Benchmarks ended higher on Tuesday, with the Nasdaq touching a record high after gains in health-care stocks offset losses in energy shares. While upbeat outlook from UnitedHealth boosted health insurers, sharp drop in oil prices had a negative impact on the broader energy sector. Oil prices took a beating on signs that leading oil exporters are struggling to agree on a deal to trim production levels ahead of the OPEC meeting scheduled on Nov 30. The U.S. economy, meantime, expanded in the third quarter for its best performance in almost two years, which eventually boosted investor sentiment.
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) increased 0.1%, to close at 19,121.60. The S&P 500 also advanced 0.1% to close at 2,204.66. Meanwhile, the tech-laden Nasdaq Composite Index closed at 5,379.92, gaining 0.2%. The tech-laden index had touched an intraday trading high of 5,403.86 earlier. The fear-gauge CBOE Volatility Index (VIX) declined 4.1% to settle at 12.61. A total of around 6.7 billion shares were traded on Tuesday, lower than the last 20-session average of 7.8 billion shares. Advancers marginally outpaced declining stocks on the NYSE. For 50% stocks that declined, 47% advanced.
Healthcare Stocks Gain
Following better-than-expected third-quarter results, UnitedHealth Group Inc (UNH - Free Report) projected revenues to exceed $184 billion, with net earnings of approximately $7.45 per share and adjusted net earnings of approximately $8.00 per share. Following better-than-expected third-quarter results, net earnings and adjusted earnings projections were raised from the range of $7.25–$7.40 and $7.80–$7.95, respectively.
UnitedHealth also issued guidance for 2017. It expects revenues in the range of $197 billion to $199 billion, net earnings of $8.75 to $9.05 per share, and adjusted net earnings of $9.30 to $9.60 per share. Investors took the news positively, with shares of the company gaining 3.6% (read more: UnitedHealth Keeps '16 Guidance, Issues '17 View; Stock Up).
Other insurers also gained, including Aetna (AET - Free Report) , up 2.8%, while the broader Health Care Select Sector SPDR (XLV) increased 0.7%.
Energy Shares Dip
Signs that leading oil exporters in the Organization of the Petroleum Exporting Countries (OPEC) were struggling to agree on a deal to cut production to reduce global oversupply dragged oil prices down. OPEC will meet on Nov 30 to implement a deal outlined in September to trim production by around 1 million barrels per day (bpd) from about 33.82 million bpd in October. WTI and Brent crude plunged 4.1% and 4% to $45.23 per barrel and $46.38 a barrel, respectively.
Decline in oil prices weighed on energy shares. The Energy Select Sector SPDR (XLE) fell 1.2%, while Dow components Exxon Mobil Corporation (XOM - Free Report) and Chevron Corporation (CVX - Free Report) declined 0.7% and 1.1%, respectively. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Economic Data Encouraging
According to the Commerce Department’s second estimate, GDP increased by 3.2% in the third quarter. This is a considerable improvement over the advance estimate of 2.9% and higher than the expected pace of 3%. In the second quarter, GDP increased by 1.4%. Consumer expenditure, the powerhouse of GDP growth, increased by 2.8% during the third quarter. This was significantly higher than the pace of 2.1% estimated earlier.
Consumer Confidence Index increased from October to 107.1 this month, hitting its highest level since Jul 2007, according to the Conference Board. Moreover, the reading for last month was revised upward from 98.6 to 100.8. The Present Situation Index and Expectations Index also rose 7.2 and 5.7 points from last month to 130.3 and 91.7 in November, respectively.
Stocks That Made Headlines
Pilgrim's Pride to Buy GNP Company, Boost Performance
Pilgrim's Pride Corporation (PPC - Free Report) recently inked a definitive agreement to acquire renowned branded chicken products provider in the Upper Midwest – GNP Company. (Read More)
Ford & Other Automakers to Form European Charging Network
Ford Motor Company (F - Free Report) announced that it is teaming up with BMW AG (BAMXF - Free Report) , Daimler AG (DDAIF - Free Report) and Volkswagen AG (VLKAY - Free Report) (including Audi and Porsche) to set up an electric charging network in Europe based on Combined Charging System standard technology. (Read More)
Autodesk Q3 Loss Wider than Expected, Stock Down
Autodesk Inc. (ADSK - Free Report) reported third-quarter fiscal 2017 adjusted loss (including stock-based compensation expense but excluding all other non-recurring items) of 43 cents a share, wider than the Zacks Consensus Estimate of a loss of 42 cents. (Read More)
Now See Our Private Investment Ideas
While the above ideas are being shared with the public, other trades are hidden from everyone but selected members. Would you like to peek behind the curtain and view them? Starting today, for the next month, you can follow all Zacks' private buys and sells in real time from value to momentum . . . from stocks under $10 to ETF and option moves . . . from insider trades to companies that are about to report positive earnings surprises (we've called them with 80%+ accuracy). You can even look inside portfolios so exclusive that they are normally closed to new investors. Click here for Zacks' secret trades >>