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Benchmarks barely managed to finish in the green on Tuesday after investor remained cautious ahead of a meeting between President Donald Trump and his Chinese counterpart Xi Jinping. Energy shares rose following a rise in oil prices on expectations of lower U.S. crude inventories and hopes that OPEC led output cut would have a positive impact in the near future. Investors remained focused on upcoming quarterly results and Friday’s nonfarm payrolls data in order to determine whether current lofty equity valuations are justified. Trump’s comments on higher infrastructure pending and Dodd-Frank banking regulation helped industrial and material stocks end higher.
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) gained 0.2% to close at 20,689.24. The S&P 500 rose 0.1% to close at 2,360.16. The tech-laden Nasdaq Composite Index, meantime, closed at 5,898.61, gaining 0.1%. The fear-gauge CBOE Volatility Index (VIX) declined 4.8% to settle at 11.79. A total of around 3.2 billion shares were traded in NYSE on Tuesday. Advancers outpaced declining stocks on the NYSE. For 48% stocks that advanced, 47% declined.
US-China summit
Investors remained focused on the upcoming meeting between President Trump and his Chinese counterpart Xi Jinping set for the end of the week. During his election campaign, Trump accused China of dumping exports and of devaluing its currency. Trump also hinted that his administration would bring trade cases against China in U.S. courts and at the World Trade Organization. All these issues added to the expectations around the meeting, one which investors are keeping their eye on. For the first two days, trade is expected to be one of the major topics for the meeting where Trump is expected to renegotiate crucial trade deals with China.
Employment Data
Investors keenly awaited upcoming quarterly results and employment data due on Friday, as the U.S. employment report has a significant impact on the Fed outlook for monetary policy. Fed raised key interest rates for the first time in March and has intended to increase it two times further this year. Labor market data is important for investors to judge Fed’s decision on rate hike. So, investors remained focus on the employment data.
Oil prices gain
Oil prices reached to its near one-month high on Tuesday on expectations of a decline in U.S. crude and product inventories. WTI crude prices gained by 1.6% to $51.01 a barrel. Investors are anticipating an output cut from Organization of the Petroleum Exporting Countries (OPEC) and other producers which led to expectations of a decline in crude inventories. A strong increase in refinery utilization rates in past few weeks along with high compliance has also led to expectations that Energy Information Administration’s (EIA) weekly inventory data will show a decline. Meanwhile, production of crude oil from Britain's Buzzard field was stalled temporarily which put pressure on supply in the global market. Rising fuel demand in the U.S. and falling product inventories in turn is expected to make a positive impact on Energy shares.
U.S. trade deficit fell 10% to $43.6 billion in February, beating consensus estimates of $45.1 billion. Exports increased 0.2% to $192.9 billion, its highest since December 2014. Meanwhile, imports declined 1.8% in February to $236.4 billion. The fall in trade deficit is attributable to increase in exports to a 26-month high and a decline in imports of automobiles and cell phones. Increase in exports was helped by a fall in the value of the dollar, making U.S. goods cheaper to buy.
Meanwhile, factory orders increased 1% in February from the previous period, exceeding expectations of a 0.9% increase. However, the increase was lower than the previous month’s gain of 1.5%.
Leading apparel, footwear and accessories company V.F. Corporation (VFC - Free Report) recently signed a deal to divest its Licensed Sports Group (LSG) business to Fanatics Inc., which is a leading name for officially licensed sports merchandise. (Read More)
JetBlue Airways Corp. (JBLU - Free Report) plans to expand its premium service offering, Mint, in the east and west coast markets where customers have limited choice and other airline players sell dated business class options at a high cost. (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 >>
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Stock Market News for April 05, 2017
Benchmarks barely managed to finish in the green on Tuesday after investor remained cautious ahead of a meeting between President Donald Trump and his Chinese counterpart Xi Jinping. Energy shares rose following a rise in oil prices on expectations of lower U.S. crude inventories and hopes that OPEC led output cut would have a positive impact in the near future. Investors remained focused on upcoming quarterly results and Friday’s nonfarm payrolls data in order to determine whether current lofty equity valuations are justified. Trump’s comments on higher infrastructure pending and Dodd-Frank banking regulation helped industrial and material stocks end higher.
