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Benchmarks finished in the green on Tuesday after consumer confidence surged to its highest level in more than sixteen years. Strong consumer confidence reading showed that the U.S. economy has improved significantly. Financial stocks gained following this economic release and energy stocks rose due to stronger oil prices.
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 0.7% to close at 20,701.50. The Dow ended its eighth day losing streak, its longest losing streak since August 2011. The Dow rose 150.52 points with Apple Inc (AAPL – Free Report) contributing most of the gains. The S&P 500 rose 0.7% to close at 2,358.57. The tech-laden Nasdaq Composite Index, meantime, closed at 5,875.14, gaining 0.6%. The fear-gauge CBOE Volatility Index (VIX) declined 7.8% to settle at 11.53. A total of around 3.36 billion shares were traded on the NYSE on Tuesday. Advancers outpaced declining stocks on the NYSE. For 71% stocks that advanced, 25% declined.
Consumer confidence hit 125.6 in March, up from 116.1 in the previous month according to data from The Conference Board. Consumer confidence surged to its highest level since December 2000 amid growing labor market optimism. Improved consumer confidence is likely to increase consumption and spending, which in turn is expected to make a positive impact on U.S. growth outlook.
This surge in consumer confidence, which created a positive impression about the economy, helped financial stocks to end in positive territory. Initially, the failure of the healthcare bill raised doubts over the implementation of Trump’s pro-growth policies including tax cuts, infrastructure spending and deregulation policies. This development, along with Federal Reserve’s conservative stance on rate-hike outlook has kept financial stocks in check until now.
Nevertheless, the Financial Select Sector SPDR (XLF) increased 1.4% and was one of the best performing sectors in the S&P 500. Some of its major holdings of the sector including JPMorgan (JPM – Free Report) and Bank of America (BAC – Free Report) rose 1.6% and 2.0%, respectively.
The energy sector was boosted up by rise in oil prices. WTI crude prices increased by 1.3% to $48.37 a barrel due to a severe disruption to Libyan oil supplies. Fall in overall oil supply led oil prices to increase which had a positive impact on energy stocks.
Some of the sector’s key holdings, including Chesapeake Energy Corp. (CHK – Free Report) and Transocean LTD (RIG – Free Report) increased 4.5% and 1.5% respectively. The broader Energy Select Sector SPDR (XLE) gained by 1.4%, which came out to be the best performing sector in the S&P 500.
Stocks that made Headlines
Exploration specialist, Hurricane Energy recently announced that about 1 billion barrels of oil could lie in the untapped Greater Lancaster area, 60 miles west of Shetland. (Read More)
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