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Stock Market News for Mar 18, 2020

Zacks Equity Research

Wall Street rebounded and recovered some of its lost ground on Tuesday following news that President Donald Trump plans to seek Congressional approval for approximately $1 trillion as a fiscal stimulus package to combat coronavirus-induced market mayhem. All three major stock indexes ended in the green.

The Dow Jones Industrial Average (DJI) jumped 5.2% or 1,048.79 points to close at 21,237.31. The S&P 500 climbed 6% or 143.06 points to close at 2,529.19. Meanwhile, the Nasdaq Composite Index closed at 7,334.78, soaring 6.2% or 430.19 points. A total of 16.9 billion shares were traded Tuesday, higher than the last 20-session average of 13.98 billion. The CBOE VIX decreased 8.2% to close at 75.91. Advancers outnumbered decliners on the NYSE 1.44-to-1 ratio. On Nasdaq, 1.94-to-1 ratio favored advancing issues.  

How Did The Benchmarks Perform?

The Dow closed in positive territory with 27 components of the total 30 components of the blue-chip index closed in the green. The rest three stocks finished in red. The benchmark S&P 500 ended in the green with each of its 11 sectors posted gains. The Utilities Select Sector SPDR (XLU) jumped 12.8%.

Meanwhile, the tech-laden Nasdaq Composite finished in the green driven by rally of large-cap stocks. Exelon Corp. EXC was the major gainer of Nasdaq Composite as stock price rallied 18%. Exelon carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank stocks here

Trump to Unveil Massive Stimulus Package

On Mar 17, President Donald Trump sought the approval of the Congress for a massive fiscal stimulus worth anywhere from $850 billion to more than $1 trillion to counter the coronavirus effect on the economy. Of this package, $500 to $550 billion is likely to be utilized in direct payments or tax cuts. Small business assistance will be around $200 to $300 billion. Airline industry is likely to get $50 to $100 billion.

Moreover, The U.K. government has announced new financial measures worth £330 billion ($398 billion) of government-backed loans and guarantees, which the businesses can avail if they need cash for operation.

Economic Data

The Department of Commerce reported that retail sales in February declined 0.5% compared with a gain of 0.6% in January. The consensus estimate was for a gain of 0.1%. The core retail sales (excluding motor vehicles and part) were also down 0.4%. Notably, retail sales data is a major indicator of U.S. consumer spending, which constitutes 70% of the U.S. GDP.

Industrial production jumped 0.6% in February surpassing the consensus estimate of 0.4%. Notably, January’s data was revised downward to a decline of 0.5% from a drop of 0.3% reported earlier. The manufacturing production grew 1%, mining output fell 1.5% and Utility output climbed 7.1%.

Meanwhile, capacity utilization that reflects the limits to operating the nation’s factories, mines and utilities, rose to 77% in February from 76.6% in January. However, the data was slightly below the consensus estimate of 77.1%.

Stocks That Made Headline

Cimarex to Cut 2020 Capex Without Denting Production Levels

Cimarex Energy Co. XEC recently announced that its 2020 capital investment program will likely be down 40-50% from its original guidance of $1.25-$1.35 billion. (Read More)

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