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Stock Market News For Jan 11, 2019

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The bull-run for the U.S. stocks continued for the fifth straight day on Thursday buoyed by Fed Chairman Jerome Powell’s statement that the central bank will maintain patience regarding future rate hikes. Meanwhile, partial government shutdown remained a concern. All three major stock indexes ended in the green.

The Dow Jones Industrial Average (DJI) closed at 24,001.92, gaining 0.5% or 122.80 points. The S&P 500 Index (INX) also rose 0.5% to close at 2,596.64. Meanwhile, the Nasdaq Composite Index (IXIC) closed at 6,986.07, climbing 0.4%. A total of 7.3 billion shares were traded on Thursday, lower than the last 20-session average of 8.9 billion shares. Advancers outnumbered decliners on the NYSE by 1.61-to-1 ratio. On the Nasdaq, advancers had an edge over decliners by 1.19-to-1 ratio.  The CBOE VIX decreased 2.4% to close at 19.50.

How Did the Benchmarks Perform?

The Dow ended in positive territory for the fifth successive day. Notably, 20 components of the 30-stock blue-chip index finished in the green while the remaining ten closed in the red. The S&P 500 closed in positive territory for the fifth consecutive day. The Real Estate Select Sector SPDR (XLRE), Utilities Select Sector SPDR (XLU) and Industrials Select Sector SPDR (XLI) are major gainers with 1.6%, 1.4% and 1.4%, respectively. Notably, ten out of a total 11 sectors of the benchmark index closed in the green while one finished in the red.

The tech-heavy Nasdaq Composite also ended in the green after rallying for fifth straight days, due to strong performance by large-cap tech stocks. Shares of Netflix Inc. (NFLX - Free Report) and Intel Corp. (INTC - Free Report) surged 1.5% and 1.2%, respectively. Both stocks carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Fed Signals Dovish Monetary Stance

On Jan 10, at an Economic Club of Washington luncheon, the Fed Chairman Jerome Powell said that the central bank will maintain patience about future rate hikes and will remain flexible about changing policy variables if economic outlook takes a negative turn.

On Jan 9,the Fed released its FOMC minutes stating that the central bankcould be patient about future interest rate increases. Fed officials are “less clear” about their future course of action regarding hike in benchmark interest rate. Several Fed officials have argued that lack of inflationary pressure in the U.S. economy does not call for a tight monetary policy which may act as a hindrance for steady state growth of the economy.

Earlier on Jan 4, Fed Chairman Jerome Powell said that the central bank will adjust interest rate if it witnesses any sort of unexpected fluctuations in the U.S. economy. The Fed will also reconsider its balance sheet reduction policy in order to keep interest rates market friendly.

Partial Government Shutdown: a Concern

Ongoing partial government shutdown may now extend over a longer period. On Jan 10, President Donald Trump tweeted he will not be going to the World Economic Forum in Davos due to his standoff with Democrats over Mexican border wall funding.

On Jan 9, Trump tweeted that his meeting with House Speaker Nancy Pelosi and Senate Minority Leader Chuck Schumer related to ongoing partial government shutdown was "a total waste of time." The United States is facing partial government shutdown for last 18 days owing to disagreement between Trump and Democratic lawmakers over funding for a U.S.-Mexico border wall.

Some government employees are likely to miss their first paycheck this week as a result of this shutdown. However, the Internal Revenue Service has announced on Jan 7 that it will process income tax refunds even during the shutdown period.

Economic Data

Initial jobless claims declined by 17,000 to a seasonally adjusted 216,000 for the week ended Jan 5. The figure was lower than the consensus estimate of 226,000. The number of people already collecting unemployment benefits, known as continuing claims, dropped by 28,000 to 1.72 million.

Stocks That Made Headline

American Airlines Stock Falls on Bleak Q4 Guidance

Shares of American Airlines Group (AAL - Free Report) tumbled on Jan 10 following a guidance revision for the fourth quarter of 2018. (Read More)

PVH Corp Raises View, Reorganizes Calvin Klein Unit, Stock Up

PVH Corp. (PVH - Free Report) has gained investors’ confidence, with its shares rising as much as 5.9% in after-hours trading yesterday, following the company’s raised adjusted profit forecast for the fourth quarter and fiscal 2018. (Read More)

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