Markets closed mostly lower after a decline in tech stocks following a dip in the shares of Apple. Also weighing on broader markets were Wilbur Ross’ and Steve Mnuchin’s comments at Davos. However, the Dow managed to post a record close after assistance from financial stocks. Meanwhile, the existing home sales for December came in below expected.
The Dow Jones Industrial Average (DJI) increased less than 0.2%, to close at 26,252.12. The S&P 500 fell almost 0.1% to close at 2,837.54. The tech-laden Nasdaq Composite Index closed at 7,415.06, losing 0.6%. The fear-gauge CBOE Volatility Index (VIX) increased 3.3% to close at 11.47. A total of around 7.63 billion shares were traded on Wednesday, higher than the last 20-session average of 6.53 billion shares. Decliners outnumbered advancers on the NYSE by a 1.21-to-1 ratio. On Nasdaq, a 1.68-to-1 ratio favored declining issues.
Dow Manages Gains on a Tough Day
Earlier in the session, a surge in industrial stocks boosted the Dow. Shares of industrial behemoths like General Electric (GE - Free Report) , Boeing (BA - Free Report) and Caterpillar (CAT - Free Report) all shot up. Caterpillar, in particular, gained after it witnessed an increase in its monthly machine retail sales. However, shares of Apple (AAPL - Free Report) declined by as much as 1.6% and weighed heavily on the blue-chip index. Also, comments from U.S. Commerce Secretary Wilbur Ross and U.S. Treasury Secretary Steven Mnuchin weighed on the Dow.
Wilbur Ross commented on Wednesday that United States was prepared for a trade war with China if the need arises. Speaking at the World Economic Forum (WEF) in Switzerland, Ross stated: “So trade wars have been in place for quite a little while; the difference is the US troops are now coming to the ramparts.” Ross also blamed China for hiding its practice of trade protectionism under the veil of free trade.
Even more noteworthy comments were heard from his colleague U.S. Treasury Secretary Steven Mnuchin who said the Trump administration favored “bilateral trade agreements.”’ Mnuchin added that any weakness in the dollar was beneficial for trade. His comments led to the ICE U.S. Dollar Index falling below the 90 mark for the first time since Dec 2014.
Further, the Trump administration imposed high tariffs on imported washing machines and solar panels on Monday. Such protectionist policies weighed on the greenback and broader markets.
Finally, the Dow managed to gain 41.3 points and finished at a fresh record. Gains for the blue-chip index were supported by a surge in financial stocks. Shares of Goldman Sachs (GS - Free Report) and American Express (AXP - Free Report) surged 2.2% and 1.4%, respectively and led the Dow higher, offsetting the losses incurred earlier. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Tech Stocks Decline, Weigh on S&P 500 and Nasdaq
Toni Sacconaghi, an analyst from Bernstein stated that Apple’s iPhone sales might turn out weaker than expected in the coming spring. Following such comments, shares of the tech behemoth plunged. Also weighing on the broader index was a decline in shares of Facebook, Amazon and Alphabet, which lost 1.5%, 0.4% and 0.4%, respectively.
Meanwhile, S&P 500 lost 1.6 points to end in negative territory, followed by a dip in tech stocks. Of the 11 major segments of the S&P 500, six ended in the red, with tech and utilities leading the laggards. The Technology Select Sector SPDR ETF (XLK) and Utilities Select Sector SPDR ETF (XLU) declined 0.8% and 0.6%, respectively. Such broad based losses for the tech stocks also weighed on the tech-laden index, Nasdaq, which shed 45.2 points to close in the red.
On the economic data front, the U.S. flash services PMI, released by IHS Markit declined to 53.3 this month. On the other hand, the flash manufacturing PMI surged to 55.5 in the same period.
Meanwhile, existing home sales for the month of December 2017 increased to 5.57 million units, below the consensus estimate of an increase of 5.69 million units. The reported value for the previous month was 5.78 million units. Such a dismal performance was due to a decline of 11.4% in the inventory for the month of December.
Stocks That Made Headlines
Xilinx Q3 Earnings & Revenues Top Estimates, Stock Up
Shares of Xilinx Inc. (XLNX - Free Report) rallied during yesterdays’ after-hour trade, after the chipmaker announced overwhelming third-quarter fiscal 2018 results, wherein its earnings and revenues, both, came ahead of the respective Zacks Consensus Estimate. (Read More)
Brown-Forman Woos Shareholders with Stock Split & Dividend
Brown-Forman Corporation’s (BF.B - Free Report) commitment to shareholders has been vital in its success story. (Read More)
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