Benchmarks closed in negative territory on Monday after slump in oil prices weighed on energy stocks. Consumer discretionary sector also plummeted yesterday following declines in Dow component, McDonald. However, some of yesterday’s losses got curbed following upbeat earnings results from Bank of America. Meanwhile, investors digested comments from the Fed Vice Chairman Stanley Fischer.
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) decreased 0.3%, to close at 18,086.40. The S&P 500 also fell 0.3% to close at 2,126.50. Further, the tech-laden Nasdaq Composite Index closed at 5,199.82, losing 0.3%. The fear-gauge CBOE Volatility Index (VIX) increased 0.6% to settle at 16.21. A total of around 5.15 billion shares were traded on Monday, lower than the last 20-session average of 6.54 billion shares. Decliners outpaced advancing stocks on the NYSE. For 39% stocks that declined, 58% advanced.
WTI Crude Prices Settle below $50 per Barrel
As per Baker Hughes Inc’s (BHI - Analyst Report) weekly report, U.S. oil rig count increased from 428 to 432 for the week ended Oct 14, rising for 15 times over the last 16 weeks. Also, reports from International Energy Agency (IEA) and Organization of the Petroleum Exporting Countries (OPEC) showed that OPEC production in September rose by 33.64 million barrels and 33.39 million barrels, respectively.
Although, oil prices fell yesterday, some of its declines were curbed after the Energy Information Administration (EIA) projected that U.S. shale oil production may drop by 30,000 barrels a day next month. Both WTI and Brent crude fell 0.8% to $49.94 a barrel and $51.52 per barrel, respectively.
Slump in oil prices led the Energy Select Sector SPDR (XLE) to fall 0.5%, which emerged as one of the loser among the S&P 500 sectors. Some of its holdings including, Chesapeake Energy Corporation (CHK - Analyst Report) and Southwestern Energy Company ( (SWN - Analyst Report) plunged 3.2% and 3.3%, respectively. Both the two companies possess a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here .
Consumer Discretionary Biggest Decliner
Shares of McDonald's Corp. (MCD - Analyst Report) fell 1.5% on news that several senior executives will leave the company. McDonald's was the biggest loser among the Dow and led the broader Consumer Discretionary Select Sector SPDR (XLY) to fall 0.8%, which was the worst performer among the S&P 500 sectors.
BofA Posts Upbeat Earnings Results
Bank of America Corporation’s (BAC - Analyst Report) shares rose 0.3% after its third quarter earnings per share and revenues beat the Zacks Consensus Estimates. (Read More: BofA Beats on Q3 Earnings as Bond Trading Improves )
Look At Fed Vice-Chairman’s Comments
Fed Vice Chairman Stanley Fischer said that the Fed is "very close" to its inflation and employment targets. He also said that factors like an aging population and weak productivity are some of the major obstacles the Fed is facing regarding raising rates. He added that “it is not that simple” to raise interest rates mainly because of “changes in factors” over which the Fed has almost have no control like “technological innovation and demographics.”
Economic Data on Focus
On the economic front, industrial production rebounded in September. The Board of Governors of the Federal Reserve System reported that industrial production increased 0.1% in September, following a fall of 0.5% in August. Industrial production increased at an annual rate of 1.8% for the third quarter, its best in last one year. Also, capacity utilization advanced from 75.3% to 75.4% last month.
Stocks That Made Headlines
United Continental Beats on Q3 Earnings and Sales
United Continental Holdings Inc.’s (UAL - Analyst Report) third-quarter earnings (on an adjusted basis) and sales beat the Zacks Consensus Estimates. (Read More)
Rogers Communications Lags Q3 Earnings Estimates
Rogers Communications Inc. (RCI - Analyst Report) reported mixed financial results in the third quarter of 2016, wherein the bottom line missed the Zacks Consensus Estimate while the top line surpassed the same. ( Read More)
Kansas City Southern Q3 Earnings Miss, Decline Y/Y
Kansas City Southern (KSU - Analyst Report) reported third-quarter 2016 earnings (on an adjusted basis) that missed the Zacks Consensus Estimate and declined 7% year over year. ( Read More)
Constellation Brands Fuels Growth at Wine & Spirits
Constellation Brands Inc. (STZ - Analyst Report) has long been focused on expanding operations toward achieving business growth. (Read More)
Qualcomm Rolls Out World's First 5G Modem Snapdragon X50
Qualcomm Inc. (QCOM) is focusing on next big thing in mobile telecommunications standards, 5G or fifth generation technology. (Read More)
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