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Stock Market News For Apr 1, 2019

Zacks Equity Research
Caterpillar (CAT) beat both earnings and revenue estimates in Q1 and raised 2019 guidance on the back of discrete tax benefit.

Markets closed in the green on Friday, the last trading day of the first quarter of 2019. Positive developments on the trade war front boosted investor sentiment and overshadowed concerns related to a slowdown in the country’s economic growth in the last quarter of 2018. Investors also keenly followed the fortunes of Lyft as it made its debut on the bourses. Notably, the S&P 500 posted its best rise in a single quarter in almost a decade.

The Dow Jones Industrial Average (DJI) increased 0.8%, to close at 25,928.68. The S&P 500 increased 0.7% to close at 2,834.40. The tech-laden Nasdaq Composite Index closed at 7,729.32, gaining 0.8%. The fear-gauge CBOE Volatility Index (VIX) decreased 5% to close at 13.76. Advancers outnumbered decliners on the NYSE by a 2.01-to-1 ratio. On Nasdaq, a 1.68-to-1 ratio favored declining issues.

How Did the Benchmarks Perform?

The Dow amassed 211.2 points to close in the green. Gains for the 30-stock index were propelled by a rally in shares of Boeing BA, UnitedHealth UNH and Caterpillar CAT, which gained 1.9%, 2.1% and 2.4%, respectively.

The S&P 500 rose 19 points to also end in the green. Of the 11 major sectors of the S&P 500, 9 ended in the positive territory, with healthcare and industrials shares leading the advancers. The Health Care Select Sector SPDR Fund (XLV) and Industrial Select Sector SPDR Fund (XLI) increased 1.2% and 1.1%, respectively on Friday.

Shares of CarMax, Inc. KMX rallied 9.6% and supported gains for the broader index. The stock carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Meanwhile, the Nasdaq increased 60.2 points to close in positive territory. Gains for the tech-laden index were broad-based. For the week, the Dow, the S&P 500 and the Nasdaq gained 1.2%, 1.5% and 1.1%, respectively. Optimism around U.S. – China trade negotiations boosted the markets througthe week.

Lyft Debuts on Nasdaq

Ride-sharing company, Lyft LYFT went public on Mar 29 on the Nasdaq. The debut price for the stock was $87.24 a share, 20% higher than $72 a share, the company’s initial pricing on Mar 28. This resulted in boosting the company’s initial market capitalization to $25 billion. Demand for the stock remained strong and shed light on the fact that investors were confident about the health of the current bull market.

Optimism Around U.S.- China Trade Deal

A statement released by the White House on Mar 29 showed that trade talks between the United States and China were making progress. The statement described the negotiations as “candid and constructive.” Further, U.S. Treasury Secretary Steven Mnuchin tweeted on Friday that he “concluded constructive trade talks in Beijing” along with U.S. Trade Representative Robert Lighthizer.

Moreover, both the dignitaries are plaining to meet Chinese vice premier Liu He again next week in Washington. These developments boosted market sentiment and eased fears related to weak economic growth in the country.

Economic Data

On the economic data front, the final reading for the U.S. GDP for fourth quarter 2018 fell to an annualized rate of 2.2%from 2.6% in the previous quarter. The consensus estimate for the period was for a pace of 2.3%.

Meanwhile, U.S. personal incomes for February increased 0.2%, reported the Commerce Department. On the housing front, new-home sales increased to 667,000 in February, 4.9% higher than January. Meanwhile, pending home sales declined 1% in February, lower than the consensus estimate of a 0.5% increase.

Monthly and Quarterly Roundup

After a fabulous February, Wall Street’s rally continued in March as well. All three major stock indexes – the Dow, S&P 500 and Nasdaq Composite – gained 0.1%, 1.8% and 2.6%, respectively. Several positive developments on trade war front, Fed’s decision to keep interest rates unchanged and consistent performance by technology shares were major catalysts for U.S. stocks in March.

For the quarter, the Dow, the S&P 500 and the Nasdaq rallied 11.2%, 13.1% and 16.5%. This marked the S&P 500’s best quarterly rise since the third quarter of 2009. Economic woes of the Eurozone and fears related to Brexit weighed on the investors. However, optimism around the trade war, Fed’s dovish monetary stance, temporary end to partial government shutdown and stable oil prices were major catalysts behind the stock market rally.

Further, stunning fourth quarter earnings and tech sector’s strong performance in last three months also contributed to the stock market rally in the period between January and March.

Zacks' Top 10 Stocks for 2019

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