News related to former U.S national security adviser Michael Flynn raised market uncertainty on Friday, which led the benchmarks to finish in the red. Flynn pleaded guilty to lying to the FBI regarding his interaction with the Russians and promised full cooperation to the investigating team. However, some of Friday’s losses were curbed following news that the U.S. Senate Republicans showed signs of passing the tax cut bill. For the week, the Dow and S&P 500 closed in positive territory, while the Nasdaq ended downward.
The Dow Jones Industrial Average (DJIA) decreased 0.2%, to close at 24,231.59. The S&P 500 Index (INX) fell 0.2% to close at 2,642.22. The tech-laden Nasdaq Composite Index (IXIC) closed at 6,847.59, losing 0.4%. A total of 8.2 billion shares were traded on Friday, higher than the last 20-session average of 6.6 billion shares. Advancers outnumbered decliners on the NYSE by a 1.02-to-1 ratio. On Nasdaq, a 1.54-to-1 ratio favored declining issues. The CBOE VIX decreased 2% to close at 11.05.
Flynn Testimony, Tax Cut Bill In Focus
According to ABC News, Trump’s former national security adviser Flynn accepted that he lied about his contact with individuals from Russia to the FBI. Flynn later confirmed that he “will fully cooperate” with the investigation team and was ready to testify that Donald Trump "directed him to make contact with the Russians," during last year’s U.S. Presidential election. In an updated ABC report, Flynn said that he was asked by Trump to contact the Russians "initially as a way to work together to fight ISIS in Syria."
Following such uncertainty, all the key U.S. indexes fell significantly. However, markets managed to recoup some of Friday’s declines folllowing news that U.S. Senate Republicans won a vote 51 to 49 to pass the tax overhaul bill in the Senate.
Energy Sector Rallies Up
Despite the considerable decline in the broader markets, the energy sector managed to close in the green following increase in oil prices. All the major OPEC and non-OPEC oil producing nations decided to extend output controls till the end of next year. Following these developments, WTI crude rose 1.6% to close at $58.36 a barrel.
Increase in oil prices boosted the Energy Select Sector SPDR (XLE) to advance 0.8%, becoming the best performing sector of the S&P 500. One of its key components, Chevron Corporation (CVX - Free Report) rose 0.4%. The company has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
For the week, the Dow and S&P 500 rose 2.9% and 1.5%, respectively, but the tech-based index Nasdaq fell 0.6%. The Dow posted its best weekly increase since December 2016, while the S&P 500 posted its best weekly rise since this September. Meanwhile, the Nasdaq registered its biggest weekly fall since Sept 8.
During the week, Dow breached a fresh all time high to surge past the psychological 24,000 milestone following rising optimism about the prospects of tax reforms after Senator McCain promised his support for the tax cut Bill.
Further, Jerome Powell’s comments that he would follow Yellen’s path in terms of monetary policies also boosted investor sentiment. Also, key economic data like GDP registered highest growth rate since 2014, while consumer confidence hits a 17-year high. However, Flynn-related report on Friday raised market uncertainty and restricted some of the week’s gains.
Stocks That Made Headlines
ExxonMobil to Merge Refining & Marketing Divisions
ExxonMobil Corporation (XOM - Free Report) plans to merge its two separate business units into ExxonMobil Fuels & Lubricants Company. (Read More)
Deere Reinforces Construction Business with Wirtgen Buy
Deere & Company (DE - Free Report) has concluded the previously announced acquisition of world’s leading road-construction equipment maker, Wirtgen. (Read More)
ARRIS Closes Ruckus Wireless Buyout From Broadcom
ARRIS International plc (ARRS - Free Report) has recently completed the previously announced acquisition of Ruckus Wireless and ICX Switch Business from Broadcom. (Read More)
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