Stock Market News for December 16, 2014 – Zacks Investment …

Stock Market News for December 16, 2014 – Zacks Investment …

Markets finished a choppy session in the negative territory on Monday as yet another slide in oil prices dented investor sentiment. Moreover, mixed economic data on the domestic front weighed on the benchmarks. The Dow had gained more than 100 points in the initial session, but lost all the gains by the closing bell.

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) declined 0.6%, or 100 points, to close at 17,180.84. The Standard & Poor 500 (S&P 500) also lost 0.6% to close at 1,989.63. The tech-laden Nasdaq Composite Index closed at 4,605.16; decreasing more than 1%. However, the fear-gauge CBOE Volatility Index (VIX) declined 3.1% to settle at 20.42. A total of about 8.4 billion shares were traded on Monday, higher than the last five-day average of 7.4 billion. Decliners outpaced advancing stocks on the NYSE. For 74% stocks that declined, 24% advanced.

Though the energy sector opened in the positive territory following a rebound in oil prices, energy shares were dragged down by another decline in oil prices at the end of Monday’s session. The price of WTI crude oil dropped 3.4% to $55.91 per barrel, reaching another five and a half year low. On the other hand, the price of Brent crude oil fell 1.3% to $61.06 per barrel.

On Friday, the International Energy Agency (IEA) reduced its guidance for global oil demand in 2015 by 230,000 barrels per day (bpd) to 0.9 million bpd on global growth concerns. According to the IEA, weak global growth has reduced oil demand in major parts of the globe and negatively impacted oil prices.

The Energy Select Sector SPDR (XLE) lost almost 0.9% following the slide in oil prices on Monday. Key energy stocks including Marathon Oil Corporation (MROAnalyst Report), Kinder Morgan, Inc. (KMIAnalyst Report), Chevron Corporation (CVXAnalyst Report) and Cabot Oil & Gas Corporation (COGAnalyst Report) declined 2.6%, 2.3%, 1.5% and 1%, respectively. All S&P 500 sectors registered losses on Monday.

Moreover, a major decline in biotech stocks had negative impact on the Nasdaq. The iShares Nasdaq Biotechnology (IBB) dropped 2.8% on Monday. Key biotech stocks including Biogen Idec Inc. (BIIBAnalyst Report), Vertex Pharmaceuticals Incorporated (VRTXAnalyst Report), Regeneron Pharmaceuticals, Inc. (REGNAnalyst Report) and Amgen Inc. (AMGNAnalyst Report) declined 2.5%, 4.8%, 3.7% and 3%, respectively.

Moreover, the Federal Reserve Bank of New York reported that Empire State manufacturing index decreased to a negative 3.6 in December from November’s reading of 10.2. The reading was surprisingly lower than the consensus estimate of 10.8%. It was also the lowest level for the index since Jan 2013.

However, the Federal Reserve reported that industrial production rose 1.3% in November, easily beating the consensus estimate of 0.7% gain. This impressive growth rate was preceded by 0.1% rise in October. This was also the biggest rise since May 2010.

The focus this week is on the Fed, which is expected to provide a roadmap for the course of monetary policy on Wednesday. Investors are looking forward to get a definite indication on rate hikes. Investors will also look for what the Fed does with the ‘considerable time’ phrase.

Separately, shares of PetSmart, Inc. (PETMSnapshot Report) gained 4.3% following news that a consortium led by BC Partners will acquire the company for $8.7 billion or $83 per share. This implies a 7% premium to the last day’s closing price of $77.67. This is likely to be one of the major private equity deals of 2014. PetSmart was the second best performer among the S&P 500 companies on Monday.

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Stock Market News for December 16, 2014 – Zacks Investment …

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