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Stock Market News for Nov 11, 2019

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Wall Street ended higher on Friday despite the fact that investors’ remained concerned about a smooth passage for the partial trade deal between the United States and China. However, better-than-expected third quarter 2019 earnings results strengthened market participants’ faith on risky assets like equities. All three major stock indexes closed in the green. For the week also indexes closed in the green.

The Dow Jones Industrial Average (DJI) gained 6.44 points to close at 27,681.24. The S&P 500 increased 0.3% to close at 3,093.08. Meanwhile, the Nasdaq Composite Index closed at 8,475.31, climbing 0.5%. The fear-gauge CBOE Volatility Index (VIX) decreased 5.2% to close at 12.07, lowest closing since Jul 24. A total of 6.59 billion shares were traded Friday, lower than the last 20-session average of 6.79 billion. Advancers outnumbered decliners on the NYSE by a 1.07-to-1 ratio. On Nasdaq, a 1.13-to-1 ratio favored advancing issues.

How Did The Benchmarks Perform?

The Dow closed in positive territory with 19 components of the 30-stock blue-chip index closing in the green while 11 ended in red. The S&P 500 closed in the green. The Technology Select Sector SPDR (XLK) and the Health Care Select Sector SPDR (XLV) gained 0.6% and 0.7%, respectively. The tech-laden Nasdaq Composite ended finished in the green buoyed by strong performance of large-cap tech stocks.

Fresh Doubt Over Partial Trade Deal

On Nov 8, President Donald Trump told reports that he hasn’t agreed so far to roll back existing tariffs in phases that his administration imposed on Chinese over the past one and half years. Moreover, senior U.S. Trade Advisor Peter Navarro said that no formal agreement has taken place between the United States and China to remove tariffs on each other goods. 

Notably,on Nov 7, Gao Feng, a spokesperson for China’s Commerce Ministry said that both United States and China have agreed to get rid of existing trade tariffs imposed in phases. Per Gao, both sides will simultaneously eliminate some of the existing tariffs in order to reach the phase one of the broader trade deal.  

Better-Than-Expected Third-Quarter Earnings Results

As of Nov 8, 447 S&P 500 members reported third-quarter results. Total earnings for these index members decreased 1.5% from the same period last year while revenues increased 4.2%. Notably, 72.5% companies surpassed EPS estimates while 57.9% beat on revenues.

At present, total third-quarter earnings for the S&P 500 Index are expected to be down 1.9% from the prior-year period while revenues are expected to increase 4.2%. This indicates improvement from an earnings decline of 5% on 4.2% higher revenues, expected at the beginning of the reporting cycle.

The Walt Disney Co. (DIS - Free Report) reported fourth quarter of fiscal 2019 earnings results wherein both the top and bottom line surpassed the respective Zacks Consensus Estimate. (Read More). Consequently, the shares of The Walt Disney surged 3.8%.

Booking Holdings Inc. (BKNG - Free Report) reported third-quarter 2019 earnings results wherein the bottom line exceeded he Zacks Consensus Estimate while the top line missed the same marginally. (Read More) Meanwhile, the stock price of Zacks Rank #3 (Hold) climbed 1.6%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Weekly Roundup

Wall Street rallied impressively in the previous week. The Dow, the S&P 500 and the Nasdaq Composite advanced 1.2%, 0.9% and 1.1%, respectively. The Dow completed the winning streak of three-straight weeks, while the S&P 500 and the Nasdaq Composite finished in positive territory for the fifth and sixth consecutive week, respectively.

Possibility of a partial trade deal between the United States and China and better-than-expected third quarter earnings results were major catalysts. Moreover, strong U.S. economic data also bolstered investors’ confidence on equity markets.

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