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Benchmarks ended in the red on Monday following a shift in investment from equities to bonds after Treasury bond yields reached their best level since April 2014. Expectations of an increase in growth and inflation boosted yield on the U.S. 10-year Treasury note, following which sectors like real estate and utilities that are considered as alternatives to bonds declined.
Additionally, shares of tech giant Apple slumped during the day, which in turn led the tech-based index Nasdaq to post its second worst one-day drop in 2018. Further, both the S&P 500 and the Dow witnessed their biggest one-day drop on Monday since Sept 5, 2017.
How the Benchmarks Fared?
The Dow Jones Industrial Average (DJI) decreased 0.7%, or 180.19 points to close at 26,439.48. The S&P 500 fell 0.7% to close at 2,853.53. The tech-laden Nasdaq Composite Index closed at 7,475.56, losing 0.4%. The fear-gauge CBOE Volatility Index (VIX) increased 25% to close at 13.84. A total of around 7.1 billion shares were traded on Monday, lower than the last 20-session average of 6.9 billion shares. Decliners outnumbered advancers on the NYSE by a 4.65-to-1 ratio. On Nasdaq, a 2.16-to-1 ratio favored declining issues.
What Moved the Benchmarks?
Higher rate environment and optimism of a steady economic growth and higher inflation weighed on bond prices. Lower bond prices supported the 10-year U.S. Treasury yield, which increased from 2.661% to 2.695% on Monday, reaching its highest settlement since April 2014. Higher treasury yields weighed on steady dividend paying sectors like real estate and utilities.
The Real Estate Select Sector SPDR (XLRE) declined 1.2%, becoming one of the worst performing sectors of the S&P 500. Some of its key holdings, including Equinix, Inc. (REIT) (EQIX - Free Report) and Prologis, Inc. (PLD - Free Report) declined 1.5% and 1.6%, respectively. Additionally, the Utilities Select Sector SPDR (XLU) decreased 1.3%, with its two major components Duke Energy Corporation (DUK - Free Report) and NextEra Energy, Inc. (NEE - Free Report) losing 2% and 1.3%, respectively.
Following this development, all the 11 key S&P 500 sectors suffered losses during the day. Meanwhile, investors keenly awaited President Trump’s speech on Tuesday, a slew of corporate earnings from key tech giants, monthly jobs report and Fed’s latest policy statement.
Apple To Halve iPhone X Production
Shares of Apple Inc. (AAPL - Free Report) fell 2.1% on news that the tech behemoth decided to halve its production target for the iPhone X in the first three months of the year. Apple was planning to produce 40 million units of its special-edition phone, but now just 20 million units will be produced. Apple’s adjusted production target came on the back of “slower-than-expected sales” in the holiday shopping period in key markets like Europe, U.S., and China. (Read More)
Decline in Apple’s shares led the Technology Select Sector SPDR (XLK) to fall 0.9%. One of its key holdings, Facebook, Inc. decreased 2.1%. The social networking giant holds a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Shares of Dr Pepper Snapple Group Inc. soared on Jan 29 after news came out that the beverage company will be acquired by coffee-maker Keurig Green Mountain, Inc. (Read More)
Don’t Even Think About Buying Bitcoin Until You Read This
The most popular cryptocurrency skyrocketed last year, giving some investors the chance to bank 20X returns or even more. Those gains, however, came with serious volatility and risk. Bitcoin sank 25% or more 3 times in 2017.
Zacks’ has just released a new Special Report to help readers capitalize on the explosive profit potential of Bitcoin and the other cryptocurrencies with significantly less volatility than buying them directly.
Image: Bigstock
Stock Market News for Jan 30, 2018
Benchmarks ended in the red on Monday following a shift in investment from equities to bonds after Treasury bond yields reached their best level since April 2014. Expectations of an increase in growth and inflation boosted yield on the U.S. 10-year Treasury note, following which sectors like real estate and utilities that are considered as alternatives to bonds declined.
Additionally, shares of tech giant Apple slumped during the day, which in turn led the tech-based index Nasdaq to post its second worst one-day drop in 2018. Further, both the S&P 500 and the Dow witnessed their biggest one-day drop on Monday since Sept 5, 2017.
How the Benchmarks Fared?
The Dow Jones Industrial Average (DJI) decreased 0.7%, or 180.19 points to close at 26,439.48. The S&P 500 fell 0.7% to close at 2,853.53. The tech-laden Nasdaq Composite Index closed at 7,475.56, losing 0.4%. The fear-gauge CBOE Volatility Index (VIX) increased 25% to close at 13.84. A total of around 7.1 billion shares were traded on Monday, lower than the last 20-session average of 6.9 billion shares. Decliners outnumbered advancers on the NYSE by a 4.65-to-1 ratio. On Nasdaq, a 2.16-to-1 ratio favored declining issues.
What Moved the Benchmarks?
Higher rate environment and optimism of a steady economic growth and higher inflation weighed on bond prices. Lower bond prices supported the 10-year U.S. Treasury yield, which increased from 2.661% to 2.695% on Monday, reaching its highest settlement since April 2014. Higher treasury yields weighed on steady dividend paying sectors like real estate and utilities.
The Real Estate Select Sector SPDR (XLRE) declined 1.2%, becoming one of the worst performing sectors of the S&P 500. Some of its key holdings, including Equinix, Inc. (REIT) (EQIX - Free Report) and Prologis, Inc. (PLD - Free Report) declined 1.5% and 1.6%, respectively. Additionally, the Utilities Select Sector SPDR (XLU) decreased 1.3%, with its two major components Duke Energy Corporation (DUK - Free Report) and NextEra Energy, Inc. (NEE - Free Report) losing 2% and 1.3%, respectively.
Following this development, all the 11 key S&P 500 sectors suffered losses during the day. Meanwhile, investors keenly awaited President Trump’s speech on Tuesday, a slew of corporate earnings from key tech giants, monthly jobs report and Fed’s latest policy statement.
Apple To Halve iPhone X Production
Shares of Apple Inc. (AAPL - Free Report) fell 2.1% on news that the tech behemoth decided to halve its production target for the iPhone X in the first three months of the year. Apple was planning to produce 40 million units of its special-edition phone, but now just 20 million units will be produced. Apple’s adjusted production target came on the back of “slower-than-expected sales” in the holiday shopping period in key markets like Europe, U.S., and China. (Read More)
Decline in Apple’s shares led the Technology Select Sector SPDR (XLK) to fall 0.9%. One of its key holdings, Facebook, Inc. decreased 2.1%. The social networking giant holds a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Stocks That Made Headlines
Hawaiian Holdings Q4 Earnings in Line, Decline Y/Y
Hawaiian Holdings’ (HA - Free Report) fourth-quarter 2017 earnings per share were in line with the Zacks Consensus Estimate. (Read More)
Dr Pepper Snapple, Keurig to Merge in a $18.7 Billion Deal
Shares of Dr Pepper Snapple Group Inc. soared on Jan 29 after news came out that the beverage company will be acquired by coffee-maker Keurig Green Mountain, Inc. (Read More)
Don’t Even Think About Buying Bitcoin Until You Read This
The most popular cryptocurrency skyrocketed last year, giving some investors the chance to bank 20X returns or even more. Those gains, however, came with serious volatility and risk. Bitcoin sank 25% or more 3 times in 2017.
Zacks’ has just released a new Special Report to help readers capitalize on the explosive profit potential of Bitcoin and the other cryptocurrencies with significantly less volatility than buying them directly.
See 4 crypto-related stocks now >>