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Stock Market News for April 13, 2017

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Benchmarks finished in the red on Wednesday as investors remained worried about rising geopolitical concerns including U.S. strike on a Syrian air base last week and escalating tension between U.S. and North Korea. The rise in geopolitical tensions led S&P 500 and Dow industrials to finish below their 50-day moving averages for the first time since November. The market’s fear gauge touched a five-month high. Investors kept close watch on the Presidential election in France.

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) declined 0.3% to close at 20,591.86. The S&P 500 fell 0.4% to close at 2,344.93. The tech-laden Nasdaq Composite Index closed at 5,836.16, declining 0.5%. The fear-gauge CBOE Volatility Index (VIX) rose 5.5% to 15.90, its highest level since early November.  A total of around 3.2 billion shares were traded in NYSE on Wednesday. Decliners outpaced advancing stocks on the NYSE. For 66% stocks that declined, 30% advanced.     

Geopolitical Concerns

Investors remained cautious on persistent geopolitical tensions following the meeting between U.S. and Russian foreign secretaries in Moscow on Wednesday. White House officials alleged Russia of trying to cover up the ghastly Syrian chemical attack last week. The U.S. concluded that the Syrian military applied banned sarin gas in the attack that had inflicted severe casualty on many civilians.However, Sergei Lavrov commented that Russia wasn’t convinced about a chemical attack in Syria which in turn is expected to increase tensions between U.S. and Russia.   

Investors fear that North Korea may conduct another nuclear test to mark the anniversary of the birth of the country’s founder on Apr 15. Trump had said that U.S. is ready to take unilateral action against North Korea in case China does not offer assistance in this regard. Last Sunday, U.S. Navy strike group headed toward the North Korean Peninsula in a show of force.  North Korea warned U.S. of a possible nuclear attack in case U.S continues to make military moves against her.

Investors remained focused on the Presidential election in France scheduled to be held on April 23rd. Investors kept a close watch on the electoral outcome where left wing candidate Jean-Luc Melenchon is in the race for the presidency. The recent rise in popularity of Melenchon, who is a euro skeptic, has unnerved investors with many expressing concern over a possible “Frexit. Frexit will spark more turmoil than Brexit as France is considered to be an integral part of both the Eurozone and the European Union.

Flight to Safe Havens 

Utilities, consumer staples and telecom services gained from the rise in geopolitical tensions. The Utilities Select Sector SPDR (XLU) rose 0.7% and was the biggest advancer among the S&P 500 sectors. Some of its key holdings, including NextEra Energy Inc (NEE - Free Report) and Duke Energy Corp (DUK - Free Report) gained 0.9% and 0.7% respectively. The Consumer Staples Select Sector SPDR (XLP) gained 0.4%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Trump’s Comments Impact Dollar

Trump’s comment on dollar valuation made an adverse impact on the value of dollar on Wednesday. The dollar fell after Trump said in an interview that he felt the value of dollar is getting higher day by day. The dollar index last traded 0.5% lower at 100.23, hitting its lowest level of the month.

Stocks that made Headlines

Shaw Communications Q2 Earnings In Line, Revenues Lag

Shaw Communications Inc. reported mixed financial results for the second quarter of fiscal 2017 (ended Feb 28, 2017) wherein the bottom line matched the Zacks Consensus Estimate while the top line missed the same. (Read More)

JetBlue Airways  Down on Bearish Q1 RASM View

Shares of Long Island City, NY-based carrier, JetBlue Airways Corporation (JBLU - Free Report) lost considerably following its announcement of a revised RASMguidance forfirst-quarter 2017. (Read More)

United to Refund 3411 Flight Passengers for Fiasco

The horrific incident on flight 3411 at Chicago’s O’Hare International Airport continues to haunt United Airlines, the wholly owned subsidiary of United Continental Holdings (UAL - Free Report) . (Read More)

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