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Stock Market News For May 21, 2018

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Markets closed lower on Friday as trade negotiations between the United States and China continued to weigh on investors’ sentiment. Also, bond yields reached their highest level since 2011 last week. Bank stocks in particular took a hit. The S&P 500 and Nasdaq closed in the red, while the Dow barely managed to end the day higher.

The Dow Jones Industrial Average (DJI) remained almost unchanged from the previous day, to close at 24,715.09. The S&P 500 declined 0.3% to close at 2,712.97. The Nasdaq Composite Index closed at 7,354.34, declining 0.4%. A total of 6.18 billion shares were traded on Friday, lower than the last 20-session average of 6.64 billion shares. Decliners outnumbered advancers on the NYSE by a 1.01-to-1 ratio. On Nasdaq, a 1.03-to-1 ratio favored declining issues.

How did the Benchmark Perform?

The Dow gained 1.1 points, almost unchanged from Thursday. Shares of Caterpillar and Boeing gained 1.3% and 2.1%, respectively. The tech-heavy Nasdaq lost 28.13 points.

The S&P 500 declined 7.16 points, with the Energy Select Sector SPDR Fund (XLE) and Energy Select Sector SPDR Fund (XLF) losing 0.8% and 0.9%, respectively. Major bank stocks such as JP Morgan Chase (JPM - Free Report) , Citigroup (C - Free Report) , Wells Fargo (WFC - Free Report) and Bank of America (BAC - Free Report) lost 1.6%, 2.2%, 1% and 1.8%, respectively. Bank of America has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (String Buy) stocks here.

U.S.-China Trade Talks Fuel Tensions

Trade war tensions between the United States and China have been escalating over the last few months after both the countries started targeting each other with tariffs on exports of some of their products. On Thursday, the United States and China started their second round of trade talks.

However, markets reacted once again reacted on Friday after President Donald Trump said that he doubted that negotiations would have a positive outcome. Moreover, an official from the Chinese ministry denied reports of China making an offer to the United States of lowering trade deficit by $200 billion. This further created tension among investors resulting in huge selloffs.

Treasury Yield Continues to be High

The benchmark 10-year note yield continued to be above the psychological mark of 3% on Friday. Investors continued to fear that the Fed would be tightening monetary policy faster than expected, resulting in huge selloffs of Treasurys.  

Weekly Roundup

Markets didn’t enjoy a good week as all the three major indexes posted weekly losses. Both the Dow and the S&P 500 registered a weekly loss of 0.5%, while the Nasdaq declined 0.7%. Trade talks between the United States and China remained in focus this week, which continued to weigh on investors’ sentiments.

Moreover, high interest rates too pushed stocks lower this week. The 10-year note yield crossed the 3.1% mark for the first time since 2011, denting investors’ confidence. This saw investors panicking, as yield hitting the psychological 3% level triggered fears that equities could become less appealing. This further escalated fear, resulting in huge selloffs.

Stocks That Made Headlines

TransUnion to Acquire HPS, Boost Healthcare Suite

TransUnion’s (TRU - Free Report) subsidiary — TransUnion Healthcare — inked a deal to acquire Healthcare Payment Specialists (“HPS”). Based in Fort Worth, TX, Healthcare Payment Specialists assists healthcare service providers in boosting medical reimbursements.  (Read More)

Cerner-VA Pact to Use EHR Platform for Better Veteran Service

Cerner Corporation’s wholly owned subsidiary, Cerner Government Services, Inc., recently signed an agreement with the Department of Veterans Affairs (VA). (Read More)

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