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Stock Market News For Apr 18, 2018

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U.S. stock markets continued their winning streak for the second consecutive day supported by robust first-quarter earnings results and strong economic data. All three major indexes closed at highest level in about a month. Moreover, all three indexes closed above their 50-day moving average, an important metric to calculate short-term price momentum of securities.

The Dow Jones Industrial Average (DJI) closed at 24,786.63, gaining 0.9% or 213.59 points. The S&P 500 Index (INX) increased 1.1% to close at 2,706.39. Meanwhile, the Nasdaq Composite Index (IXIC) closed at 7,281.10, increasing 1.7%. A total of 6.15 billion shares were traded on Tuesday, lower than the last 20-session average of 6.98 billion shares. Advancing issues outnumbered decliners on the NYSE by 2.77-to-1 ratio. On the Nasdaq, advancers had an edge over decliners by 2.14 to-1 ratio. The CBOE VIX declined 7.9% and closed at 15.25.

How Did the Benchmarks Perform?

The Dow gained 0.9% with 24 stocks of the 30-stock index closing in the green while six stocks traded in the red. Notably, the blue-chip index closed at its highest level since Mar 16 and returned to positive zone for the year for the first time since Mar 20.

The S&P 500 increased 1.1% led by 1.9% gain of both the Technology Select Sector SPDR (XLK) and Consumer Discretionary Select Sector SPDR (XLY). Ten out of 11 sectors of the benchmark index ended in positive territory with six of them gaining more than 1%. Notably, S&P 500 breached its 50-day moving average and closed above this level for the first time since Mar 16.

The tech-heavy Nasdaq Composite also gained 1.7% driven by a sharp increase in the share price of Netflix Inc. (NFLX - Free Report) to a record high level following blockbuster results in the first quarter. Netflix also led the overall technology sector to surge on Tuesday.

Tech Stocks Surge on Fabulous Netflix Result

Netflix’s first-quarter earnings and revenues not only beat their respective Zacks Consensus Estimate but also rose year-over-year. (Read More: Netflix Q1 Earnings and Revenues Crush Estimates).

Netflix added 7.41 million subscribers well above the consensus estimate of 6.35 million. Consequently, the stock price increased 9.2% to $336.06. The stock touched an intraday high of $338.62, which was also a 52-week high. Netflix carries a Zacks Rank #2 (Buy). You can seethe complete list of today’s Zacks #1 Rank  stocks here.

The highly impressive results of Netflix have a domino effect on the tech sector as tech giants like Twitter Inc. (TWTR - Free Report) , Alphabet Inc. (GOOGL - Free Report) , Microsoft Corp. (MSFT - Free Report) , Apple Inc. (AAPL - Free Report) and Inc. (AMZN - Free Report) gained 11.41%, 3.2%, 2%, 1.4% and 4.3%, respectively.

Earnings Momentum Remain Strong

First-quarter earnings continued to show broad-based momentum as companies from various sectors have started declaring robust results. 

UnitedHealth Group Inc.’s (UNH - Free Report) first-quarter earnings and revenues topped the Zacks Consensus Estimate. The company revised its 2018 financial outlook. Adjusted net earnings have been raised to $12.40-$12.65 from the previously projected $12.30-$12.60 band. Consequently, the stock price rose 3.6% (Read More: UnitedHealth Q1 Earnings & Revenues Top, View Lifted).

The Goldman Sachs Group Inc.’s (GS - Free Report) first-quarter earnings and revenues outpaced the Zacks Consensus Estimate. However, management expects to halt its second-quarter share buyback to utilize funds for future investment, especially for new acquisitions. Consequently, the stock price dropped 1.7% (Read More: Goldman Sachs Q1 Earnings Impress on Improved Trading).

Likewise, Johnson and Johnson’s (JNJ - Free Report) first-quarter earnings and revenues surpassed the Zacks Consensus Estimate. Management maintained the previously issued adjusted earnings guidance of $8.00 - $8.20 for 2018, which failed to live up to investor’s expectations. As a result, the stock price fell 0.9% (Read More:  J&J Tops Q1 Earnings Estimates, Raises Sales Guidance)

Economic Data

According to the U.S. Commerce Department, housing starts rose 1.9% to a seasonally adjusted annual rate of 1.319 million units in March beating the consensus estimate of 126.5 million. However, single-family homebuilding, the largest component of the housing market, fell 3.7% to 867,000 units in March.

The U.S. Federal Reserve’s measure for industrial production rose 0.5% in March better than the consensus estimate of 0.3%. A rebound in utilities demand from February’s weather-related decline and surge in mining more than offset tepid output of machinery and food products. Moreover, industrial capacity in use rose 0.3% in March to reach 78.0. Notably, March reading is the highest level in three years.

Stocks That Made Headlines

United Continental Q1 Earnings Beat, FY18 View Bullish

United Continental Holdings, Inc. (UAL - Free Report) reported better-than-expected results in the first quarter of 2018. (Read More)

SM Energy Issues Q1 Yield & Spending Update, Guides Q2 & '18

SM Energy Company (SM - Free Report) released production, realized prices and total capital spending view for the first quarter of 2018. (Read More)

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