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Swarup Gupta

Dow 30 Stock Roundup: Chevron Produces First Gas from Alder Field, IBM Partners with Topcoder

IBM JPM CVX INTC V COP FB

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The Dow gained substantially during a week dominated by the U.S. presidential election. Initially, investors were buoyed by news that the FBI was sticking to its earlier recommendation on Hillary Clinton’s personal emails. Initially, investors reacted unfavorably to Donald Trump’s surprise victory. However, markets ultimately came to terms with this verdict and gained following expectations of a more favorable business environment.

Last Week’s Performance

The Dow decreased 0.2% on Friday as investors fretted over the results of the presidential elections. Such concerns compelled them to remain on the sidelines or park investments in risk-averse assets such as gold and short-term duration bonds. Director James Comey told lawmakers on Sunday that no charges would be brought against Hillary Clinton after the new email review.

The latest opinion polls on Sunday, before news broke of the FBI announcement, gave Clinton a meager four to five-point lead over Republican candidate Donald Trump. The U.S. economy added 161,000 jobs in October, while the unemployment rate fell to 4.9% from 5%.

The index declined 1.5% over last week. While uncertainty over the upcoming presidential election dragged the major indexes lower, the Federal Reserve’s indication that it may hike rates in December weighed on investors’ sentiment. Facebook, Inc.’s (FB - Free Report) warning that it’s potential for ad revenues will start slowing soon also adversely impacted investors’ confidence.

The Dow This Week

The index advanced 2.1% on Monday after the FBI said that it would not press criminal charges against Democratic nominee Hillary Clinton. Financial markets in general believed that a Clinton win was the better outcome in the presidential election, as it presents more stability for markets than a Trump presidency. The Dow reclaimed the key 18,000 level, posting its biggest one-day percentage gain since March.

The FBI said that no new evidence was found to warrant charges against Clinton, a sign of relief among investors who see the chances of a Trump presidency failing. While a number of polls and prognosticators indicated Clinton was ahead of Trump, one indicator bucked the trend. Per the S&P 500, Trump had an 86% chance of winning the election.

The index gained 0.4% on Tuesday as investors eagerly awaited the results of a closely fought presidential election. Investors were betting on a victory for Hillary Clinton, as it represents more stability for markets than a Trump presidency. Trump’s stances on foreign policy, trade and immigration are less certain.

According to the final Reuters/Ipsos States of the Nation project, Clinton had a whopping 90% chance of making it to the White House. The Real Clear Politics Average of national polls also showed Clinton leading Trump by 2.2%, a much slimmer margin. Meanwhile, the NBC News/Wall Street Journal gave a point lead to Clinton over Trump. The Washington Post/ABC tracking poll had also awarded Clinton with a five-point lead.

The index advanced 0.4% on Wednesday as investors embraced the election of Republican Donald Trump as the president of the United States. Stocks made a dramatic turnaround from deep overnight losses as investors snapped up infrastructure, healthcare and financial stocks, while they dumped safe-haven assets including bonds.

Trump’s willingness to spend more on America’s roads and bridges boosted construction stocks, while his promise to repeal Obamacare and free up cash currently held overseas for tax reasons helped biotech stocks gain traction. A forthcoming bonanza of deregulation and tax cuts had a positive impact on financials.

The index gained 1.2% on Thursday as investors scooped up shares of large banks. The U.S. banking sector soared to levels not seen since the midst of 2008 financial crisis. A possible move towards lighter regulation and increase in fiscal spending helped banks gain traction. 

Pharmaceutical stocks also gained on the prospect that a Trump administration will be less restrictive on drug pricing than Clinton. However, some of the world’s largest tech companies tanked as investors continue to adjust for Trump’s upset victory in the presidential election.

Components Moving the Index

Chevron Corporation (CVX - Free Report) , the second-largest U.S. oil producer, yielded first gas from Alder field – a gas condensate field in the Central North Sea. The Alder project is an initiative by Chevron North Sea Limited and leading integrated energy player ConocoPhillips (COP - Free Report) . Zacks Rank #3 (Hold) rated Chevron's subsidiary – Chevron North Sea – is the operator of the field with a 73.7% interest in the project. The remaining 26.3% is held by ConocoPhillips.

