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Benchmarks mostly rose on Wednesday, boosted primarily by energy and consumer discretionary shares. Energy shares gained due to increase in oil prices. Consumer discretionary shares gained following a surge in consumer confidence level. Improved consumer confidence is expected to make a positive impact on consumer spending.
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 0.2% to close at 20,659.32. The Dow fell for the ninth session out of the past 10. However, the S&P 500 gained 0.1% to close at 2,361.13. The tech-laden Nasdaq Composite Index rose for a fourth straight day to close at 5,897.55, gaining 0.4%. The fear-gauge CBOE Volatility Index (VIX) declined 1.0% to settle at 11.42. A total of around 5.8 billion shares were traded on Wednesday lower than the last 20-session average of 6.9 billion shares. Advancers outpaced declining stocks on the NYSE. For 63% stocks that advanced, 34% declined.
Energy and Consumer Discretionary Boosted the Benchmarks
Oil prices rose due to a major cut in oil supply in Libya as output from its western oilfields of Sharara and Wafa has been blocked by armed protesters. Oil production fell more than 250,000 barrels per day (bpd) this week. WTI crude prices rose by 2.3% to $49.51 a barrel. The fall in oil output led oil prices to increase which in turn had a positive impact on energy stocks.
There has been a broad-based gain in energy sector on Wednesday which boosted the overall market due to rise in oil prices. The Energy Select Sector SPDR (XLE) rose 1.4% and was the biggest advancer among the S&P 500 sectors. Some of its key holding, including Halliburton Company (HAL) and EOG Resources (EOG) gained by 2.5% and 1.8% respectively.
The consumer discretionary sector (XLY) increased 0.6% backed by a surge in consumer confidence level. Some of the sector’s key holdings, including Nordstrom, Inc. (JWN), Kohl’s Corporation (KSS) gained by 5.4 % and 4.5% respectively. Amazon.com, Inc. (AMZN) hit an all time high and rose 2.1%, giving a boost to S&P 500 and Nasdaq. The strong consumer confidence showed that there has been a positive outlook for the U.S. economy.
Financial Shares Decline
Fed raised its key interest rates for the first time this year by 25 basis points. The investors were expecting at least three more rate hikes but the central bank intended to increase rates only two times further. Fed’s relative conservative stance on rate hike outlook created negative sentiment among investors. Last week, the failure to pass the healthcare bill through the House of Representatives put questions over Trump’s ability to implement his other pro-growth agenda including tax reforms, infrastructure spending and deregulation policies, which in turn had an adverse effect on investor confidence.
The Financial Select Sector SPDR (XLF) declined 0.6% and was the biggest decliner among the S&P 500 sectors. Key components from this sector like U.S. Bancorp (USB) and Wells Fargo & Co (WFC) fell 1.3% and 0.5%, respectively.
Stocks that made Headlines
Lululemon (LULU) Plunges on Q4 Earnings Miss & Bleak Q1 View
Lululemon Athletica Inc. (LULU) posted mixed results for fourth-quarter fiscal 2016, wherein both sales and earnings improved year over year while earnings lagged estimates. (Read More)
Samsung Unveils Galaxy S8 & S8+, to Hit Stores On Apr 21
Yesterday, South Korean giant, Samsung Electronics unveiled its latest smart phones, Galaxy S8 and S8+, at the “Unpacked” event held in New York. (Read More)
Here’s Why ConocoPhillips Will Sell $13.3B Canadian Assets
Upstream energy company ConocoPhillips (COP) recently announced its decision to divest a huge chunk of its Canadian properties to Cenovus Energy Inc. (CVE). (Read More)
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Halliburton Company (HAL): Free Stock Analysis Report
EOG Resources, Inc. (EOG): Free Stock Analysis Report
Nordstrom, Inc. (JWN): Free Stock Analysis Report
Kohl’s Corporation (KSS): Free Stock Analysis Report
Amazon.com, Inc. (AMZN): Free Stock Analysis Report
U.S. Bancorp (USB): Free Stock Analysis Report
Wells Fargo & Company (WFC): Free Stock Analysis Report
lululemon athletica inc. (LULU): Free Stock Analysis Report
ConocoPhillips (COP): Free Stock Analysis Report
Cenovus Energy Inc (CVE): Free Stock Analysis Report
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