Stock Market News for December 18, 2015

Benchmarks snapped a three-day winning streak to end in the red on Thursday, led by declines in energy and materials shares. Decline in oil prices had a negative impact on both energy and materials shares. U.S. crude oil price registered its lowest settlement price in nearly seven years due to concerns about abundant supply of oil.

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The Dow Jones Industrial Average (DJI) dropped 253.25 points or 1.4% to close at 17,495.84. The Standard & Poor's 500 (S&P 500) declined 1.5% to close at 2,041.89. The tech-laden Nasdaq Composite Index closed at 5,002.55, decreasing 1.4%. The fear-gauge CBOE Volatility Index (VIX) soared 6.1% to settle at 18.94. A total of around 8 billion shares were traded on Thursday, higher than the last 20-session average of 7.2 billion. Decliners outpaced advancing stocks on the NYSE. For 64% stocks that declined, 34% advanced.

Oil prices settled lower on Thursday, eventually dragging energy and materials shares down. Oil prices ended lower due to an unexpected rise in U.S. crude inventories. According to the Energy Information Administration (EIA), crude supplies for the week ending Dec 11, increased by 4.8 million barrels. On the other hand, pricing agency Platts had forecasted a decrease by 2.5 million barrels.

Meanwhile, the dollar strengthened against most of the major currencies following the Federal Reserve's decision to hike benchmark interest rates in nearly a decade. A stronger dollar also intensified the downward pressure on oil prices. Dollar-denominated commodity prices, including crude oil, turned out to be less affordable to users of other currencies. The ICE dollar index had gained 1.4% to 99.1930 on Thursday.

The WTI crude oil price fell 1.6% to end at $34.95 a barrel, its lowest settlement price since Feb 2009. Additionally, Brent crude oil declined a meagre0.03% to end at $37.18 a barrel.

Separately, natural gas prices suffered its seventh straight session loss after a report showed that U.S. heating fuel supplies declined less-than-expected last week. Natural gas supplies fell 34 billion cubic feet for the week ended Dec 11, according to the EIA. Platts had forecasted a decline between 38 billion to 42 billion cubic feet.

The Energy Select Sector SPDR (XLE) declined 2.5%, the highest among the S&P 500 sectors. Dow components Exxon Mobil Corporation ( XOM ) and Chevron Corporation ( CVX ) dropped 1.5% and 3.1%, respectively. Other key stocks from the energy sector such as Occidental Petroleum Corporation ( OXY ), ConocoPhillips ( COP ) and Schlumberger Limited ( SLB ) decreased 3.6%, 4.2% and 2.8%, respectively.

The Materials Select Sector SPDR ETF (XLB) declined 2% and was the second biggest loser among the S&P 500 sectors. Key stocks from the sector including Freeport-McMoRan Inc. ( FCX ), E. I. du Pont de Nemours and Company ( DD ), Monsanto Company ( MON ), The Dow Chemical Company ( DOW ) and Praxair Inc. ( PX ) decreased 8.5%, 1.5%, 1.4%, 0.9% and 2.9%, respectively.

Overall, 11 out of 12 sectors of the S&P 500 ended in the red, the only exception being the utility sector. Defensive stocks including utility stocks continued to gain on Thursday, banking on the Fed's signal that the rate hike was a tentative beginning to a "gradual" tightening cycle. The Utilities Select Sector SPDR (XLU) advanced 0.2% on Thursday.

In economic news, the U.S Department of Labor reported that seasonally adjusted initial claims decreased 11,000 to 271,000 in the week ending Dec 12. The fall was more than the consensus estimate of initial claims decreasing to 272,500. Separately, the Leading Indicators Index increased 0.4% in December, higher than expectations of a 0.1% increase. This follows an increase of 0.6% in October.

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OCCIDENTAL PET (OXY): Free Stock Analysis Report

CONOCOPHILLIPS (COP): Free Stock Analysis Report

SCHLUMBERGER LT (SLB): Free Stock Analysis Report

FREEPT MC COP-B (FCX): Free Stock Analysis Report

DU PONT (EI) DE (DD): Free Stock Analysis Report

MONSANTO CO-NEW (MON): Free Stock Analysis Report

DOW CHEMICAL (DOW): Free Stock Analysis Report

PRAXAIR INC (PX): Free Stock Analysis Report

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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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