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Benchmarks mostly finished in the green on Monday following an impressive performance by technology shares. The Nasdaq finished at a record high, boosted primarily by gains in shares of Apple and Netflix. However, decline in shares of Boeing and Home Depot dragged down the Dow. Meanwhile, investors kept a close watch on weak economic reports.
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 0.1% to close at 20,913.46. The S&P 500 rose 0.2% to close at 2,388.33. The tech-laden Nasdaq Composite Index advanced 0.7% to close at 6,091.60. The fear-gauge CBOE Volatility Index (VIX) declined 6.3% to 10.14, after reaching its lowest level since 2007. A total of around 6 billion shares were traded on Monday, lower than the last 20-session average of 6.5 billion shares. Advancers outnumbered declining stocks on the NYSE by a 1.32 to 1 ratio.
Technology Shares Boosted Nasdaq
The tech-laden Nasdaq finished at record high of 6,091.60 after reaching an all-time intraday high of 6,100.73. The upside is driven by impressive stock market performance by Apple AAPL and other technology stocks.
Apple is scheduled to report earnings on Tuesday afternoon, where analysts expect revenues of more than $7 billion in services. The company is expected to report $2.01 per share on $52.6 billion in revenues, up 5.9% and 4.1% from the year-earlier levels, respectively.
The stock was up strongly on the last earnings release when it handily beat on the top- and bottom-lines and showed impressive momentum in its services business that management guided towards doubling over the next four years. The stock has been a solid performer since the last earnings report and is currently up 24% in the year-to-date period, outperforming the Zacks Tech sector (up 11.2%) and the S&P 500 index (up 6.8%). Shares of the company gained 2%. ( Read More )
Netflix NFLX reported first quarter 2017 results with earnings beating the Zacks Consensus Estimate. However, revenues missed the same. Nonetheless, both the metrics registered strong growth on a year-over-year basis. Netflix added 4.95 million subscribers in the last reported quarter, taking the total count to 98.75 million.
Rapid international expansion has paid off for Netflix, with the company adding 3.53 million net new subscribers overseas in the quarter. Netflix’s growing subscriber base is the primary factor that helps it generate significant revenues. Shares of the company advanced 2.1%.
Microsoft Corporation MSFT posted its better-than-expected quarterly results. The company is also pursuing growth in the SMB segment through partnerships with infrastructure providers such as GoDaddy. Shares of the company advanced 1.4%.
Shares of Alphabet Inc GOOGL advanced 0.9% following the release of its first quarter fiscal 2017 financial results. The impressive performance is attributable to benefits from its ongoing investments in product innovation. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here .
Strong performances from Apple, Netflix, Microsoft and Alphabet lifted investors’ sentiment, which ultimately boosted the Nasdaq.
Bank stocks fell following comments by President Donald Trump about breaking up of the U.S.’s largest banks. The Dow traded lower after Trump’s comments but trimmed losses and ultimately closed about 25 points lower. Trump commented that he was considering setting up a policy that would separate a banks’ consumer and investment banking divisions. These comments had an adverse impact on investors’ confidence which ultimately had a negative impact on equities.
According to the Commerce Department, consumer spending remained unchanged in March. As per estimates released by the Bureau of Economic Analysis, personal income increased $40.0 billion or 0.2% in March against the Consensus estimate of 0.3%.
Meanwhile, the PCE price index declined 0.2%, marking its first decline in more than a year. The PCE price index decreased 0.1%, excluding food and energy. The ISM manufacturing index declined to 54.8 in April against the consensus estimate of 56.4. The ISM manufacturing index closed at 57.2 in March.
Stocks that made Headlines
Canadian energy transportation and service provider Pembina Pipeline Corp. PBA recently announced that it is considering the buyout of smaller rival Veresen Inc. in a stock-and-cash deal valued at $7.1 billion, including debt. ( Read More )
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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.