Benchmarks ended in the red on Tuesday after recent political tensions weighed on sentiment despite strong quarterly earnings results. Better-than-expected fourth-quarter earnings results and updated 2018 earnings projection from UnitedHealth led key U.S. indexes to reach new highs initially.
However, all the three indexes fell at the close with the Dow posting its biggest reversal in a day since Feb. 10, 2016 after briefly moving above the 26,000 mark for the first time. Additionally, oil prices fell after investors decided to lock in gains, which in turn weighed on the energy sector. Markets were closed on Monday due to Martin Luther King Jr. Day.
How the Benchmarks Fared?
The Dow Jones Industrial Average (DJI) decreased 7.68 points to close at 25,792.86. The S&P 500 fell 0.4% to close at 2,776.42. The tech-laden Nasdaq Composite Index closed at 7,224.00, losing 0.5%. The fear-gauge CBOE Volatility Index (VIX) increased 14.5% to close at 11.63. A total of around 8.30 billion shares were traded on Tuesday, higher than the last 20-session average of 6.48 billion shares. Decliners outnumbered advancers on the NYSE by a 2.04-to-1 ratio. On Nasdaq, a 2.18-to-1 ratio favored declining issues.
What Weighed On the Benchmarks?
Markets lost some of its early shine on Tuesday and closed in negative territory after special Counsel Robert Mueller reportedly subpoenaed President Trump’s former chief strategist Steve Bannon last week. A subpoena of this kind was issued by Mueller for the first time over the investigation of a possible link between Russian officials and members of Trump election campaign.
Additionally, oil prices fell after investors decided to lock in recent gains. Oil prices moved more than $70 a barrel recently, which prompted investors to indulge in profit-taking on Tuesday. Decrease in oil prices led the Energy Select Sector SPDR (XLE) to decline 1.3%, emerging as the worst performing sector of S&P 500.
Some of the sectors key components, including Chevron Corporation (CVX - Free Report) and Exxon Mobil Corporation (XOM - Free Report) fell 1.2% and 0.6%, respectively. Both Chevron and Exxon Mobil hold a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Out of the 11 key S&P 500 sectors, eight of them managed to close in the red. However, Health Care Select Sector SPDR (XLV) was one of the three S&P 500 sectors which increased on Tuesday. Gains in UnitedHealth Group Incorporated (UNH - Free Report) contributed to the sector’s rally.
UnitedHealth’s shares increased 1.9% after the diversified healthcare company reported fourth quarter earnings per share and revenues that beat their respective Zacks Consensus Estimate. Also, both the top and bottom line rose year-over-year. UnitedHealth also revised its 2018 financial outlook to reflect the effects of the U.S. corporate tax law changes. (Read More: UnitedHealth Beats on Q4 Earnings, Revises 2018 View)
Stocks That Made Headlines
BP to Cough Up Additional $1.7B in Charges for 2010 Oil Spill
BP plc (BP - Free Report) is likely to pay additional charge of about $1.7 billion in fourth-quarter 2017 relating to the 2010 Deepwater Horizon ("DWH") spill. (Read More)
CSX Earnings Surpass Estimates in Q4, Revenues Disappoint
CSX Corporation (CSX - Free Report) reported fourth-quarter 2017 earnings per share, beating the Zacks Consensus Estimate. (Read More)
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