Saturday, October 22, 2016
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Market Digest Online FRIDAY, OCTOBER 21, 2016: Stocks closed lower Thursday, after a sharp fall in oil prices, while investors parsed through key U.S. economic data, and digested a key European Central Bank decision on interest rates. The Dow Jones industrial average closed about 40 points lower, with Travelers Companies contributing the most losses. The S&P 500 held 0.14 percent lower as telecommunications fell approximately 2 percent. The Nasdaq composite slipped 0.1 percent. The three major indexes alternated between gains and losses throughout the session.

U.S. crude futures for November delivery fell 2.27 percent to settle at $50.43 per barrel, a day after hitting a 15-month high, as traders took profits off the table following the previous day's rally on another unseasonal draw in U.S. crude oil stocks.

In U.S. economic news, existing home sales rose 3.2 percent last month to a seasonably adjusted rate of 5.47 million, their highest since June. Leading indicators for September, meanwhile rose 0.2 percent. Meanwhile, weekly jobless claims rose by 13,000 to 260,000, but notched their 85th straight week coming in below 300,000, the longest period since 1970. Meanwhile, the Philadelphia Federal Reserve Business Index for October came in at 9.7, below September's 12.8.

Investors also turned their eyes toward Europe, as the ECB kept interest rates unchanged, as was widely expected. Facing high unemployment, weak growth and ultra low inflation, the ECB has provided extraordinary stimulus in recent years, cutting interest rates deep into negative territory and pushing the cost of credit to all-time lows, hoping to jump start growth.

"There is a question as to whether the ECB is, not just going to extend [quantitative easing], but also which direction they're going to go on," said Quincy Krosby, market strategist at Prudential Financial. "What assets are they going to buy? Remember, it's a much more shallow market for QE there than it is here."

The dollar whipsawed against a basket of currencies, last trading 0.37 percent higher. The euro fell 0.42 percent to $1.091 while the yen dropped 0.55 percent to 103.95.

In corporate news, earnings season carried on, as Dow components Travelers and Verizon both posted quarterly results. Travelers beat estimates on both earnings and revenues, while Verizon missed on revenue while beating on profits. American Express reported better-than-expected results, sending its shares more than 10 percent higher. That said, eBay shares dropped more than 10 percent, despite beating Street estimates, after lowering its earnings guidance for the fourth quarter.

As of 9 a.m. ET Thursday, 79 percent of the 99 S&P 500 components that had reported beat Wall Street consensus estimates on earnings, while 63 percent exceeded expectations on revenues, according to data from The Earnings Scout.

The Dow Jones industrial average rose 1 point, or 0.01 percent, to 18,203, with American Express leading advancers and Travelers the top decliner. The S&P 500 fell 1 point, or 0.05 percent, to 2,143, with telecommunications leading six sectors lower and health care the biggest riser. The Nasdaq slipped 4 points, or 0.1 percent, to 5,242. About eight stocks declined for every five advancers at the New York Stock Exchange, with an exchange volume of 368 million and a composite volume of 1.807 billion in afternoon trade. Gold futures for December delivery fell $2.30 to $1,267.60 per ounce

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