Benchmarks closed mostly in the red on Monday with both the Dow and S&P 500 declining, while the Nasdaq increased over the day. Ever since President Trump imposed fresh levies on steel and aluminum imports investors have been concerned over prospects of a trade war. Fears of this nature dragged industrials lower during the session, a decline which weighed on the broader markets. However, tech-heavy index Nasdaq managed to end at new highs for second straight day following an investor friendly jobs report on Friday.
How the Benchmarks Fared?
The Dow Jones Industrial Average (DJI) decreased 0.6%, or 156.64 points, to close at 25,178.61. The S&P 500 fell 0.1% to close at 2,783.02. However, the tech-laden Nasdaq Composite Index closed at 7,588.33, gaining 0.4%. The fear-gauge CBOE Volatility Index (VIX) increased 7% to close at 15.67. A total of 6.52 billion shares were traded on Monday, lower than the last 20-session average of 7.2 billion shares. Advancers outnumbered decliners on the NYSE by a 1.22-to-1 ratio. On Nasdaq, a 1.45-to-1 ratio favored advancing issues.
Trump’s Tariff Law to Initiate Trade War?
On Mar 8, President Trump signed his tariff plan into law, which will come into effect from Mar 23. Per this law, fresh levies have been imposed on steel and aluminum imported from other countries. However, the plan excludes countries like Canada and Mexico, offering Trump a chance to renegotiate terms of the North American Free Trade Agreement (NAFTA) with the two countries.
However, Trump’s protectionist stance raised concerns over a possible retaliation by other countries with similar kind of moves. This in turn had a negative impact on the Industrial Select Sector SPDR (XLI) which declined 1.2%, becoming the biggest loser among the S&P 500 sectors. Three Dow components from this sector, United Technologies Corporation (UTX - Free Report) , 3M Company (MMM - Free Report) and The Boeing Company (BA - Free Report) declined 1.9%, 0.6% and 2.9%, respectively.
Nasdaq Hits All-Time High For Second Straight Day
The tech-based index hit an all-time high for the second consecutive trading day. Shares of Broadcom Inc. (AVGO - Free Report) rose 3.6% after a statement from the White House stated that the “proposed takeover” of QUALCOMM Incorporated (QCOM - Free Report) by Broadcom “is prohibited.” President Trump signed an Executive Order late on Monday, which ordered both the companies to "immediately and permanently abandon the proposed takeover."
Broadcom was the second best performing stock among the Technology Select Sector SPDR (XLK). The sector rose 0.3% with two of its key holdings, Apple Inc. (AAPL - Free Report) and Alphabet Inc. (GOOGL - Free Report) increasing 1% and 0.4%, respectively. Both the tech giants possess a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Markets entered into correction territory last month following strong wage growth in January. Subdued wage growth and strong job additions in February calmed inflation fears. Last month’s jobs data also continues to have a positive impact on the Nasdaq.
Stocks That Made Headline
Eni to Divest 10% in the Shorouk Concession for $934M
Eni SpA (E - Free Report) has agreed to divest 10% of its stake in the Shorouk concession, offshore Egypt, to a wholly owned subsidiary of Mubadala Investment Company, Mubadala Petroleum. (Read More)
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