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Stock Market News for Feb 20, 2020

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Wall Street closed higher on Wednesday following impressive comments by the Fed regarding the U.S. economy. Moreover, measures taken by China to steady its coronavirus-affected sagging economy also helped restoring investors’ confidence. All three major stock indexes ended in positive territory.

The Dow Jones Industrial Average (DJI) gained 0.4% or 115.84 points to close at 29,348.03. The S&P 500 surged 0.5% to close at 3,386.15. Meanwhile, the Nasdaq Composite Index closed at 9,817.18, climbing 0.9%. The fear-gauge CBOE Volatility Index (VIX) decreased 3% to close at 14.38.

A total of 7.22 billion shares were traded Wednesday, lower than the last 20-session average of 7.57 billion. Advancers outnumbered advancers on the NYSE 1.31-to-1 ratio. On Nasdaq, a 1.54-to-1 ratio favored advancing issues.  

How Did The Benchmarks Perform?

The Dow closed in positive territory with 18 components of the 30-stock index closing in the green while 12 ended in red. The Nasdaq Composite also ended in the positive territory due to strong performance by large-cap stocks buoyed by 6.9% jump in the share price of Tesla Inc. TSLA with a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The S&P 500 finished in the green. The Energy Select Sector SPDR (XLE) surged 1.3% while the Real Estate Select Sector SPDR (XLRE) plummeted 1.4%.  Notably, seven out of 11 sectors of the benchmark index closed in the green while four finished in red.

Fed Keeps Rate Unchanged

The Fed reaffirmed its previous impressive outlook about the U.S. economy and revealed that the economy appeared stronger than what the central expected during the second half of January. Accordingly, the Fed kept its benchmark lending rate unchanged at 1.50-1.75%.

However, the central banks has expressed concerned that the growing outbreak of coronavirus across the world and tensions in the Middle-East in the near-term. Several economists nave hinted that global economic threat may enable the Fed to pursue its accommodative monetary policies rather than tightening the money market.

China to Launch Fresh Economic Measures

China’s Ministry of Industry and Information Technology stated that the government has decided to help companies to solve their supply chain system which significantly impacted following the advent of coronavirus. Notably, the Chinese government has taken several monetary and administrative measures to solidify its sagging economy.

Economic Data

The Department of Commerce reported that the U.S. housing starts declined 3.6% to a seasonally adjusted 1.567 million units terminating the winning streak for three-straight months. However, January’s data surpassed the consensus estimate of 1.417 million units. Meanwhile, December’s data was revised upward from 1.608 million units to 1.626 million units, its highest level since December 2006.

On the other hand, building permits surged 9.2% in January to a seasonally adjusted 1.551 million units, the highest level since March 2007. January’s data outpaced the consensus estimate of 1.459 million units. Meanwhile, December’s data was revised upward from 1.416 million units to 1.42 million units.

Producer Price Index (PPI) for final demand jumped 0.5% in January, the largest gain since October 2018. The consensus estimate was 0.1%. Meanwhile, December’s metric also revised upward from 0.1% to 0.2%. The core PPI (excluding the volatile food, energy and trade services components) rose 0.3% in January, beating the consensus estimate of 0.2%. December’s metric also revised upward from 0.1% to 0.2%.

Stocks That Made Headline

Williams Misses Q4 Earnings Estimates, Tops on Revenues

The Williams Companies Inc. WMB reported fourth-quarter 2019 adjusted earnings per share (EPS) of 24 cents, missing the Zacks Consensus Estimate by a penny owing to weaker West segment performance. (Read More)

Pioneer Natural Q4 Earnings & Revenues Beat Estimates

Pioneer Natural Resources Co. PXD reported fourth-quarter 2019 earnings per share of $2.36, excluding one-time items, beating the Zacks Consensus Estimate of $2.12. (Read More)

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