Benchmarks yet again closed at record highs on Monday, boosted by gains in financial and tech shares. Bank of America’s stellar performance boosted financial stocks, while tech stocks were led by a deal between SoftBank Group and ARM Holdings. The Dow and the S&P 500 eked out small gains, enough to help the indexes close at all-time highs. The Nasdaq, on the other hand, finished at its highest level for the year.
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The Dow Jones Industrial Average (DJI) increased almost 0.1% to close at 18,533.05. The S&P 500 gained 0.2% to close at 2,166.89. The tech-laden Nasdaq Composite Index closed at 5,055.78, advancing 0.5%. The fear-gauge CBOE Volatility Index (VIX) went up 0.7% to settle at 12.76. About 5.6 billion U.S. shares changed hands on Monday, less than the year-to-date daily average of 7.6 billion. Monday’s trading volume turned out to be the third lowest of any trading session this year. Advancers outpaced declining stocks on the NYSE. For 62% stocks that advanced, 35% declined.
Bank of America Corp’s (BAC - Free Report) upbeat second quarter earnings performance boosted investors’ sentiment. Bank of America posted earnings of 36 cents per share, which beat the Zacks Consensus Estimate of 34 cents. Revenues of $20.4 billion were, however, marginally below the Zacks Consensus Estimate of $20.5 billion. Shares of Bank of America jumped 3.3%, which perhaps reflect improvement in fixed income trading revenues and efficient cost control.
Bank of America’s promising performance followed a solid batch of earnings results from major banks last week. While JPMorgan Chase & Co (JPM - Free Report) and Citigroup Inc’s (C - Free Report) earnings had surpassed expectations, Wells Fargo & Co.’s (WFC - Free Report) results were more or less in-line with expectations. Upbeat earnings results helped bank stocks rally on Monday, with the Financial Services Select Sector SPDR (XLFS) gaining 0.8%, the highest among the S&P 500 sectors. Shares of Dow component, Goldman Sachs Group, Inc. (GS - Free Report) advanced 0.9%.
Among other notable earnings results, Hasbro Inc.’s (HAS - Free Report) second quarter earnings of 41 cents per share beat the Zacks Consensus Estimate of 39 cents. Net revenue of $878.9 million too surpassed the Zacks Consensus Estimate of $876 million. However, shares of Hasbro tanked 6.6% after the company reported a sharp slowdown in sales growth for its boys segment, while a large inventory buildup raised concerns as the toy maker nears the critical holiday season.
Japanese internet and telecommunications conglomerate SoftBank Group’s deal to buy British chip designer ARM Holdings plc buoyed the technology sector. SoftBank announced an all-cash offer of $32 billion to buy ARM Holdings. Shares of ARM Holdings surged 40.6%. Apple Inc. (AAPL - Free Report) one of ARM’s customers saw its shares advance 1.1%.
The Technology Select Sector SPDR (XLK) gained 0.7% and was the second biggest gainer among the S&P 500 sectors. Some of the major components including Facebook, Inc. (FB - Free Report) and International Business Machines Corporation (IBM - Free Report) increased 2.2% and 0.1%, respectively.
Oil prices fell yesterday after a steady rise in crude stockpiles intensified fears of another supply glut. At Cushing, Oklahoma U.S. crude witnessed a supply build of 26,460 barrels for the week ending July 15. Additionally, an attempted coup in Turkey barely had any influence in Istanbul's Bosphorus Strait as it reopened from a brief closure. Such a place is known for handling around 3% of global oil shipments.
The WTI crude and Brent crude decreased 1.6% and 1.4% to $45.24 per barrel and $46.96 a barrel, respectively. Shares of major Dow components, Chevron Corporation (CVX - Free Report) and Exxon Mobil Corporation (XOM - Free Report) declined 0.9% and 0.3%, respectively.