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Stock Market News For May 29, 2018

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U.S. stocks closed mostly lower Friday as energy stocks plunged owing to a steep reduction of oil price. Both Dow 30 and S&P 500 ended in negative territory. However, Nasdaq composite closed in the green buoyed by a strong showing by chipmaker stocks.

The Dow Jones Industrial Average (DJI) closed at 24,753.09, decreased 0.2%. The S&P 500 Index (INX) also fell 0.2% to close at 2,721.33. However, the Nasdaq Composite Index (IXIC) closed at 7,433.85, increasing 0.1%. A total of 5.8 billion shares were traded on Friday, lower than the last 20-session average of 6.6 billion shares. Decliners outnumbered advancers on the NYSE by 1.25 -to-1 ratio. On the Nasdaq, advancers had an edge over decliners by 1.05 to -1 ratio.  The CBOE VIX increased 5.5% to close at 13.22.

How Did the Benchmarks Perform?

The Dow lost 0.4% marking its second straight negative session. Notably, 17 of the 30-stocks in the blue-chip index closed in the red while 13 traded in the green.

The S&P 500 decreased 0.2% on 2.6% drop of the Energy Select Sector SPDR (XLE). Notably, seven out of 11 sectors of the benchmark index ended in negative territory.

The Nasdaq Composite gained 0.1% strong gains by large chipmakers.

Oil Price Plunge

Oil prices plummeted on Friday following the news that OPEC (Oil and Petroleum Exporting Countries) and Russia are planning to increase crude oil production by 1 million barrels a day to neutralize the effect of a shortfall of oil production from Iran and Venezuela.

July West Texas Intermediate crude oil future (CLN8) decreased by $2.83, or 4%, to settle at $67.88 a barrel on the New York Mercantile Exchange, registering the lowest closing of the future contract since May 1. Likewise, July Brent oil, the international benchmark future (LCON8) declined by $2.35, or 3%, to $76.44 a barrel on ICE Futures Europe, posting its lowest settlement since May 8.

Consequently, share price of oil behemoths, such as Exxon Mobil Corp. (XOM - Free Report) and Chevron Corp. (CVX - Free Report) declined 1.9% and 3.5%, respectively. Both Exxon and Chevron carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Chip Markers Gain

Large chipmakers gained on Friday following the news that China is considering the approval of Qualcomm Inc.’s (QCOM - Free Report) $44 billion takeover deal of NXP Semiconductors NV (NXPI - Free Report) . Stock price of major chipset developers, such as Qualcomm, NXP Semiconductors, Broadcom Inc. (AVGO - Free Report) and Intel Corp. (INTC - Free Report) increased 1.5%, 4.7%, 2.7% and 1.3%, respectively.

Economic Data

The Commerce Department reported that the U.S. durable goods orders fell 1.7% in April as demand for transportation equipment plummeted 6.1%. The figure was worse than the consensus estimate of a decline of 1.2%.

Despite the overall decline, the orders for core capital goods (excluding aircraft) in fact increased 1% in April, reversing 0.9% drop in orders in the previous month. Core capital goods orders increased 6.6% on a year-on-year basis, reflecting strong business spending by the U.S. entrepreneurs on equipment. Industry-wise, major gainers are electrical equipment, appliances and components, computers and electronic products, fabricated metals and primary metals.

Weekly Roundup

For the week, all the three major indexes increased reversing the negative trend of the previous week. The Dow 30, the S&P 500 and the Nasdaq gained 0.2%, 0.3% and 1.1%, respectively, despite severe volatility.

Markets closed sharply higher on Monday as trade war tensions between the United States and China declined for the time being. This saw a rally in industrials stocks. However, U.S. stocks ended lower on next day after President Donald Trump said that he wasn’t satisfied with the progress of United States-China trade talks.

On Wednesday, markets closed slightly higher after the minutes of Fed’s meeting hinted that policymakers aren’t worried about inflation briefly running above the target level and that it would not result in faster interest rate hikes. However, on Thursday, markets ended in the red after President Donald Trump scrapped his planned meeting with North Korea’s premier Kim Jong Un. Further, Trump also threatened to impose import duty on cars and trucks that took a toll on the markets.

Stock That Made Headline

Foot Locker Q1 Earnings & Sales Top Estimates, Stock Up

Foot Locker Inc. (FL - Free Report) continued with its positive earnings surprise streak for the third straight quarter, when it reported first-quarter fiscal 2018 results. (Read More)

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