- 12 января 2016, 18:10
- Zacks Investment Research
Benchmarks ended mixed on Monday with the Dow and the S&P 500 posting modest gains amid continuing slump in oil prices. Both the indexes’ gains were curtailed due to fall in energy shares which were adversely affected by declining oil prices. Meanwhile, decline in biotech stocks had a negative impact on the Nasdaq. The tech-laden index fell for the eighth consecutive session on Monday.
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The Dow Jones Industrial Average (DJI) gained 0.3% to close at 16,398.57. The Standard & Poor’s 500 (S&P 500) advanced 0.1% to close at 1,923.67. The tech-laden Nasdaq Composite Index closed at 4,637.99, decreasing 0.1%. The fear-gauge CBOE Volatility Index (VIX) plunged 10% to settle at 24.30. A total of around 9.1 billion shares were traded on Monday, higher than the last 20-session average of 7.3 billion. Decliners outpaced advancing stocks on the NYSE. For 63% stocks that declined, 34% advanced.
The Dow and the S&P 500 eked out small gains on Monday after posting their worst ever five-day start to a year. The Dow closed about 50 points higher, with 21 out of 30 components of the Dow finishing in positive territory. Additionally, 7 out of 12 sectors of the S&P 500 ended in the green.
The Consumer Staples Select Sector SPDR ETF (XLP) gained 0.9%, the highest among the S&P 500 sectors. Key consumer staples stocks including Wal-Mart Stores Inc. (WMT), The Procter & Gamble Company (PG), The Coca-Cola Company (KO), Philip Morris International, Inc. (PM) and Pepsico, Inc. (PEP) also increased 1.1%, 0.9%, 0.2%, 2.8% and 0.2%, respectively.
However, decline in energy and biotech stocks kept a lid on gains. Energy shares declined due to a fresh rout in oil prices. Oil prices plunge to a fresh 12 year low as investors expect China’s demand for oil to decline further in 2016. The WTI Crude plummeted 5.6% to settle at $31.41. Additionally, Brent Crude tanked 6.3% to close at $31.55.
The Energy Select Sector SPDR (XLE) declined 2.1% and was the biggest loser among the S&P 500 sectors. Dow components Exxon Mobil Corporation (XOM) and Chevron Corporation (CVX) dropped 1.3% and 1.7%, respectively. Other key stocks from the energy sector such as EOG Resources, Inc. (EOG), ConocoPhillips (COP) and Schlumberger Limited (SLB) decreased 2.8%, 5% and 0.4%, respectively.
The Materials Select Sector SPDR ETF (XLB) dropped 1.7% and was the second biggest loser among the S&P 500 sectors. Key stocks from the sector including E. I. du Pont de Nemours and Company (DD), Freeport-McMoRan Inc. (FCX), Monsanto Company (MON) and The Dow Chemical Company (DOW) decreased 3.3%, 20.3%, 0.6% and 1.9%, respectively.
Biotech stocks also declined on Monday, dragging the Nasdaq into negative territory. Shares of Celgene Corporation (CELG) plunged 5.5% after the company’s earnings guidance for this year disappointed investors. For 2016, Celgene expects earnings per share to be $5.50 to $5.70. However, the number was on the lower side of analysts’ expectations of $5.68.
Shares of other biotech stocks including Amgen Inc. (AMGN), Regeneron Pharmaceuticals, Inc. (REGN) and Biogen Inc. (BIIB) declined 2%, 2.2% and 0.7%, respectively. The iShares Nasdaq Biotechnology Index (IBB) dropped 3.5%, while the broader Health Care Select Sector SPDR (XLV) decreased 1.2%.
Meanwhile, investors focus on fourth-quarter earnings results. The total earnings for the S&P 500 index are expected to be down 7.4% from the same period last year on 4.7% lower revenues, the third quarter in a row of negative earnings growth for the index.
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DU PONT (EI) DE (DD): Free Stock Analysis Report
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