2%, 1.9%, 1.6%, and 3.0%, respectively.
The US President Barack Obama called the agreement "an important
first step toward a comprehensive solution". On the other hand,
White House spokesman Josh Earnest said: "The president
underscored that the United States will remain firm in our
commitment to Israel, which has good reason to be skeptical about
Coming to housing data, the National Association of Realtors
reported that the pending home sales index dropped 0.6% to 102.1
in October, below the consensus estimate of 2%. The index is at
its lowest level since December 2012. It was a decline in
contracts for the fifth month in a row.
Consequently, the SPDR S&P Homebuilders ETF (XHB) dropped
0.03%. Stocks such as PulteGroup, Inc. (NYSE:
), KB Home (NYSE:
), Lennar Corporation (NYSE:
), M.D.C. Holdings, Inc. (NYSE:
), and The Ryland Group, Inc. (NYSE:
) lost 0.4%, 2.0%, 0.7%, 1.5%, and 1.4%, respectively.
Separately, shares of Wal-Mart Stores, Inc. (NYSE:
) climbed 0.8% to $80.43 after the world's largest retailer said
it has chosen the new CEO. Company veteran Doug McMillon will
succeed Mike Duke as president and CEO, effective from February
The healthcare sector was the biggest gainer among the S&P
500 industry groups. The Health Care SPDR (XLV) gained 0.4%.
Stocks such as Johnson & Johnson (NYSE:
), Pfizer Inc. (NYSE:
), Merck & Co., Inc. (NYSE:
), Gilead Sciences, Inc. (NASDAQ:
), and Amgen, Inc. (NASDAQ:
) added 0.4%, 0.1%, 1.5%, 0.4%, and 0.8%, respectively.