Stock Market News for March 27, 2015 – Zacks Investment Research

Stock Market News for March 27, 2015 – Zacks Investment Research

Benchmarks ended in the red for the fourth-straight session after escalating tensions in the Middle-East following an air strike in Yemen dampened investor sentiment. Additionally, the crisis in Yemen drove oil prices higher on Thursday on concerns that it may lead to reduction in oil supply. However, upbeat initial claims data limited some of the day’s losses. The S&P 500 experienced its longest losing stretch since January.

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 0.2% to close at 17,678.23. The Standard & Poor’s 500 (S&P 500) decreased more than 0.2% to 2,056.15. The tech-laden Nasdaq Composite Index closed at 4,863.36; losing nearly 0.3%. The fear-gauge CBOE Volatility Index (VIX) gained 2.3% to settle at 15.80. A total of about 3.51 billion shares were traded on NYSE on Thursday. Decliners outpaced advancing stocks on the NYSE. For 59% stocks that declined, 38% advanced.

Reportedly, Saudi Arabia along with its allies has launched an air strike against advancing Iran-backed Shia tribal forces in Yemen. Yemen, which borders Saudi Arabia, has been facing an intensified aggression from the Houthis in recent months. It was reported that the Houthis have already captured a major part of the country’s northern territory, which also includes the capital of Sanaa.

Meanwhile, Saudi Arabia’s ambassador in the U.S., Adel al-Jubeir, said yesterday that his country is ready to provide any form of support to protect the Yemen government. It was reported that countries including Bahrain, Kuwait, Qatar and the United Arab Emirates have committed to provide fighter jets in order to help Saudi Arabia’s attacks in Yemen. Moreover, Pakistan and Egypt will provide naval support to Saudi Arabia. However, U.S. officials reportedly said the country will not intervene in Yemen’s civil war.

Reportedly, an official from Iran has strongly opposed Saudi Arabia’s actions and said the attack will intensify geopolitical tensions to a large extent. Additionally, a Houthi supporter warned that Saudi Arabia’s intervention will inject more aggression into the war. Separately, supporters of Yemen’s President Abd Rabbuh Mansour Hadi claimed that they had taken over Aden airport, which is located near Yemen’s second largest city.

Oil prices rose sharply yesterday on supply concerns following Yemen’s crisis. The prices of WTI crude oil and Brent crude oil jumped 4.3% and 4.6% to $51.43 per barrel and $59.19 a barrel, respectively. However, gains in oil prices failed to boost energy stocks on Thursday.

Concerns regarding crisis in the Middle-East had a negative impact on the Utilities Select Sector SPDR (XLU). The sector declined more than 0.8% and was the biggest loser among the S&P 500 sectors yesterday. Key utilities stocks including Exelon Corporation (EXCAnalyst Report), Southern Company (SOAnalyst Report), PG&E Corporation (PCGAnalyst Report) and Duke Energy Corporation (DUKAnalyst Report) lost 1%, 0.6%, 0.7% and 0.8%, respectively. Eight out of 10 S&P 500 sectors registered losses on Thursday.

However, shares of Red Hat, Inc. (RHTSnapshot Report) surged 10.1% after announcing fourth quarter earnings of 30 cents per share, beating the Zacks Consensus Estimate by 3 cents. Also, company’s Non-GAAP revenues increased 21.9% year over year to $487.9 million and beat the Zacks Consensus Estimate of $457 million.

Moreover, Accenture plc’s (ACNAnalyst Report) shares jumped 6.8% after declaring second-quarter fiscal 2015 earnings per share of $1.08, which beat the Zacks Consensus Estimate by a penny. Additionally, Accenture’s second-quarter net revenue not only increased 5.1% year over year to $7.49 billion but also came higher than the Zacks Consensus Estimate of $7.35 billion.

Encouraging earnings results from these companies boosted the Technology Select Sector SPDR (XLK), which gained almost 0.1%. Key technology stocks including Intel Corporation (INTCAnalyst Report), International Business Machines Corporation (IBMAnalyst Report), Apple Inc. (AAPLAnalyst Report) and Yahoo! Inc. (YHOOAnalyst Report) rose 0.6%, 0.9%, 0.7% and 0.6%, respectively.

In economic news, the U.S. Department of Labor reported that jobless claims declined 9,000 for the week ending Mar 21 to 282,000, lower than the consensus estimate of 290,000. Moreover, the 4-week moving average also decreased 7,750 from previous week’s level to 297,000.

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Stock Market News for March 27, 2015 – Zacks Investment Research

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