Benchmarks closed slightly in the red on Monday following a decline in oil prices and uncertainties regarding the outcome of presidential election. However, a better-than-expected consumer spending report indicated steady growth in the economy, which in turn had a positive impact on the markets. Moreover, investors digested General Electric-Baker Hughes merger news. Investors remained cautious on the last trading day of October ahead of monthly job report and Fed's policy meeting.
For the month, all the three key U.S. indexes finished in negative territory. The Dow and S&P 500 registered their third straight monthly declines and the Nasdaq ended in the red last month after gaining for three consecutive months. Also, the Dow posted its longest stretch of losses in six years, while the S&P 500 registered its worst monthly performance in last ten months.
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) decreased 0.1%, to close at 18,142.42. The S&P 500 fell 0.26 points to close at 2,126.15. The tech-laden Nasdaq Composite Index closed at 5,189.14, losing 0.96 points. The fear-gauge CBOE Volatility Index (VIX) increased 2.3% to settle at 16.56. A total of around 6.8 billion shares were traded on Monday, higher than the last 20-session average of 6.4 billion shares. Advancers marginally outpaced declining stocks on the NYSE. For 49% stocks that advanced, 47% declined.
What Weighed On the Benchmarks?
Oil prices fell yesterday following doubts over a possible crude production cuts by major oil producing nations. During a meeting in Vienna, non-OPEC countries like Russia, Brazil, Mexico and others did not commit to freeze or cut their crude output until the OPEC members agree to do the same.
WTI and Brent crude fell 3.9% and 2.9% to $46.86 per barrel and $48.30 a barrel, respectively, reaching their worst settlement since September 27. Decrease in oil prices led the Energy Select Sector SPDR (XLE) to fall 1.1%, which emerged as the biggest decliner among the S&P 500 sectors. Dow component, Exxon Mobil Corporation ( XOM ) fell 1.7% and possess a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Moreover, news of the FBI probing Hillary Clinton's new emails, relating to FBI's investigation "of former Secretary Clinton's personal email server," also continued to weigh on investor sentiment. Also, investor remained cautious amid Fed's two-day policy meeting and Friday's jobs report.
Consumer Spending Remains Upbeat
In economic news, personal consumption expenditure rose 0.5% in September in contrast to a decrease of 0.1% in August, according to the Commerce Department. Consumer spending rose at its fastest level in last three months.
Merger On Focus
General Electric's shares fell ( GE ) 0.4% on news that the company entered into a deal to merge its oil and gas business with oil services major Baker Hughes ( BHI ). Shares of Baker Hughes declined 6.3%. (Read More: Merger Madness Continues with GE, Baker Hughes Oil Deal )
Monthly Roundup
For the month, the Dow, S&P 500 and Nasdaq fell 0.9%, 1.9% and 2.3%, respectively. Weak Chinese trade data and disappointing September's jobs data weighed on the broader markets. Moreover, investors digested mixed bag of earnings results in October. Further, the Fed's Beige Book stated that the overall U.S. economy is expanding at a moderate pace, while a pick-up in inflation raised December rate hike chances.
Stocks That Made Headlines
CenturyLink Beats Q3 Earnings & Revenue Estimates
CenturyLink Inc. ( CTL ) reported strong financial results in the third quarter of 2016, wherein both the bottom and the top line beat the Zacks Consensus Estimate. ( Read More )
CenturyLink Inks Deal to Buy Level 3 Communications
CenturyLink Inc. ( CTL ) and Level 3 Communications Inc. ( LVLT ) entered into a definitive agreement through which the former will acquire the latter in a cash and stock transaction. ( Read More )
Level 3 Communications Q3 Earnings Lag Estimates
Level 3 Communications Inc. ( LVLT ) reported weak financial results in the third quarter of 2016 wherein both the top and the bottom line missed the Zacks Consensus Estimate. ( Read More )
Archer Daniels Bounces Back with Q3 Earnings Beat
Archer Daniels Midland Company ( ADM ) bounced back with an earnings beat in third-quarter, gaining from improved operating conditions in the quarter, which succeeded a challenging first-half 2016. ( Read More )
L Brands Trims Q3 Earnings Guidance, Stock Down
Shares of L Brands, Inc. ( LB ) declined roughly 6% during after the company provided soft comparable-store sales forecast for October and trimmed its third-quarter fiscal 2016 earnings projection. ( Read More )
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GENL ELECTRIC (GE): Free Stock Analysis Report
BAKER-HUGHES (BHI): Free Stock Analysis Report
EXXON MOBIL CRP (XOM): Free Stock Analysis Report
CENTURYLINK INC (CTL): Free Stock Analysis Report
LEVEL 3 COMM (LVLT): Free Stock Analysis Report
ARCHER DANIELS (ADM): Free Stock Analysis Report
L BRANDS INC (LB): 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.
