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Stock Market News for June 01, 2017

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Benchmarks closed in the red on Wednesday weighed down primarily by financials. Banks stocks dragged financials lower after J.P. Morgan and Bank of America signaled a potential slump in second-quarter trading. Meanwhile, energy shares dropped following concerns that major oil producing countries will not be able to implement effective production curbs to stabilize the global crude market.

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) declined 0.1% to close at 21,008.65. The S&P 500 fell 1.11 points to close at 2,411.80. The tech-laden Nasdaq Composite Index declined 0.1% to close at 6,198.52. A total of around 7.8 billion shares were traded on Wednesday, higher than the last 20-session average of 6.7 billion shares. The fear-gauge CBOE Volatility Index (VIX) traded near 10.4. Advancers outnumbered declining stocks on the NYSE by a 1.01 to 1 ratio.

Financials Drop

Financials declined on Wednesday after executives at the two major U.S. banks J.P. Morgan Chase & Co. (JPM - Free Report) and Bank of America (BAC - Free Report) signaled a potential drop in second-quarter trading.

Speaking at an industry conference, JPMorgan Chief Financial Officer Marianne Lake said that Chase’s own trading is down about 15% so far this year compared to the prior year period. Bank of America Chief Executive Brian Moynihan also said that the company’s second-quarter trading revenue will be down slightly from a year ago as well. Shares of Bank of America fell 2.1%, while JPMorgan closed the day down 2.1%. (Read More)

The broader Financials Select Sector SPDR (XLF) declined 0.9%, emerging as the worst performing sector of S&P 500. Some of the key holdings of the financial sector in the S&P 500 including Wells Fargo & Co (WFC - Free Report) and Goldman Sachs Group (GS - Free Report) decreased 2% and 3.3% respectively. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Oil Prices Drop

Oil prices declined on Wednesday, hitting a three-week low. Oil prices fell as investors remained concerned that production cuts by the world’s leading exporters may not be enough to stabilize the global crude market.

Signs of increasing crude output in Nigeria and Libya had a negative impact on the oil prices. According to the National Oil Corporation, Libya's oil production increased to 827,000 barrels per day (bpd), surpassing a three-year peak of 800,000 bpd. Moreover, as per the Energy Information Administration, U.S. production averaged 9.3 million bpd, which is 6.3% more than year-ago levels.

WTI crude prices declined by $1.34, or 2.8%, to $48.32 a barrel. The broader Energy Select Sector SPDR (XLE) declined 0.4%. Some of the key holdings of the energy sector in the S&P 500 including Exxon Mobil Corp (XOM - Free Report)  and Chevron Corp (CVX - Free Report)  declined by 0.7% and 0.6% respectively.

Mixed Economic Data

As per the Federal Reserve’s Beige Book, the U.S. economy expanded at a “modest or moderate” pace through late May and is still growing at the same pace. The report strengthened the possibility of key rate hikes by the central bank in its next big meeting in two weeks.

As per the National Association of Realtors, pending home sales in April tumbled for the second month in a row. Moreover the figures were down year-over-year nationally and in all four major regions. Pending Home Sales Index fell 1.3% to 109.8 in April against a consensus estimate of 0.5% increase. The figures were downwardly revised 111.3 in March.

Monthly Roundup

For the month, the Nasdaq, S&P 500 and Dow advanced 2.5%, 1.2% and 0.3% respectively. During the month, Federal Open Market Committee released minutes where Fed officials agreed to trim down Fed’s $4.5 trillion balance sheet.

The Trump administration released its budget proposal which seeks to cut federal spending by $3.6 trillion with a focus on balancing the budget over the next decade. Moreover, Trump discharged Director of the Federal Bureau of Investigation (FBI), James Comey from office. Meanwhile, U.S. auto industry reported disappointing sales in April, with sales hitting 16.88 million, below an expected annual rate of 17.2 million.

Stocks that made Headlines

AT&T Set to Entertain its Unlimited Wireless Customers

U.S. telecom behemoth AT&T Inc. (T - Free Report) has unveiled a new video and unlimited wireless offering for AT&T Unlimited Choice customers and AT&T Unlimited Plus customers. (Read More)

Dollar General Stock Up on Q1 Earnings & Sales Beat

Dollar General Corporation (DG - Free Report) reported better-than-expected results for the second straight quarter, as the company posted first-quarter fiscal 2017 financial numbers. (Read More)

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