Stock Market News for November 09, 2015

Benchmarks finished mixed on Friday as stronger-than-expected jobs report raised the possibility of a rate hike in December. While increased rate-hike possibilities boosted financial stocks, it had a negative impact on the utilities sector. While the Dow and Nasdaq finished in the green, the S&P 500 finished in the red. Meanwhile, major benchmarks recorded their longest winning stretch of weekly gains since last year.

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 nearly 0.3% to close at 17,910.33. The tech-laden Nasdaq Composite Index closed at 5,147.12, rising 0.4%. However, the Standard & Poor's 500 (S&P 500) lost 0.03% to close at 2,099.20. The fear-gauge CBOE Volatility Index (VIX) declined 4.8% to settle at 14.33. A total of around 6.09 billion shares were traded on Friday on NYSE. Decliners outpaced advancing stocks on the NYSE. For 60% stocks that declined, 38% advanced.

On Friday, the U.S. Department of Labor reported that the economy generated 271,000 nonfarm payroll jobs in October, witnessing its biggest monthly gain since Dec 2014. It also surpassed the consensus estimate of 182,000. The unemployment rate declined to a seven and a half year low of 5% last month from 5.1% in September. Moreover, the report showed that the average hourly earnings increased 9 cents in October to $25.20 after rising only 1 cent in the prior month. It also registered a 2.5% year-on-year gain, recording its biggest gain since the recession in 2008.

Some of the Fed officials welcomed October's strong jobs report. In an interview, Chicago Federal Reserve President Charles Evans said that the report is "very good news" and "strong wage growth would be a very helpful ... pushing inflation up to 2 percent, which is what we need." Though he stated that "we've indicated that conditions look like they could be ripe of an increase," he remained concerned "about downside risk with the weak foreign economy."

Charles Evans said he still prefers "for more delay or a shallower path" as he is uncertain whether "inflation is going to get up to our 2 percent objective within reasonable amount of time."

Moreover, St. Louis Fed President James Bullard said that October's "very good" U.S. jobs report and significant year-on-year improvement over the past one year indicate that the economy has reached full employment. Last week, the Federal Reserve Chairwoman Janet Yellen along with other Fed officials had signaled there is "a live possibility" of a rate hike next month.

This increased possibility of rate hike in December boosted financial stocks on Friday. The Financial Services Select Sector SPDR (XLFS) gained 1.9% and was the best performer among the S&P 500 sectors. Key stocks from the sector including Bank of America Corporation ( BAC ), Citigroup Inc. ( C ), Morgan Stanley ( MS ), The Goldman Sachs Group, Inc. ( GS ) and JPMorgan Chase & Co. ( JPM ) rose 3.7%, 3.2%, 4.5%, 3.7% and 3%, respectively.

However, rate-hike fear dragged down the Utilities Select Sector SPDR (XLU) by 3.5% on Friday. Key stocks from the sector including Consolidated Edison, Inc. ( ED ), Duke Energy Corporation ( DUK ), American Electric Power Co., Inc. ( AEP ), Southern Company ( SO ) and Dominion Resources, Inc. ( D ) declined 5.2%, 5.2%, 3.5%, 4.5% and 3.4%, respectively.

Another rate sensitive sector, the Real Estate Select Sector SPDR (XLRE) declined 3.7% and was biggest decliner among the S&P 500 sectors. Key stocks from the sector including Simon Property Group Inc. ( SPG ), General Growth Properties, Inc ( GGP ), Realty Income Corporation ( O ), Equity Residential ( EQR ) and Ventas, Inc. ( VTR ) dropped 4%, 4.7%, 5.1%, 2.9% and 6.2%, respectively.

Separately, shares of TripAdvisor Inc. ( TRIP ) dropped 6.9% after reporting adjusted third-quarter 2015 earnings of 45 cents per share which missed the Zacks Consensus Estimate of 47 cents. Quarterly revenues of $415.0 million also missed the Zacks Consensus Estimate of $430.0 million. It was the worst performer among the S&P 500 companies.

However, NVIDIA Corporation's ( NVDA ) shares surged 13.9% after announcing third quarter adjusted earnings per share of 40 cents, outpacing the Zacks Consensus Estimate of 25 cents. Revenues not only increased 6.5% year over year to $1.31 billion but also surpassed the Zacks Consensus Estimate of $1.18 billion. It was the second best gainer among the S&P 500 companies.

Also, shares of The Walt Disney Company ( DIS ) rose 2.4% after its fiscal fourth quarter earnings per share improved 34.8% year on year to $1.20. This was also higher than the Zacks Consensus Estimate of $1.17.

Meanwhile, ZS Pharma, Inc.'s ( ZSPH ) shares surged 40.6% after British company AstraZeneca PLC ( AZN ) announced that it will acquire the former for $2.7 billion or $90 a share. The $90 price was a 42% premium on Thursday's closing price.

Over the week, the Dow, S&P 500 and Nasdaq gained 1.4%, 1% and 1.9%, respectively. Benchmarks registered weekly gains for the sixth-consecutive week.

Merger and acquisition news including that between Dyax Corp. ( DYAX ) and Shire plc ( SHPG ), and Treehouse Foods, Inc. ( THS ) and ConAgra Foods, Inc.'s ( CAG ) boosted investor sentiment. Meanwhile, encouraging third quarter earnings report from companies including The Clorox Company ( CLX ), Michael Kors Holdings Limited ( KORS ), Facebook, Inc. ( FB ) and Ralph Lauren Corporation ( RL ) had a positive impact on benchmarks.

Also, strong auto sales data and better-than-expected reading of ISM Services Index helped benchmarks to finish the week in the green. Meanwhile, energy shares registered gains last week despite continuing decline in oil prices .

However, dismal economic data including ISM manufacturing index, factory order and initial claims dampened investor sentiment. Disappointing earnings results and weak outlook from companies including Time Warner Inc. ( TWX ), Sprint Corporation ( S ), Kellogg Company ( K ) and Archer-Daniels-Midland Company ( ADM ) had a negative impact on benchmarks.

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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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