Benchmarks closed lower on Monday as investors booked profits on the heels of a record-setting week. A massive post-election rally eased, with financials and consumer discretionary shares lagging significantly. Oil prices, however, rose on expectations that OPEC may agree this week on a plan to curb crude output.
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) fell 0.3%, to close at 19,097.90. The S&P 500 declined 0.5% to close at 2,201.72. The tech-laden Nasdaq Composite Index closed at 5,368.81, decreasing 0.6%. The Russell 2000 index, meantime, of small-cap shares snapped its longest winning streak in 20 years. On Monday, the index declined 1.3%.
The fear-gauge CBOE Volatility Index (VIX) soared 5.5% to settle at 13.02. A total of around 6.52 billion shares were traded on Monday, lower than the last 20-session average of 7.84 billion shares. For 64% stocks that declined, 33% advanced.
Trump Rally Eases
Investors booked profits on Monday after a week-long rally that sent all three indexes to record highs. Indexes had closed higher as investors bet that President-elect Donald Trump’s economic proposals could improve growth. Investors had cheered his proposal to lower corporate taxes and increase infrastructure spending, while the broader market also benefitted from an exodus of cash from government bonds, real estates and gold.
The S&P 500 had notched its seventh record close since the U.S. presidential election on Nov. 8, while the Dow is up 4.5%. Last week, the blue-chip index shot up nearly 300 points, pulling it up 800 points since the election.
Trump administration had agreed to raise the minimum asset threshold for banking behemoths, while views the Dodd-Frank regulatory overhaul as a harsh measure, especially, on smaller banks. Trump plans to trim business tax rate to 15% from 35%, while he is in favor of beefing up public spending by hundreds of billions of dollars on infrastructure.
Financials and consumer discretionary shares were among the biggest decliners on Monday. The Financial Select Sector SPDR ETF (XLF) dropped 1.2% Key stocks from the sector including Bank of America Corporation (BAC - Free Report) , Wells Fargo & Company (WFC - Free Report) and Citigroup Inc. (C - Free Report) decreased 2.7%, 1.9% and 2.3%, respectively.
The Consumer Discretionary Select Sector SPDR (XLY) declined 0.8%. Key stocks from the sector including Comcast Corporation (CMCSA - Free Report) , Amazon.com Inc. (AMZN - Free Report) and NIKE, Inc. (NKE - Free Report) fell 1.2%, 1.7% and 0.9%, respectively. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Investors kept an eye on rise in oil prices ahead of a key Organization of the Petroleum Exporting Countries (OPEC) meeting. OPEC members are making a last-ditch effort to save the deal, while Saudi Arabia said it won’t meet with Russia and other non-cartel members. WTI and Brent crude rose 2.2% and 2.1% to $47.08 per barrel and $48.24 a barrel, respectively.
Stocks That Made Headlines
Envision & AMSURG Merger Okayed by Shareholders
Medical services provider, Envision Healthcare Holdings, Inc. (EVHC - Free Report) announced that its merger deal with physician and ambulatory services provider, AmSurg Corp. was approved by shareholders of both companies at separate special meetings held on Nov 28. (Read More)
UnitedHealth Keeps '16 Guidance, Issues '17 View; Stock Up
At its recent investors’ conference, UnitedHealth Group Inc. (UNH - Free Report) reiterated its 2016 guidance that was provided with the third-quarter earnings release. (Read More)
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