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Stock Market News For Apr 3, 2019

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Wall Street closed mixed on Tuesday as investors digest weak earnings result and not so impressive economic data. Continuation of Brexit issue also dented investors’ confidence. The Dow ended in the red while both the S&P 500 and Nasdaq Composite managed to advance.

The Dow Jones Industrial Average (DJI) closed at 26,179.13, declining 0.3%. The S&P 500 Index (INX) rose 0.1% to close at 2,867.24. Meanwhile, the Nasdaq Composite Index (IXIC) closed at 7,832, gaining 0.3%. A total of 6.45 billion shares were traded on Tuesday, lower than the last 20-session average of 7.46 billion shares. Decliners outnumbered advancers on the NYSE by 1.13-to-1 ratio. On the Nasdaq, advancers had an edge over decliners by 1.04-to-1 ratio.  The CBOE VIX decreased 0.3% to close at 13.36. 

How Did the Benchmarks Perform?

The Dow ended in negative territory with 21 stocks of the 30-stocks blue-chip index finishing in the red while nine ended in the green. The tech-heavy Nasdaq Composite finished in the green due to strong performance by large-cap tech stocks.

The S&P 500 also closed in the green. The Real Estate Select Sector SPDR (XLRE) gained 0.9% while Consumer Staples Select Sector SPDR (XLP) lost 0.8%.  Notably, five out of eleven sectors of the benchmark index closed in the green and six finished in the red.

Walgreens Boots Pull Down Dow

Pharmacies and Drug Stores giant Walgreens Boots Alliance Inc. (WBA - Free Report) reported disappointing earnings results for the second quarter of fiscal 2019. Reported adjusted earnings per share (EPS) of $1.64 were down 5.4% year over year. The figure missed the Zacks Consensus Estimate of $1.70.

Walgreens Boots recorded total sales of $34.53 billion missing the Zacks Consensus Estimate of $34.87 billion.Gross margin contracted 210 basis points (bps) to 22.4%.Walgreens Boots lowered its fiscal 2019 adjusted EPS guidance from 7-12% growth at constant exchange rate to roughly flat.

Consequently, shares of Walgreens Boots plunged 12.8%, marking its worst single-day drop since Aug. 6, 2014. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Weak Economic Data

The Department of Commerce reported that U.S> durable goods orders for the month of February declined 1.6%, higher than the consensus estimate of a decline of 1.5%. Durable goods orders for January were revised downward from a gain of 0.4% reported earlier to just 0.1%.

Orders for non-defense core capital goods (excluding aircrafts) fell 0.1% in February.However, core capital goods orders increased 2.6% on a year-on-year basis.Major decliners were machinery, computers and electronic products. This metric is closed watched by economists as an indicator for business spending plans. January’s core capital goods orders revised upward to 0.9% from 0.8% reported earlier.

Brexit Problems Continue

The British parliament is in a state of deadlock as it failed for the second time to vote for an alternative option to Prime Minister Theresa May’s Brexit agreement which was rejected by the parliament. If no deal finally gets the approval of the parliament, then Britain may head for a no-deal Brexit by Apr 12.

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