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) gained 0.2% to close at 20,689.24. The S&P 500 rose 0.1% to close at 2,360.16. The tech-laden Nasdaq Composite Index, meantime, closed at 5,898.61, gaining 0.1%. The fear-gauge CBOE Volatility Index (VIX) declined 4.8% to settle at 11.79. A total of around 3.2 billion shares were traded in NYSE on Tuesday. Advancers outpaced declining stocks on the NYSE. For 48% stocks that advanced, 47% declined.
US-China summit
Investors remained focused on the upcoming meeting between President Trump and his Chinese counterpart Xi Jinping set for the end of the week. During his election campaign, Trump accused China of dumping exports and of devaluing its currency. Trump also hinted that his administration would bring trade cases against China in U.S. courts and at the World Trade Organization. All these issues added to the expectations around the meeting, one which investors are keeping their eye on. For the first two days, trade is expected to be one of the major topics for the meeting where Trump is expected to renegotiate crucial trade deals with China.
Employment Data
Investors keenly awaited upcoming quarterly results and employment data due on Friday, as the U.S. employment report has a significant impact on the Fed outlook for monetary policy. Fed raised key interest rates for the first time in March and has intended to increase it two times further this year. Labor market data is important for investors to judge Fed’s decision on rate hike. So, investors remained focus on the employment data.
Oil prices gain
Oil prices reached to its near one-month high on Tuesday on expectations of a decline in U.S. crude and product inventories. WTI crude prices gained by 1.6% to $51.01 a barrel. Investors are anticipating an output cut from Organization of the Petroleum Exporting Countries (OPEC) and other producers which led to expectations of a decline in crude inventories. A strong increase in refinery utilization rates in past few weeks along with high compliance has also led to expectations that Energy Information Administration’s (EIA) weekly inventory data will show a decline. Meanwhile, production of crude oil from Britain's Buzzard field was stalled temporarily which put pressure on supply in the global market. Rising fuel demand in the U.S. and falling product inventories in turn is expected to make a positive impact on Energy shares.
The Energy Select Sector SPDR (XLE) rose 0.7% and was the biggest advancer among the S&P 500 sectors. Some of its key holding, including Halliburton Company (HAL - Free Report) and EOG Resources (EOG - Free Report) gained by 0.6% and 1.3% respectively. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Economic Data
U.S. trade deficit fell 10% to $43.6 billion in February, beating consensus estimates of $45.1 billion. Exports increased 0.2% to $192.9 billion, its highest since December 2014. Meanwhile, imports declined 1.8% in February to $236.4 billion. The fall in trade deficit is attributable to increase in exports to a 26-month high and a decline in imports of automobiles and cell phones. Increase in exports was helped by a fall in the value of the dollar, making U.S. goods cheaper to buy.
Meanwhile, factory orders increased 1% in February from the previous period, exceeding expectations of a 0.9% increase. However, the increase was lower than the previous month’s gain of 1.5%.
Stocks that made Headlines
V.F. Corp Inks Deal to Divest LSG Unit to Fanatics
Leading apparel, footwear and accessories company V.F. Corporation (VFC - Free Report) recently signed a deal to divest its Licensed Sports Group (LSG) business to Fanatics Inc., which is a leading name for officially licensed sports merchandise. (Read More)
JetBlue Plans to Expand Mint Service as Demand Shoots Up
JetBlue Airways Corp. (JBLU - Free Report) plans to expand its premium service offering, Mint, in the east and west coast markets where customers have limited choice and other airline players sell dated business class options at a high cost. (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 >>