Markets ended yesterday's choppy session mostly higher negating the adverse effects the increasing rate-hike possibility in December. Solid fiscal fourth quarter earnings results from D.R. Horton boosted homebuilder stocks. However, decline in Apple's share curbed some of the gains. Also, dismal inflation data out of China raised global growth worries. Though the Dow and S&P 500 ended in the green, decline in tech shares dragged the Nasdaq down to negative territory.
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The Dow Jones Industrial Average (DJI) gained nearly 0.2% to close at 17,758.21. The Standard & Poor's 500 (S&P 500) also gained nearly 0.2% to close at 2,081.72. However, the tech-laden Nasdaq Composite Index closed at 5,083.24, down 0.2%. The fear-gauge CBOE Volatility Index (VIX) declined 7.5% to settle at 15.29. A total of around 6.7 billion shares were traded on Tuesday, lower than the last 20-sessions average of 7.1 billion. Advancers outpaced declining stocks on the NYSE. For 55% stocks that advanced, 42% declined.
DR Horton Inc.'s ( DHI ) impressive fiscal fourth quarter results were one of the positives during Tuesday's trading. Shares of DR Horton surged 8.3% after reporting adjusted earnings per share of 60 cents in the quarter, increasing 33.3% year on year. Also, quarterly revenues of $3.09 billion climbed 27.7% year over year and beat the Zacks Consensus Estimate of $3.05 billion driven by higher number of homes closed and a solid increase in order value.
It was the biggest gainer among the S&P 500 companies. Encouraging earnings results from DR Horton had a positive impact on homebuilding stocks. Key stocks from the sector including PulteGroup, Inc. ( PHM ), Lennar Corporation ( LEN ) and KB Home ( KBH ) gained 3.6%, 3.4% and 4.5%, respectively.
Meanwhile, the Real Estate Select Sector SPDR (XLRE), which gained 1.1%, was the best gainer among the S&P 500 sectors. Key stocks from the sector including Simon Property Group Inc. ( SPG ), Equity Residential ( EQR ), Equinix, Inc. ( EQIX ) and Realty Income Corporation ( O ) gained 1.5%, 1.8%, 1.8% and 1.2%, respectively.
However, a drop of 3.2% in shares of Apple Inc. ( AAPL ) weighed on investor sentiment. Credit Suisse Group AG ( CS ) reduced its outlook for Apple's earnings per share in 2016. Also, Credit Suisse said the company has cut "its component orders by as much as 10%... The cuts seem to be driven by weak demand for the new iPhone 6s."
Apple had a negative impact on technology shares. Major tech stocks including Microsoft Corporation ( MSFT ), SanDisk Corp. ( SNDK ), EMC Corporation ( EMC ) and Avago Technologies Limited ( AVGO ) lost 1.2%, 1.6%, 2.3% and 5.3%, respectively.
After a weak trade data released on Monday, dismal inflation data out of China indicated sluggish growth condition in the world's second largest economy. Official data showed that consumer prices increased 1.3% last month, lower than 1.6% rise in September. It was also reported that producer prices plunged 5.9% in October, reaching its lowest level since Oct 2009. It was the 44 th consecutive month in which producer prices finished in the red.
Weak Chinese inflation data dragged down copper prices to its lowest level since Jul 2009, which in turn had a negative impact on materials sector. The Materials Select Sector SPDR (XLB), which declined 0.7%, was the biggest loser among the S&P 500 sectors. Key stocks from the sector including Freeport-McMoRan Inc. ( FCX ), Alcoa Inc. ( AA ), The Mosaic Company ( MOS ) and FMC Corp. ( FMC ) declined 6.3%, 3%, 2.7% and 1.1%, respectively.
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D R HORTON INC (DHI): Free Stock Analysis Report
PULTE GROUP ONC (PHM): Free Stock Analysis Report
LENNAR CORP -A (LEN): Free Stock Analysis Report
KB HOME (KBH): Free Stock Analysis Report
SIMON PROPERTY (SPG): Free Stock Analysis Report
EQUITY RESIDENT (EQR): Free Stock Analysis Report
EQUINIX INC (EQIX): Free Stock Analysis Report
REALTY INCOME (O): Free Stock Analysis Report
APPLE INC (AAPL): Free Stock Analysis Report
CREDIT SUISSE (CS): Free Stock Analysis Report
MICROSOFT CORP (MSFT): Free Stock Analysis Report
SANDISK CORP (SNDK): Free Stock Analysis Report
EMC CORP -MASS (EMC): Free Stock Analysis Report
AVAGO TECHNOLOG (AVGO): Free Stock Analysis Report
FREEPT MC COP-B (FCX): Free Stock Analysis Report
ALCOA INC (AA): 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.
