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Markets suffered losses on Thursday after investors sold off financial, consumer discretionary and telecom shares. Further, banking stocks suffered losses after yield on the U.S. 10-year Treasury note slumped on Thursday. Also, as Hurricane Irma gained momentum, insurance sector tanked and markets suffered losses. Meanwhile, the Congress approved the packagewhich provides funds for the victims of Hurricane Harvey, extends the debt ceiling and offers temporary government funding to keep the government from shutting down.
The Dow Jones Industrial Average (DJIA) closed at 21,784.78, declining 0.1%. The S&P 500 Index (INX) decreased 0.1% to close at 2,465.10. Meanwhile, the Nasdaq Composite Index (IXIC) closed at 6,397.37, increasing 0.1%. Advancing issues outnumbered decliners on the NYSE by 1.01-to-1 ratio. On the Nasdaq, decliners outnumbered advancers by a 1.03-to-1 ratio. The CBOE VIX declined 3.3% to close at 96.29.
Dow and the S&P 500 Finish Lower
The S&P 500 finished lower on Thursday, after market watchers started selling off financial and telecom shares. Such a sell off was the result of geopolitical tensions between Pyongyang and Washington and also fears of Hurricane Irma. The prospect of another missile test by North Korea over the weekend had investors reaching for safe havens.
Shares of Goldman Sachs GS and Walt Disney Co. DIS declined 1.4% and 4.4% respectively, weighing on the Dow, which lost 22.86 points. Shares of Disney declined after the company’s CEO, Bob Iger lowered full-year guidance for earnings. Both the companies possess a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here .
Losses for the financial sector continued after banking stocks declined due to falling treasury yields. The yield on the U.S. 10-year Treasury note slumped 2.1% on Thursday. This also led to losses for Citigroup C and Bank of America BAC , with shares of both companies declining more than 1%. Meanwhile, eight of the 11 main sectors of the S&P 500 finished in the green. However, the Financial Select Sector SPDR Fund (XLF) closed 1.7% lower. The SPDR closed at 23.88, its worst level since early July.
Insurance Stocks Continue To Decline
Hurricane Irma destroyed parts of the Caribbean after gaining traction on Thursday. The hurricane is expected to make landfall on the coast of Florida over this weekend. The storm comes just weeks after the devastation caused by Hurricane Harvey. Speculations about its fallout continued to sendthe insurance stocks lower. The sector suffered losses on Thursday with the iShares U.S. Insurance ETF (IAK) and PowerShares KBW Prpty & Casualty Ins ETF (KBWP) plummeting about 2.1% and 3% respectively, even as market watchers closely followed the path of the hurricane. Shares of XL Group XL and Chubb Ltd. CB slumped 5% and 2.5% respectively.
Senate Approves Funding for Harvey Relief
The Senate gave a go ahead to the package providing funds for the victims of Hurricane Harvey, extending of the debt ceiling and offering temporary government funding to keep the government from shutting down. President Trump had agreed with the Democrats regarding terms of the package on Wednesday. Congress approved $15.25 billion for the relief of victims of Hurricane Harvey. The amount also provides for possible recovery efforts in case of any casualties after Hurricane Irma makes a landfall over the weekend.
Interest Rates Remain Unchanged After the ECB Meeting
Investors had a keen eye on the European Central Bank’s monetary policy meeting held on Thursday. The ECB decided unanimously that interest rates would remain unchanged. However, the ECB president Mario Draghi commented that the governing council would continue purchasing assets at ‘current monthly pace’ of 60 billion euro. He also said that this might continue through December 2017 or further if required.
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