The Dow closed at an all-time high for a twelfth straight session on Monday, posting its longest such streak since 1987. Both the blue-chip index and S&P 500 settled at all-time high levels, while the Nasdaq closed a few points short of a record. Investors waited for clues ahead of Trump’s speech before a joint Congress session Tuesday night, which in turn led the key indexes to close in the green. President Trump is expected to come up with new healthcare and tax reforms and increase infrastructure spending.
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 20,837.44. The S&P 500 also rose 0.1% to close at 2,369.73. The tech-laden Nasdaq Composite Index closed at 5,861.90, gaining 0.3%. The fear-gauge CBOE Volatility Index (VIX) advanced 5.4% to settle at 12.09. A total of around 6.9 billion shares were traded on Monday higher than the last 20-session average of 6.8 billion shares. Advancers outpaced declining stocks on the NYSE. For 58% stocks that advanced, 38% declined.
What Boosted The Benchmarks?
In a meeting with governors in White House, Trump said that he will "make the government lean and accountable." Trump will not only encourage "big" infrastructure spending, but has also called for a "historic" increase in spending to rebuild the country’s “depleted military” at a time it is required the most.
Additionally, Trump will seek a $54 billion hike in spending on tanks, ships and weapons systems and will trim other priorities. The defense budget will climb by 10%, according to the White House, while Trump also recommended $30 billion in supplementary military spending for this year. Optimism over higher infrastructure and defense spending led the broader Industrial Select Sector SPDR (XLI) to advance 0.4%.
Further, Trump is expected to introduce new healthcare and tax reforms. Positive sentiments over new healthcare and tax reforms led both the Health Care Select Sector SPDR (XLV) and Financial Select Sector SPDR (XLF) to increase 0.5%.
Moreover, Russia’s Energy Minister Alexander Novak said yesterday that the nation’s total crude output will be lower this month as compared to last month. Russia has already reduced its crude production by more than 117,000 bpd in January. Russia’s attempt to curtail its overall crude output boosted oil prices. Both WTI and Brent crude fell 0.9% and 1.1% to $53.99 per barrel and $55.99 a barrel, respectively.
Decline in oil prices led the Energy Select Sector SPDR (XLE) to increase 0.9% and emerge as the best performing sector in the S&P 500. Some of its key holdings, including Chevron Corporation ( (CVX - Free Report) and Exxon Mobil Corporation (XOM - Free Report) soared 1.5% and 0.6%, respectively. Both the Dow component possess a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here .
In economic news, durable orders increased by 1.8%, in line with the consensus estimate. Durable goods orders increased last month after two straight months of declines. The metric increased after orders for military planes and commercial jets increased.
However, the National Association of Realtors reported that Pending Home Sales Index dropped 2.8% from December to 106.4 last month, reaching the lowest level since last January.
Stocks That Made Headlines
Frontier Communications Q4 Loss Wider than Expected
Frontier Communications Corp. ( (FTR - Free Report) reported disappointing financial results in the fourth quarter of 2016. ( Read More )
FEMSA Earnings Miss, Revenues Beat Estimates in Q4
Fomento Economico Mexicano S.A.B. de C.V. ( (FMX - Free Report) , alias FEMSA, posted fourth-quarter 2016 net majority income, which lagged the Zacks Consensus Estimate. ( Read More )
Hertz Loss Wider than Expected, Revenues Miss in Q4
Hertz Global Holdings Inc. ( (HTZ - Free Report) released dismal fourth-quarter 2016 results, wherein the company suffered a loss alongside posting soft revenues. ( Read More )
Cable ONE Q4 Earnings Miss, Revenues Beat Estimates
Small-sized cable MSO (multi service operator) Cable ONE Inc. ( (CABO - Free Report) reported mixed financial results in the fourth quarter of 2016. ( Read More )
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