Stock Market News for April 16, 2015 – Zacks Investment Research

Stock Market News for April 16, 2015 – Zacks Investment Research

Benchmarks ended higher on Wednesday following rise in oil prices and upbeat earnings results. While, energy shares gained as domestic crude oil price closed at the highest level this year, investors cheered mostly positive first quarter earnings results. Meanwhile, European Central Bank’s decision to keep interest rates unchanged while continuing with its asset purchasing program added to the bullish sentiment.

For a look at the issues currently facing the markets, make sure to read today’s Ahead of Wall Street article

The Dow Jones Industrial Average (DJI) gained 0.4% to close at 18,112.61. The Standard & Poor’s 500 (S&P 500) increased 0.5% to 2,106.63. The tech-laden Nasdaq Composite Index closed at 5,011.02; gaining 0.7%. The fear-gauge CBOE Volatility Index (VIX) dropped 6.1% to settle at 12.84. A total of about 4 billion shares were traded on NYSE on Wednesday. Advancers outpaced declining stocks on the NYSE. For 64% stocks that advanced, 32% declined.

Oil prices gained on Wednesday on lower than expected build in U.S. crude inventories. U.S. Energy Information Administration said U.S. commercial crude oil inventories increased by 1.3 million barrels to 483.7 million barrels, for the week ending Apr 10, 2015. This rise in crude inventories turned out to be less than analysts’ expectation of an increase by 4.1 million barrels. Prices of WTI crude increased 5.5% to $56.39 per barrel, its highest closing level since Dec 23, 2014. Additionally, Brent crude gained 3.1% to $60.32 per barrel.

Rise in oil prices had a positive impact on energy shares. The Energy Select Sector SPDR (XLE) gained 2.4%, the highest among the S&P 500 sectors. Dow components, Exxon Mobil Corporation (XOMAnalyst Report) and Chevron Corporation (CVXAnalyst Report) gained 1.7% and 1.4%, respectively. Other key energy stocks such as Schlumberger Limited (SLBAnalyst Report), EOG Resources, Inc. (EOGAnalyst Report) and Transocean Ltd. (RIGAnalyst Report) increased 3.6%, 1.6% and 10.1%, respectively.

The Materials Select Sector SPDR ETF (XLB) advanced almost 1% and was the second biggest gainer among the S&P 500 sectors. Key stocks from the sector including Monsanto Company (MONAnalyst Report), The Dow Chemical Company (DOWAnalyst Report), Praxair Inc. (PXAnalyst Report), LyondellBasell Industries N.V. (LYBAnalyst Report) and Ecolab Inc (ECLAnalyst Report) increased 0.2%, 0.4%, 0.4%, 3.5% and 0.8%, respectively. Yesterday’s gains were broad based, with 9 out of 10 S&P 500 sectors ending in the green.

Meanwhile, investors remained focused on first quarter earnings results. As of Wednesday, 38 S&P 500 members posted first quarter earnings up 17% on 3.7% revenue gains, with 76.3% beating earnings per share estimates. Among the 38, 36.8% were able to come ahead of top-line expectations.

Intel Corporation (INTCAnalyst Report) reported first quarter earnings per share of 41 cents, beating the Zacks Consensus Estimate by a cent. Delta Air Lines, Inc. (DALAnalyst Report) also posted first quarter earnings per share of 45 cents that was more than the Zacks Consensus Estimate by a cent. However, Bank of America Corp (BAC) reported first quarter earnings per share of 27 cents that fell short of the Zacks Consensus Estimate of 29 cents. While, shares of Intel and Delta Air Lines gained 4.3% and 2.6%, respectively, Bank of America’s shares dropped 1.1%.

Coming to economic data, the Board of Governors of the Federal Reserve System reported a decrease in industrial production. The report stated industrial production fell 0.6% in March after increasing 0.1% in February. This decline in industrial production in March was more than the consensus estimate of a decrease by 0.3%. Separately, capacity utilization decreased to 78.4%, more than the consensus estimate of a fall to 78.6%.

Additionally, the Empire State Manufacturing Survey Index came in at a negative 1.2 in April. The reading was in contrast to the consensus estimate expecting an increase to 7.5. The reading indicated that manufacturing activity was flat for New York manufacturers. Separately, the NAHB/Wells Fargo Housing Market index increased to 56 in April from March’s reading of 52.

In overseas news, ECB President Mario Draghi said the central bank’s stimulus program is “finally finding its root” through easier credit situations and lower interest rates. ECB kept its record low lending rates unchanged. The apex bank also intends to continue its euro 60 billion monthly bond buying program through Sept 2016. ECB’s commitment to revive the Eurozone economy had a positive impact on broader markets.

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Stock Market News for April 16, 2015 – Zacks Investment Research

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