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Benchmarks finished mixed on Friday as investors digested discouraging fourth-quarter bank earnings that offset a drop in wholesale prices, which raised hopes of interest rate cuts this year. While the 30-stock Dow ended in the red, the S&P 500 and the Nasdaq somehow managed to finish in the positive territory. For the week, however, all the major bourses closed in the green. The stock market was closed on Monday for Martin Luther King, Jr. Day.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) declined 0.3% or 118.04 points to close at 37,592.98. Notably, 15 components of the 30-stock index ended in positive territory, while 15 ended in negative zone.
The tech-heavy Nasdaq Composite finished at 14,972.76, rising 0.02% due to the strong performance of large-cap technology stocks. The major gainer of the Nasdaq Composite was MercadoLibre, Inc. (MELI - Free Report) , after jumping 4.2%. MercadoLibre currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The S&P 500 gained 0.1% to finish at 4,783.83. Out of 11 broad sectors of the benchmark, seven ended in positive territory, while four finished in red. The Energy Select Sector SPDR (XLE), the Real Estate Select Sector SPDR (XLRE) and the Utilities Select Sector SPDR (XLU) rose 1.1%, 0.8% and 0.6%, respectively, while the Consumer Discretionary Select Sector SPDR (XLY) declined 1.2%.
The fear-gauge CBOE Volatility Index (VIX) increased 2.1% to 12.70. A total of 10.57 billion shares were traded on Friday, lower than the last 20-session average of 12.06 billion. The S&P 500 posted 37 new 52-week highs and no new lows; the Nasdaq Composite recorded 134 new highs and 86 new lows.
Bank Earnings, PPI, and Fed Expectations
The recent financial reports, from Citigroup Inc. (C - Free Report) and Bank of America Corporation (BAC - Free Report) present an outlook for the financial sector.
Citigroup Inc. (C - Free Report) reported fourth-quarter fiscal 2023 adjusted earnings of $0.84 per share, which surpassed the Zacks Consensus Estimate of $0.73 per share. The bank retailer generated total revenues of $17.44 billion, which lagged the Zacks Consensus Estimate of $18.66 billion. The stock price of Citigroup rose 1%.
Bank of America Corporation (BAC - Free Report) reported fourth-quarter fiscal 2023 adjusted earnings per share of $0.70, which surpassed the Zacks Consensus Estimate of $0.6 per share. Total revenues of $21.96 billion missed the Zacks Consensus Estimate of $24.07 billion. The stock price of Bank of America Corporation fell 1.1%.
Although both banks exceeded expectations for adjusted earnings, their revenues fell short, which influenced market sentiment.
The Producer Price Index (PPI) released by the U.S. Labor Department for December indicates a decrease of 0.1%, suggesting a slowdown in inflation. The 1% increase in 2023 compared to the surge of 6.4% seen in 2022 highlights changes in the landscape.
The drop in the overall headline PPI was mostly due to the cost of goods declining by 0.4% in December. The decline in the cost of goods was primarily triggered by a fall in both energy and food prices. Diesel fuel prices decreased by 12.4%, while gasoline prices increased by 2.1%. The index for final demand services were flat overall in December. Within the index for final demand services, prices for investment advice increased 3.3%, while margins for vehicle wholesaling decreased 5.5%.
Considering these indicators of decreasing inflation, markets are now speculating interest rate cuts, by the Federal Reserve, which are scheduled for March.
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Stock Market News for Jan 16, 2024
Market News
Benchmarks finished mixed on Friday as investors digested discouraging fourth-quarter bank earnings that offset a drop in wholesale prices, which raised hopes of interest rate cuts this year. While the 30-stock Dow ended in the red, the S&P 500 and the Nasdaq somehow managed to finish in the positive territory. For the week, however, all the major bourses closed in the green. The stock market was closed on Monday for Martin Luther King, Jr. Day.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) declined 0.3% or 118.04 points to close at 37,592.98. Notably, 15 components of the 30-stock index ended in positive territory, while 15 ended in negative zone.
The tech-heavy Nasdaq Composite finished at 14,972.76, rising 0.02% due to the strong performance of large-cap technology stocks. The major gainer of the Nasdaq Composite was MercadoLibre, Inc. (MELI - Free Report) , after jumping 4.2%. MercadoLibre currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The S&P 500 gained 0.1% to finish at 4,783.83. Out of 11 broad sectors of the benchmark, seven ended in positive territory, while four finished in red. The Energy Select Sector SPDR (XLE), the Real Estate Select Sector SPDR (XLRE) and the Utilities Select Sector SPDR (XLU) rose 1.1%, 0.8% and 0.6%, respectively, while the Consumer Discretionary Select Sector SPDR (XLY) declined 1.2%.
The fear-gauge CBOE Volatility Index (VIX) increased 2.1% to 12.70. A total of 10.57 billion shares were traded on Friday, lower than the last 20-session average of 12.06 billion. The S&P 500 posted 37 new 52-week highs and no new lows; the Nasdaq Composite recorded 134 new highs and 86 new lows.
Bank Earnings, PPI, and Fed Expectations
The recent financial reports, from Citigroup Inc. (C - Free Report) and Bank of America Corporation (BAC - Free Report) present an outlook for the financial sector.
Citigroup Inc. (C - Free Report) reported fourth-quarter fiscal 2023 adjusted earnings of $0.84 per share, which surpassed the Zacks Consensus Estimate of $0.73 per share. The bank retailer generated total revenues of $17.44 billion, which lagged the Zacks Consensus Estimate of $18.66 billion. The stock price of Citigroup rose 1%.
Bank of America Corporation (BAC - Free Report) reported fourth-quarter fiscal 2023 adjusted earnings per share of $0.70, which surpassed the Zacks Consensus Estimate of $0.6 per share. Total revenues of $21.96 billion missed the Zacks Consensus Estimate of $24.07 billion. The stock price of Bank of America Corporation fell 1.1%.
Although both banks exceeded expectations for adjusted earnings, their revenues fell short, which influenced market sentiment.
The Producer Price Index (PPI) released by the U.S. Labor Department for December indicates a decrease of 0.1%, suggesting a slowdown in inflation. The 1% increase in 2023 compared to the surge of 6.4% seen in 2022 highlights changes in the landscape.
The drop in the overall headline PPI was mostly due to the cost of goods declining by 0.4% in December. The decline in the cost of goods was primarily triggered by a fall in both energy and food prices. Diesel fuel prices decreased by 12.4%, while gasoline prices increased by 2.1%. The index for final demand services were flat overall in December. Within the index for final demand services, prices for investment advice increased 3.3%, while margins for vehicle wholesaling decreased 5.5%.
Considering these indicators of decreasing inflation, markets are now speculating interest rate cuts, by the Federal Reserve, which are scheduled for March.