U.S. stock markets ended in the red for the second consecutive sessions on Thursday as investors opted for profit booking. Meanwhile, decline in financial stocks weighed on benchmarks. Separately, positive impact of encouraging jobless claims data were offset by a decline in oil prices following rise in crude inventories, which in turn had a negative impact on energy sector. However, gains in utilities sector limited some of the yesterday’s losses.
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 nearly 0.1%, to close at 19,819.78. The S&P 500 decreased a meager 0.03% to close at 2,249.26. The tech-laden Nasdaq Composite Index closed at 5,432.09, losing 0.1%. The fear-gauge CBOE Volatility Index (VIX) increased 1.7% to settle at 13.37. A total of around 2.33 billion shares were traded on NYSE on Thursday. Advancers outpaced declining stocks on the NYSE. For 57% stocks that advanced, 39% declined.
Reasons Behind Thursday’s Decline
Profit booking by investors led financials stocks, which emerged as one of the biggest winners in recent time frame, to end in the negative territory, which in turn had a negative impact on the broader markets. The Financial Select Sector SPDR (XLF) lost 0.7% and was the biggest loser among the S&P 500 sectors.
Key stocks from the sector including Bank of America Corporation (BAC), Citigroup Inc. ( C) and The Goldman Sachs Group, Inc. (GS) declined 1.5%, 1.1% and 1%, respectively. While Goldman Sachs holds a Zacks Rank #1 (Strong Buy), Bank of America and Citigroup possess a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here .
Moreover, the U.S. Energy Information Administration (EIA) reported that U.S. commercial crude oil inventories rose 0.6 million barrels for the week ending Dec 23 to 486.1 million barrels. This led prices of WTI crude and Brent crude to decline by 0.5% and 0.1% to $53.77 a barrel and $56.14 per barrel, respectively. This in turn had a negative impact on energy sector. The Energy Select Sector SPDR (XLE) declined 0.2% and emerges as the second biggest decliner among the S&P 500 sectors.
However, the U.S. Department of Labor reported that jobless claims during the week ending Dec 24 decreased by 10,000 to 265,000. It also reported that the 4-week moving average dropped by 750 to 263,000 during the week. The initial claims number was however above the consensus estimate of 264,000.
Separately, strong gains in safe haven sectors such as utilities restricted the losses to some extent. The Utilities Select Sector SPDR (XLU) gained nearly 1.4% and was the biggest gainer among the S&P 500 sectors. Key stocks from the sector including PG&E Corporation ( PCG), Exelon Corporation (EXC) and Duke Energy Corporation (DUK) rose 1.7%, 1.5% and 1.3%, respectively.
Stocks That Made Headlines
The final month of 2016 saw several important initiatives being undertaken by generic drug maker, Mylan N.V. (MYL). The company announced quite a few generic launches in the U.S. in December. ( Read More)
International Business Machines Corporation (IBM) is reportedly collaborating with Rice University on sensors that it plans to put inside robots to enhance security for the elderly who live alone. ( Read More)
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