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Stock Market News For Jan 17, 2019

Benchmarks ended in the green for the second session on the trot on Wednesday as U.S. stocks posted their best day in a month. Shares of Goldman Sachs hit a record high and resulted in the Dow gaining more than 100 points in the trading session. The S&P 500 and the Nasdaq also experienced broad-based gains for the day.

Meanwhile, Theresa May survived a vote of no confidence in the British parliament which was initiated post the rejection of her Brexit deal. Finally, Fed’s prosecutors launched an investigation into Huawei Technologies’ alleged theft of U.S. trade secrets.

The Dow Jones Industrial Average (DJI) increased 0.7%, to close at 24,065.59. The S&P 500 increased 1.1% to close at 2,610.30. The tech-laden Nasdaq Composite Index closed at 7,023.83, gaining 1.7%. The fear-gauge CBOE Volatility Index (VIX) decreased 2.5% to close at 18.60. A total of around 6.96 billion shares were traded on Tuesday, lower than the last 20-session average of 8.79 billion shares. Advancers outnumbered decliners on the NYSE by a 1.83-to-1 ratio. On Nasdaq, a 2.14-to-1 ratio favored advancing issues.

Goldman’s Best Day in 10 Years Propels Dow

The Dow added 141.6 points to end the session in the positive territory as Goldman Sachs posted its best day since 2009, with its shares rising 9.5% on Wednesday. The investment bank reported blowout earnings in Q4 2018, extending its streak of quarterly earnings beat to seven straight quarters. Reflecting the highest net revenues since 2010, Goldman Sachs’ GS results recorded a positive earnings surprise of 23.8%. The company reported earnings per share of $6.04, comfortably beating the Zacks Consensus Estimate of $4.88. (Read More)

Meanwhile, shares of Bank of America BAC gained 7.2% and boosted broader market sentiment. Loan growth, higher interest rates and a slight fall in costs drove Bank of America’s fourth-quarter 2018 earnings of 70 cents per share, which handily outpaced the Zacks Consensus Estimate of 63 cents. (Read More)

S&P 500 and Nasdaq Rise for the Second Straight Session

The S&P 500 rose 5.8 points to end the session in the green. Of the 11 major sectors of the S&P 500, six ended in positive territory, with financials leading the advancers. The Financial Select Sector SPDR ETF (XLF) surged 2.1% during the trading day. Meanwhile, the Nasdaq climbed 10.9 points to also end in positive territory.

Investors continued to await the end of the partial government shutdown which entered its 26th day— the longest such shutdown in history. Although, this did not have much of an impact on the markets, economists warn that effects of the shutdown might soon start showing on the economy.

Market watchers also closely followed news that federal prosecutors had launched a probe in to the China’s Huawei Technologies Co. The investigation is related to allegations that the Chinese company has been stealing trade secrets from America. Analysts opine that such developments might be negative ramifications for the U.S.- China trade negotiations.

May Survives Vote of No Confidence

Due to the rejection of British prime minister Theresa May’s Brexit plans by Mar 29, a vote of no confidence was initiated by the parliament which her government managed to survive. The defeat by a margin of 432-202 has been the biggest ever faced by any British government since the 1920s. Further, this development has also made it increasingly difficult for the country to leave the European Union (EU).

Economic Data

On the data front, the Fed’s Beige Book stated that of the 12 Federal Reserve districts, eight depicted modest to moderate growth in December 2018. The report also stated that many of the districts had become less optimistic due to volatility in the stock markets as well as rising interest rates.

Meanwhile, the National Association of Home Builders reported that its monthly confidence index rebounded from a three-year low and gained 2 points to come in at 58 in January. This increase followed two straight months of declines.

Stocks That Made Headlines

CSX Q4 Earnings Meet Estimates, 2019 Revenue Guidance Soft

CSX Corporation CSX delivered fourth-quarter 2018 earnings meeting the Zacks Consensus Estimate. (Read More)

Kinder Morgan Q4 Earnings Meet Mark, Revenues Lag

Kinder Morgan Inc KMI posted fourth-quarter 2018 earnings per share from continuing operations, which were in line with the Zacks Consensus Estimate. (Read More)

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