Benchmarks mostly ended in the red on Monday, led by declines in energy shares. Rise in oil prices dragged energy shares down. Oil prices took a beating on concerns that rise in Iraqi exports and US output could adversely affect the impact of a deal among major oil producers to curtail production levels. The Nasdaq, on the other hand, bucked the declining trend and ended in positive territory. Gains among biotech shares helped the tech-laden index move north.
Equities have been on a tear in recent times, mostly on optimism that President-elect Donald Trump’s business-friendly policies will drive growth. But, gains have been plateauing lately as investors want higher valuations to be justified by solid economic reports and corporate profits. December’s non-farm payroll report showed considerable job additions, but, the numbers still came in below expectations.
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) decreased 0.4%, to close at 19,887.38. The S&P 500 also dropped 0.4% to close at 2,268.90. The tech-laden Nasdaq Composite Index, however, closed at 5,531.82, gaining 0.2%. The fear-gauge CBOE Volatility Index (VIX) advanced 2.1% to settle at 11.56. A total of around 6.4 billion shares were traded on Monday, less than the last 20-session average of 6.6 billion shares. Decliners outpaced advancing stocks on the NYSE. For 62% stocks that declined, 35% advanced.
Oil Prices Decline, Energy Shares Tank
Oil prices tumbled almost 4% on Monday after record Iraqi crude exports raised concerns that it would undermine OPEC’s initiative to trim abundant supply of oil. Iraq, which is incidentally OPEC’s second-biggest producer, saw exports from its southern Basra ports touch a record high of 3.51 million barrels per day (bpd) last month. OPEC, in the meantime, had agreed to curtail oil output in November for the first time since 2008.
Rise in active U.S. oil rigs also hinted at further increase in crude production levels. According to Baker Hughes Incorporated ( BHI) the number of active U.S. rigs drilling for oil jumped by 4 to 529 rigs last week, marking the tenth weekly climb in a row. Such number of active domestic oil rigs is the highest since Dec 2015.
Energy shares fell due to decline in oil prices. The Energy Select Sector SPDR (XLE) declined 1.5%, the highest among the S&P 500 sectors. Dow components Exxon Mobil Corporation ( XOM) and Chevron Corporation (CVX) decreased 1.7% and 0.9%, respectively. 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 .
Biotech shares finished in the green, led by gains in Ariad Pharmaceuticals Inc. (ARIA). Shares of Ariad spiked 72.9% after declaring that it’s being taken over by Takeda, a leading Japanese pharmaceutical company. The iShares Nasdaq Biotechnology (IBB) rose 1.4%. Both its two key holdings, Biogen Inc. (BIIB) and Amgen Inc. (AMGN) advanced 1.4% and 1.3%, respectively.
Stocks That Made Headlines
Lululemon Revises Q4 View on Robust Holiday Show
Lululemon Athletica Inc. ( LULU) emerged strong this holiday season. ( Read More )
Urban Outfitters Holiday Comps Up, Lower Traffic a Worry
Urban Outfitters, Inc. ( URBN) disclosed its holiday sales numbers, wherein comparable retail segment net sales gained. ( Read More )
Citrix Buys Application Layering Inventor Unidesk
Citrix Systems ( CTXS) recently announced that it has acquired Unidesk. ( Read More )
Hawaiian Holdings Gains on Impressive Traffic Results
Hawaiian Holdings, Inc. ( HA) saw an increase in its stock price following its impressive traffic results. ( Read More )
Genesco Posts Flat Holiday Comps, Updates View; Stock Up
Genesco Inc. (GCO) reported flat comparable sales (comps) – including both stores and direct sales – for the fourth quarter through Jan 5, 2017. ( Read More )
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Baker Hughes Incorporated (BHI): Free Stock Analysis Report
Chevron Corporation (CVX): Free Stock Analysis Report
Exxon Mobil Corporation (XOM): Free Stock Analysis Report
Biogen Inc. (BIIB): Free Stock Analysis Report
Amgen Inc. (AMGN): Free Stock Analysis Report
lululemon athletica inc. (LULU): Free Stock Analysis Report
Urban Outfitters, Inc. (URBN): Free Stock Analysis Report
Citrix Systems, Inc. (CTXS): Free Stock Analysis Report
Hawaiian Holdings, Inc. (HA): Free Stock Analysis Report
Genesco Inc. (GCO): Free Stock Analysis Report
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