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Jul 25, 2016

Wall Street at Close Report on July 25, 2016, by CNBC: Stocks Close Slightly Lower as Oil Slide Weighs

Evelyn Cheng

U.S. stocks closed lower in light volume trade Monday, with energy stocks weighing as oil prices briefly hit their lowest in nearly three months.

Chevron, Exxon Mobil and UnitedHealth contributed the most to declines in the Dow Jones industrial average, which briefly fell 100 points. The Dow is up about 3 percent for the month so far.

"I think everyone is really waiting for a big week — big week for earnings, big week for monetary policy," said Jeremy Klein, chief market strategist at FBN Securities.

"Crude is continuing to get sold and no one's talking about it," he said.
U.S. crude oil futures settled at $43.13, down $1.06, or 2.40 percent, weighed by concerns about oversupply. Earlier, WTI briefly fell below $43 a barrel to hit its lowest since late April. Energy held 2 percent lower as the greatest declining S&P 500 sector.
Genscape data pointed to an inventory rise of 1.1 million barrels at the Cushing, Oklahoma delivery base for U.S. crude futures in the week to July 22, Reuters said, citing traders who saw the numbers.
Luana Siegfried, energy research associate at Raymond James, attributed Monday's decline in oil prices to profit-taking, investor concerns about oversupply, and recent dollar strength. She expects oil to near $60 a barrel sometime in the third quarter.
Consumer discretionary tried for gains, with Outerwall jumping 11.5 percent and Nordstrom rising 4.5 percent to lead advancers. The SPDR S&P Retail ETF (XRT) traded 1 percent higher.
Redbox owner Outerwall announced it would be bought for $1.6 billion by funds managed by Apollo Global Management.

"In general people are realizing (the retail stocks have) been beaten down a little too much," said Ilya Feygin, senior strategist at WallachBeth Capital.
The 2-year note yield was higher near 0.73 percent after the Treasury auctioned $26 billion in 2-year notes at a high yield of 0.760 percent. The bid-to-cover ratio, an indicator of demand, was 2.52, well below a recent average of 2.96.
The 10-year yield held near 1.57 percent as of 2:45 p.m. ET.

U.S. stocks closed higher Friday for their fourth-straight week of gains. The S&P 500 set a fresh record close of 2,175.03, while the Nasdaq composite ended at its highest of the year so far at 5,100.16. Friday marked one of the lightest trade volume days of the year so far.

"We have seen the (economic) data outperform," said John Caruso, senior market strategist at RJO Futures. However, he noted concern about low trade volume.
Cash levels are at the highest levels since November 2001, according to the latest Bank of America Merrill Lynch Fund Manager Survey released last week.
No major economic data was due Monday. The Dallas Fed manufacturing index improved from June's negative 18.3 to minus 1.3 in July. Second-quarter GDP and housing data are among the major reports due later in the week.
The U.S. Federal Reserve is scheduled to conclude its two-day meeting Wednesday afternoon. While the central bank is not generally expected to raise rates, indications in the statement on the timing of the next hike will be key.

The Bank of Japan decision on monetary policy is expected overnight Thursday (Eastern Time). Traders will be watching for further accommodation and the reaction of the dollar-yen.
The U.S. dollar index traded mildly lower after on Friday posting its first five-week win streak since January. The euro was near $1.098 and the yen near 106 yen versus the greenback as of 12:14 p.m. ET. Pound sterling was near $1.31.
In corporate news, Verizon announced Monday plans to acquire Yahoo for $4.8 billion in cash.

Apple is scheduled to report earnings Tuesday after the close. 3M, Caterpillar, DuPont, McDonald's, United Technologies and Verizon are due to post results ahead of the open.
Major European indexes were mixed, with the STOXX Europe 600 Banks index about half a percent lower.
Asian stocks closed mostly higher, with the Shanghai composite and Hang Seng mildly higher but the Nikkei 225 a touch lower.
DJIA Dow Industrials 18492.85 -78.00 -0.42%
S&P 500 S&P 500 Index 2168.48 -6.55 -0.30%
NASDAQ NASDAQ 5097.63 -2.53 -0.05%
In afternoon trade Monday, the Dow Jones industrial average declined 104 points, or 0.56 percent, to 18,466, with Chevron leading decliners and Nike leading a few advancers.
The S&P 500 was off 10 points, or 0.46 percent, at 2,165, with energy leading nine sectors lower and consumer discretionary the only advancer.
The Nasdaq composite declined 8 points, or 0.15 percent, to 5,092.
The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, traded higher above 13.
About nine stocks declined for every five advancers on the New York Stock Exchange, with an exchange volume of 423 million and a composite volume of 2.0 billion in afternoon trade.
Gold futures for August delivery settled down $3.90 at $1,319.50 an ounce.
On tap this week:

Earnings: Kimberly-Clark, Rockwell Collins, Gilead Sciences, Ryanair, Sprint, Celanese, Las Vegas Sands, Texas Instruments, Canadian National Airways, Express Scripts, Eastman Chemical, Luxottica Group, Cadence Designs
Earnings: Apple, Caterpillar, Verizon, 3M, DuPont, United Technologies, McDonald's, Eli Lilly, BP, Twitter, KeyCorp, KKR, Freeport-McMoRan, Martin Marietta Materials, Paccar, United Health Services, Starwood Hotels, T. Rowe Price, LVMH, Valero Energy, Under Armour, JetBlue, Anadarko Petroleum, Chubb, Panera Bread, U.S. Steel
Two-day Fed meeting begins
9 a.m. S&P/Case-Shiller home prices
9:45 a.m. Services PMI
10 a.m. New home sales
10 a.m. Consumer confidence
1 p.m. $34 billion 5-year note auction
Earnings: Boeing, Coca-Cola, Comcast, Facebook, Amgen, State Street, Whole Foods, Groupon, GoPro, Cheesecake Factory, GlaxoSmithKline, Lumber Liquidators, Six Flags, Altria, Deutsche Bank, Fiat Chrysler, Statoil, Dr. Pepper Snapple, Ingersoll Rand, Hess, Corning, Nissan, Norfolk Southern, Nintendo, Southern Co, Anthem, Statoil, General Dynamics, Nasdaq OMX, Northrop Grumman, Mondelez
7 a.m. Mortgage applications
8:30 a.m. Durable goods; pending homes
11:30 a.m. $15 billion 2-year floating rate notes auction
2 p.m. FOMC rate decision
Earnings:, Alphabet, AstraZeneca, Bristol-Myers Squibb, Colgate-Palmolive, Celgene, Cigna, Total, MasterCard, Ford, Dow Chemical, Diageo, ConocoPhillips, Credit Suisse, Royal Dutch Shell, BNP Paribas, Hershey, HCA, Harley-Davidson, Marsh & McLennan, Marathon Petroleum, Potash, PG&E, TransCanda, Raytheon, Expedia, CBS, Samsung
8:30 a.m. Jobless claims; advance trade balance
1 p.m. $28 billion 7-year auction
Earnings: Exxon Mobil, Chevron, Merck, AB InBev, UPS, UBS, Sanofi, Xerox, CBOE Holdings, Philips 66, Cabot Oil, Barclays, Eni, Tenneco, Lexmark, CNA Financial
8:30 a.m. Q2 GDP
9:30 a.m. San Francisco Fed President John Williams
9:45 a.m. Chicago PMI
10 a.m. University of Michigan consumer sentiment
1 p.m. Dallas Fed President Rob Kaplan
*Planner subject to change.