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Dec 21, 2016

Wall Street at Close Report on December 21, 2016: Stock markets Retreats off Records as Dow Falters in Quest for 20,000

marketwatch.com

Anora Mahmudova, Ryan Vlastelica



U.S. stocks closed modestly lower Wednesday, with the Dow industrials and Nasdaq Composite retreating from all-time highs set a day earlier.

The Dow Jones Industrial Average DJIA, -0.16% DJIA, -0.16% ended 32.66 points, or 0.2%, lower at 19,941.96, as the 20,000 milestone eluded the benchmark for yet another session. Still, the blue-chip gauge is up 14.4% year to date, having outperformed the broader S&P 500 index by more than 3 percentage points.
Read: As Dow climbs to 20,000, its ETF sees big inflows and trading
The S&P 500 index SPX, -0.25%  lost 5.58 points to 2,265.18, a decline of 0.1%, with eight of its 11 main sectors finishing in negative territory. Real-estate stocks sold off sharply, ending 1.3% lower. But it was losses in a much bigger health-care sector that weighed on the main indexes.
The Nasdaq Composite Index COMP, -0.23%  declined 12.51 points, or 0.2%, to 5,471.43, weighed down by a decline in biotechnology shares. The iShares Nasdaq Biotechnology ETF IBB, -1.13%  was down 1.1%.
The market traded in a relatively tight range amid thinning volumes ahead of the December holidays.
Highlighting that muted action, the CBOE Volatility Index VIX, -1.57% also known as the Wall Street’s “fear gauge” fell to its lowest level in 16 month, below 11 earlier. It settled at 11.30 by late afternoon, suggesting that the market isn’t betting on sharp pullbacks in the S&P 500 before the end of the year.
Read: Wall Street’s ‘fear gauge’ implies that few are prepped for a stock-market shock
Wall Street has been in rally mode since the U.S. presidential election on Nov 8, with investors wagering that the pro-business policies of President-elect Donald Trump will spur faster economic growth.
“The common wisdom today is that the stock market honeymoon will last until the inauguration, and then hit a speed bump. I am not sure it will last that long,” wrote James M. Meyer, chief investment officer at Tower Bridge Advisors in a note to clients.
“Big moves tend to last 6-8 weeks before correcting. That suggests maybe the start of the New Year will be a reality check time,” Meyer added.
Here's what Trump means for health care

President-elect Donald Trump's vow to "repeal and replace" the Affordable Care Act has created uncertainty in the health-care sector. Here's what Trump's policies mean for the future of health care.
The recent market gains have fueled a rotation from bonds and into stocks, with inflows into equity funds since the election reaching $63 billion last week, according to a report from Bank of America Merrill Lynch. In comparison, stock-fund outflows tallied $151 billion between January and October.
In the latest economic data, sales of previously-owned homes rose 0.7% in November as lean inventory and higher prices continue to choke the housing market. Shares of home builders were among the best performers, with the S&P 500 Homebuilding exchange-traded fund XHB, +0.49% gaining 0.5%.
Movers and shakes: Shares in Nike Inc.  NKE, +0.98%  finished up 1% after the sportswear maker reported better-than-expected earnings ahead of forecasts. The company is a Dow component and the worst-performing member of the blue-chip index of the year, down 16%.
Accenture PLC ACN, -5.00% shares tumbled 5%, a day after it reported first-quarter revenue that missed expectations and delivered a downbeat outlook.
Shares of Finish Line Inc. FINL, -8.74%  sank 8.7% after the athletic shoe retailer reported fiscal third-quarter results that missed expectations and offered a weak outlook.
Winnebago Industries Inc. WGO, -4.44%  slid 4.4% despite the recreational vehicle seller beating first-quarter profit and sales forecasts.
FedEx Corp. FDX, -3.33%  dropped 3.3% after the shipping giant late on Tuesday posted a rise in earnings, but missed analyst forecasts.
Coca-Cola Co. KO, -0.22%  closed 0.2% lower. The drinks company said it is buying a 54.5% stake in Coca-Cola Beverages Africa from Anheuser-Busch InBev SA ABI, -0.49% BUD, +0.61%  for $3.15 billion. Shares of Anheuser rose 0.6%.
Shares of Monster Beverage Corp. MNST, +4.20%  rallies 4.2% after Jefferies raised the company’s rating to buy from hold.
Other markets: The dollar slipped against most other major currencies, pulling the ICE Dollar DXY, -0.21%  down from a 14-year high. The index was down 0.3% at 102.96.
Gold futures GCG7, -0.04% were unchanged, at $1,133 an ounce. Oil prices CLG7, +0.10% were 1.4% lower at $52.52 a barrel.
European stock markets closed lower, with liquidity concerns over Banca Monte dei Paschi di Siena SpA BMPS, -12.08%  pulling the banking sector lower.
Asia markets closed mixed.
—Sara Sjolin contributed to this article.