Benchmarks finished in the green for the second straight session on Friday, but declined for the week, unable to recover fully from the losses it suffered due to events at the White House. These events centered around a report on Trump’s interference into the FBI probe regarding Mike Flynn’s involvement with Russian sources. The broader market was boosted by gains in industrials and energy shares. Shares of energy companies moved north due to an uptick in oil prices following a rise in expectations of production cuts by major oil producers.
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) gained 0.7% or 141.82 points to close at 20,804.84. The S&P 500 rose 0.7% to close at 2,381.73. The tech-laden Nasdaq Composite Index advanced 0.5% to close at 6,083.70. The fear-gauge CBOE Volatility Index (VIX) closed at 12.33 on Friday. Advancers outnumbered declining stocks on the NYSE by a 4.69 to 1 ratio.
Political Turmoil Eases
Markets stabilized on Friday after the controversy relating to investigation into former National Security Adviser Mike Flynn’s involvement with Russian sources had a negative impact on investors’ sentiment throughout the week. In fact, for the week, the S&P 500, the Dow and The Nasdaq declined 0.4%, 0.4% and 0.6%, respectively.
As per a memo written by former FBI Director James Comey, Trump had intervened in FBI’s probe into former National Security Adviser Michael Flynn's connections with Russia. Meanwhile, former FBI head Robert Mueller was appointed as special counsel by Deputy Attorney General Rod Rosenstein to investigate possible collaboration between the Trump campaign and Russia.
Industrials Shares Gain
The broader Industrials Select Sector SPDR (XLI) advanced 1.3% on Friday, emerging as the best performing sectors of S&P 500. Some of the key holdings of the industrials sector in the S&P 500 including General Electric Co GE and Boeing Co BA gained 2.1% and 1.9% respectively.
Addiitionally, Deere & Company DE and Autodesk, Inc. ADSK reported better than expected earnings results. Shares of Deere & Company advanced 7.3%, following the release of the company’s better-than-expected earnings in second-quarter fiscal 2017. The company’s second-quarter fiscal 2017 earnings surged around 59.6% year over year to $2.49 per share. Earnings also beat the Zacks Consensus Estimate of $1.70 by a wide margin of 46.5%.Revenues surpassed the Zacks Consensus Estimate of $7.244 billion.
Shares of Autodesk, Inc. surged by 14.7%, after the company reported better than expected first-quarter fiscal 2018 quarterly revenues. However, the company reported adjusted loss (including stock-based compensation expense) of $0.43 per share, wider than the Zacks Consensus Estimate of a loss of $0.36. Strong performance from Deere & Company and Autodesk had a positive impact on investor sentiment, which ultimately had a positive impact on the broader market.
Energy Shares Gain
Oil prices gained on Friday following an increase in expectations that OPEC and other major oil producing countries would enter into a deal to extend oil production cuts at a meeting scheduled next week. OPEC and non-OPEC members including Russia are expected to extend production cuts.
Consequently, WTI crude prices increased by $0.98, or 2%, to $50.33 a barrel. The broader Energy Select Sector SPDR (XLE) advanced 1.2%, emerging as one of the best performing sectors of S&P 500. Some of the key holdings of the energy sector in the S&P 500 including EOG Resources EOG and ConocoPhillips COP both gained by 2.3%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Stocks that made Headlines
Campbell Stock Down on Drab Q3 Earnings, Sales View
After back-to-back positive earnings surprises in the last two quarters, Campbell Soup Company CPB delivered a miss in third-quarter fiscal 2017. (Read More)
Ross Stores Tops Q1 Earnings, Issues Q2 Guidance
Ross Stores, Inc. ROST reported strong first-quarter fiscal 2017 results, wherein both the top line and the bottom line beat our expectations as well as the company’s earnings projection. (Read More)
BP Plc Projects Significant Production Growth by 2020
Energy giant BP Plc BP recently announced that it anticipates production to reach 4 million barrels of oil equivalent per day (BOE/D) by the end of 2020. (Read More)
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