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Stock Market News for December 15, 2015

Benchmarks ended Monday's choppy trading session in the green following a rebound in U.S. crude oil price. U.S. oil price snapped a six-day losing streak on Monday, which eventually lifted beaten down energy shares. Moreover, investors chose to play safe by investing in consumer staples stocks. Meanwhile, junk bonds resumed their sharp selloff on Monday, while investors kept an eye on the Fed's rate hike decision.

For a look at the issues currently facing the markets, make sure to read today's Ahead of Wall Street article

The Dow Jones Industrial Average (DJI) gained 0.6% to close at 17,368.50. The Standard & Poor's 500 (S&P 500) advanced 0.5% to close at 2,021.94. The tech-laden Nasdaq Composite Index closed at 4,952.23, increasing 0.4%. The fear-gauge CBOE Volatility Index (VIX) plunged 6.8% to settle at 22.73. A total of around 8.9 billion shares were traded on Monday, higher than the last 20-session average of 7.03 billion. Decliners outpaced advancing stocks on the NYSE. For 72% stocks that declined, 26% advanced.

Rebound in U.S. crude oil price helped benchmarks end in the green on Monday. U.S. crude oil price erased early losses on Monday to end in positive territory as traders who had bet on lower prices booked profits. According to the Commodities Futures Trading Commission, many hedge fund managers have predicted that U.S. crude oil prices will decline in the coming weeks. WTI crude oil prices temporarily dropped below $35 a barrel, but bounced back 1.9% to close at $36.31 a barrel. However, Brent crude oil price declined a meager 0.03% to settle at $37.92 a barrel.

The Energy Select Sector SPDR (XLE) gained 0.5%. Dow components Exxon Mobil Corporation ( XOM ) and Chevron Corporation ( CVX ) advanced 2.3% and 3.3%, respectively. Other key stocks from the energy sector such as Occidental Petroleum Corporation ( OXY ), ConocoPhillips ( COP ) and Schlumberger Limited ( SLB ) increased 0.9%, 2.9% and 0.3%, respectively.

Gains in defensive sectors including consumer staples also boosted the broader markets. The Consumer Staples Select Sector SPDR ETF (XLP) advanced almost 1% and was the biggest gainer among the S&P 500 sectors. Key consumer staples stocks including The Procter & Gamble Company ( PG ), The Coca-Cola Company ( KO ), Philip Morris International, Inc. ( PM ), Pepsico, Inc. ( PEP ) and CVS Health Corporation ( CVS ) increased 0.7%, 0.4%, 0.9%, 0.2% and 0.9%, respectively.

Separately, the Technology Select Sector SPDR (XLK) advanced 0.8%, the second highest gainer among the S&P 500 sectors. Key holdings from the sector including Microsoft Corporation ( MSFT ), AT&T Inc. ( T ), Alphabet Inc. ( GOOGL ) and International Business Machines Corporation ( IBM ) increased 2%, 1.3%, 1.6% and 1%, respectively. Overall, 9 out of 12 sectors of the S&P 500 ended in the green.

Meanwhile, investors remained concerned about high-yield bond market. Junk bonds continued to witness selloff on Monday. A closure of a high-profile junk bond mutual fund last Friday resulted in the selloff. The Third Avenue Management LLC liquidated the $789 million Third Avenue Focused Credit Fund. As a result, investors were prevented from withdrawing money that they have invested in the fund.

Investors also remained focused on the Federal Reserve's meeting to be held on Dec 15-16. The Fed is widely expected to hike benchmark interest rates for the first time in almost a decade during its two-day policy meeting.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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