The field is forecast to have a capacity of 110 million cubic feet per day of natural gas and 14,000 barrels per day of liquid condensate. All the production from this field – located about 100 miles off of Scotland – will be sent to the ConocoPhillips operated Britannia platform via a 17 mile pipeline. (Read: Chevron Corporation (CVX - Free Report) Produces First Gas from Alder)

Intel Corporation (INTC - Free Report) has reportedly purchased Voke, a privately held virtual reality (VR) startup that offers personalized and immersive viewing experiences of live events. The financial terms of the deal were not disclosed. Intel has a Zacks Rank #2 (Buy).

Voke’s TrueVR is a real-time, end-to-end technology platform that offers high quality 360 VR experience in full stereoscopic 3D video captured with a special stereoscopic camera. This technology is a step ahead of virtual reality that puts users in a virtual space.

The platform is compatible with a range of devices such as PCs, smartphones, tablets and VR headsets and is offered through various distribution channels and apps. Voke is likely to be absorbed into Intel Sports Group. (Read:  Intel (INTC - Free Report) Eyes Immersive Sports with Voke Acquisition)

JPMorgan Chase & Co. (JPM - Free Report) announced that it is about to stop offering fee-based retirement accounts to its clients. This is in compliance with the U.S. Labor Departments’ new fiduciary rule, to come into effect from April next year.

Per the new rule, all financial advisors are required to act as fiduciaries to their clients while giving investment advice, and managing their client’s retirement accounts.

It aims to bridge the gap between brokers and Registered Investment Advisors (RIAs). Earlier, only RIAs acted as fiduciaries to their clients. Brokers only acted as middlemen, providing education to their clients regarding their investments, but not advice. The stock has a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Visa Inc.’s (V - Free Report) wholly-owned subsidiary CyberSource, recently joined forces with Joint Electronic Teller Services Limited ("JETCO") to establish the most comprehensive payment gateway services for residents in Hong Kong. Visa has a Zacks Rank #3.

Alongside individual customers, businesses and merchants of Hong Kong would largely benefit from this partnership as it ensures more convenience, ease and better choice in payment solutions. The financial institutions in Hong Kong and Macau that intend to expand their merchant acquiring businesses for online merchants would also gain from the alliance as it extends the latest popular payment options such as Visa Checkout and in-app purchase. (Read: Visa (V - Free Report) Unit Joins Forces with JETCO to Boost eCommerce)

IBM Corporation (IBM - Free Report) has partnered with Topcoder, a global software development community to make its Watson and IBM Cloud services available to more than one million of technology and design experts included in the Topcoder community. IBM has a Zacks Rank #3.

Topcoder conducts online competitive programming competitions called “single round matches” or SRMs fortnightly as well as weekly graphic design and development competitions.

With the partnership, participants of Topcoder-run hackathons and coding competitions can use Watson services such as Sentiment Analysis, Conversation and Speech Application Program Interfaces (API) to develop powerful artificial intelligence and cognitive computing tools. (Read: IBM's Watson & Cloud Now Available to Topcoder Community)

Performance of the Top 10 Dow Companies

The table given below shows the price movements of the 10 largest components of the Dow, which is a price weighted index, over the last five days and during the last six months. Over the last five trading days, the Dow has gained nearly 5%.

Ticker

Last 5 Day’s Performance

6-Month Performance

MMM

+4.5%

+2.7%

GS

+13.7%

+26%

IBM

+5%

+7.6%

HD

+7.5%

-3.9%

BA

+5.5%

+11.1%

UNH

+6.5%

+11.8%

MCD

+2.7%

-11.3%

TRV

+3.9%

-2.1%

JNJ

+4.1%

+4.5%

AAPL

-2.1%

+16.5%

Next Week’s Outlook

With apprehensions over the outcome over the presidential elections and its shock results receding, investors can now focus on President Trump’s likely policies. It is being widely expected that Trump’s presidency will be more business friendly. Regulations are likely to be loosened and new avenues of growth are likely to open up.

On the other hand, it is likely that certain companies, especially those in the manufacturing sector with overseas operations could bear the brunt of new policies. New policy announcements and expectations surrounding the same will determine market movements in the days ahead.

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