Stock Market News for February 01, 2017

U.S. stocks ended mostly lower on Tuesday amid signs that momentum following President Donald Trump's election victory in November was fading. His signing of an executive order to temporary restrict immigration saw weekend chaos and backlash, eventually affecting stocks. Industrial, technology and financials shares tanked outweighing gains among traditional safe sectors including health-care and utilities. Meantime, a gauge of consumer confidence retreated in January from its highest level in 15 years. Despite such setbacks, major indexes ended the month higher in what were their first January gains since 2013, while the Nasdaq ended in the green on Tuesday thanks to sharp gains in biotech stocks.

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) declined 0.5% or 107.04 points, to close at 19,864.09, with 22 of the 30 blue-chip companies closing lower. The S&P 500 fell 0.1% to close at 2,278.87, with six of the 11 main sectors finishing in negative territory. The tech-laden Nasdaq Composite Index closed at 5,614.79, gaining a meagre 0.02%. The fear-gauge CBOE Volatility Index (VIX) declined 1.7% to settle at 11.68. A total of around 4.08 billion shares were traded on the NYSE on Tuesday.

Political Concern Weighs

Market bulls argue that Trump's business-friendly policy focused on tax cuts, deregulation and infrastructure spending, remains a positive for the economy, but, investors were put to notice on Tuesday that the path higher might no longer be so smooth.

Investors' grappled over Trump's executive order to tighten immigration rules. The order would temporarily ban immigration into the U.S. from Iraqi, Syrian, Iranian, Sudanese, Libyan, Somali and Yemeni citizens, while it also seeks "extreme vetting" procedures for those it did allow to enter the U.S. Such an executive order spawned legal challenges, congressional criticism and widespread protests.

The market rally that catapulted the Dow over 20000 last week has stalled, with investors backing away from shares of industrial and financial companies and picking up havens like gold. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

The Nasdaq, however, finished in positive territory due to gains in biotech stocks. The iShares Nasdaq Biotechnology index (IBB) rallied 2.8% (read more: Drug Stocks Rally on Trump Meet with Pharma Bigwigs ).

Monthly Gains

The main indexes posted a third consecutive round of monthly gains in January. The Dow added 0.5% for the month, the S&P 500 was 1.8% higher and the Nasdaq Composite rose 4.3%. Projections for stronger economic growth and upbeat corporate earnings boosted US stocks for the first January rise in five years. Stocks rallied on hopes that the new administration's policies including lowering of taxes and cutting regulations will bolster economic growth.

The materials sector has fueled the rally, advancing 5.1% so far this year, following a 14% gain in 2016. Companies listed on the sector have benefited from Trump's infrastructure spending promises and a rise in the price of many raw materials. Technology shares that trailed behind the broader market last year have also recorded sharp gains this year. The sector has risen 3.6% in January, its best month since last July.

Earnings in the final quarter of 2016 came on the heels of growth in the third quarter that snapped a 15-month decline in earnings. We now have results from 171 S&P 500 members that have reported as of Jan 30th. Total earnings for these 171 index members are up 6% from the same period last year on 3.1% higher revenues, with 64.3% beating EPS estimates and 54.4% beating revenue estimates (read more: Is the Bar Higher for the Q4 Earnings Season? ).

Stocks That Made Headlines

Apple Q1 Earnings and Revenues Beat, Increase Y/Y

Shares of Apple Inc. ( AAPL ) were up over 3% in aftermarket trading following better-than-expected first quarter of fiscal 2017 results. ( Read More )

C.H. Robinson Beats on Earnings & Revenues in Q4

C.H. Robinson Worldwide Inc.'s ( CHRW ) fourth-quarter 2016 earnings per share of 86 cents beat the Zacks Consensus Estimate of 84 cents. However, earnings declined 2.2% year over year due to higher costs. ( Read More )

Fortune Brands Beats on Q4 Earnings, Stock Rises

Keeping its positive earnings surprise trend alive for the fifth straight quarter, Fortune Brands Home & Security Inc. ( FBHS ) posted better-than-expected earnings results for fourth-quarter 2016. ( Read More )

NuStar Energy Posts Q4 Loss, Revenues Beat Estimates

San Antonio-based publicly traded partnership, NuStar Energy L.P. ( NS ) reported fourth-quarter loss per limited partner unit of 31 cents. The Zacks Consensus Estimate was of earnings of 54 cents per limited partner unit. ( Read More )

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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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