U.S. stock markets finished mixed on Wednesday as financial stocks failed to hold on to their winning streak. In addition to retreat in financial stocks, decline in energy stocks weighed on the major benchmarks and led the Dow to end in the red for the first time in the last eight sessions. However, healthy gains in Apple boosted the tech sector, which eventually led the tech-heavy Nasdaq to finish in the green.
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 0.3%, to close at 18,868.14. The S&P 500 declined nearly 0.2% to close at 2,176.94. However, the tech-laden Nasdaq Composite Index closed at 5,294.58, gaining nearly 0.4%. Meanwhile, the fear-gauge CBOE Volatility Index (VIX) rose 2.6% to settle at 13.72. A total of around 7.3 billion shares were traded on Wednesday, lower than the last 20-session average of 7.9 billion shares. Advancers outpaced declining stocks on the NYSE. For 51% stocks that advanced, 46% declined.
What Dragged Benchmarks Down?
After rallying since Trump's win in the Presidential election, financial stocks took a reverse course yesterday to emerge as the biggest decliner among the S&P 500 sectors. Overvaluation concerns may be one of the factors behind yesterday's decline. The Financial Select Sector SPDR ETF (XLF) declined 1.4% on Wednesday. Key stocks from the sector including JPMorgan Chase & Co. ( JPM ), The Goldman Sachs Group, Inc. ( GS ) and Bank of America Corporation ( BAC ) dropped 2.5%, 2.3% and 2%, respectively.
Moreover, energy sector finished in negative territory after jump in the U.S. crude inventories offset rising speculations of an output cut. Alexander Novak, Russian Energy Minister hinted that major oil producers may enter into an agreement to reduce oil production at the Nov 30 meeting. However, oil prices ended in the red despite rising output cut chances after the U.S. Energy Information Administration reported that crude stockpiles increased 5.3 million barrels for the week ending Nov 11 to 490.3 million barrels. This was preceded by an increase of 2.4% million barrels earlier week.
The prices of WTI and Brent crude declined 0.5% and 0.7% to $45.57 a barrel and $46.63 per barrel, respectively. This also led the Energy Select Sector SPDR ETF (XLE) to decline 0.7%, which emerged as the second biggest decliner among the S&P 500 sectors. Key stocks from the sector including Exxon Mobil Corporation ( XOM ), Halliburton Company ( HAL ) and ConocoPhillips ( COP ) dropped 1.2%, 2% and 2%, respectively. All of these stocks hold a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Separately, the U.S. Bureau of Labor Statistics reported that the Producer Price Index (PPI) remained unchanged last month, compared to the consensus estimate of a 0.3% rise. Meanwhile, subtracting food and energy, PPI declined 0.2%, in contrast to the consensus estimate of a 0.2% increase. Moreover, the Federal Reserve reported that industrial production remained flat last month, compared to the consensus estimate of 0.1% rise. This was preceded by a 0.2% decline in September. The capacity utilization also fell slightly to 75.3 in October.
Strong Gains in Tech Stocks Boosted Nasdaq
Despite these concerns, the Nasdaq finished in the green on the back of strong gains in the tech sector, which was primarily led by a solid rise in Apple Inc.'s ( AAPL ) shares. Shares of Apple rose 2.7% on Wednesday following news that smart glasses may be the new addition to the tech giant's huge product line.
This led the Technology Select Sector SPDR ETF (XLK) to emerge as one of the best performers among S&P 500 sectors by gaining 0.9%. Other key stocks from the domain including Microsoft Corporation ( MSFT ), Alphabet Inc. ( GOOGL ) and Oracle Corporation ( ORCL ) rose 1.3%, 0.6% and 1.4%, respectively. Separate, shares of Target Corp. ( TGT ) jumped 6.4% after reporting better-than-expected third quarter earnings results and providing positive outlook. Target was the best per former among the S&P 500 companies. ( Read More )
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