Stock Market News For Feb 20, 2018

Markets closed mostly higher on Friday. While the Dow and the S&P 500 eked out gains to post their sixth straight session of gains, the Nasdaq slumped and ended in the negative territory. However, all three major benchmarks posted their biggest weekly closes.

However, gains were curbed after Special Counsel Robert Mueller indicted a group of Russian nationals and a few entities from the country regarding their involvement in the U.S. Presidential Elections of 2016. Meanwhile, housing starts surged to its highest levels since the financial crisis of 2008. Also, building permits rose to a 66-month high. Markets remained closed on Monday due to the observance of President's Day.

The Dow Jones Industrial Average (DJI) increased about 0.1%, to close at 25,219.38. However, the S&P 500 rose a little more than a point to close at 2,732.22. The tech-laden Nasdaq Composite Index closed at 7,239.47, losing 0.2%. The fear-gauge CBOE Volatility Index (VIX) increased 7.8% to close at 20.63.

A total of around 7.1 billion shares were traded on Friday, lower than the last 20-session average of 8.5 billion shares. Advancers outnumbered decliners on the NYSE by a 1.43-to-1 ratio. On Nasdaq, a 1.34-to-1 ratio favored advancing issues.

How Did the Benchmarks Perform?

The S&P 500 added a meager 1.02 points to close in the green, extending its streak of gains for the sixth straight session. Moreover, the broader index posted its biggest weekly increase in the last five years. Of the 11 major segments of the S&P 500, six ended in the green, with utilities and healthcare leading the advancers. The Utilities Select Sector SPDR ETF (NYSE:XLU) and the Health Care Select Sector SPDR ETF (NYSE:XLV) increased 0.9% and 0.7%, respectively.

The Dow amassed 19.01 points to finish in the positive territory for the sixth straight session. The blue-chip index rallied as much as 232.1 points, marking its highest level during the session. Gains for the Dow were also supported by an increase in the shares of Pfizer Inc. (NYSE:PFE) , which gained 1.5% on Friday. Meanwhile, the Dow is currently about 5.3% below its all-time high. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

However, the Nasdaq declined 17 points to finish in the negative territory, ending its five-day streak of gains. The tech-heavy index had surged 0.7% earlier in the session. The Nasdaq is currently trading 3.6% below its all-time record.

13 Russians Indicted for Meddling with Elections

U.S. Special Counsel Robert Mueller charged about 13 Russian Nationals and three entities from the country for meddling with the 2016 Presidential Elections. Russian company Internet Research Agency was identified as one of the entities involved in the scam.

The report also mentioned that the indicted supported President Trump’s campaign by denigrating candidate Hillary Clinton’s campaign in the run up to the 2016 elections. Such developments weighed heavily on the markets.

Economic Data

Housing Starts for the month of January came in at 1,326,000, surpassing the estimate of 1,232,000. Such an increase by about 10% has been the highest since the financial crisis of 2008.

Meanwhile, building permits for the month of January rose 1,396,000 to a 10 and a half year high. The consensus estimate for the period was 1,292,000. Majority of the new permits came from the North, South and West.

Weekly Roundup

For the week, the Dow, the S&P 500 and the Nasdaq gained 4.3%, 4.3% and 5.3%, respectively. While this was the biggest weekly gain for the Dow since November 2016, it marked the S&P 500’s best weekly advance since January 2013. Meanwhile, the Nasdaq posted its biggest weekly gain since December 2011.

President Trump signed into law a bipartisan budget deal that will provide a massive spending boost to the Pentagon and U.S. infrastructure. This in turn had a positive impact on key indexes. The Dow and the S&P 500 were both up over 4% for the year and are on the way to post their biggest weekly increases since November 2016. Additionally, the Nasdaq has increased more than 5% for the year.

Markets managed to rebound after declining initially following a better-than-expected consumer prices report, a key inflation metric. Strong earnings season and steady economy led all the three key indexes to shrug off their yearly declines to close in positive territory.

Stocks That Made Headlines

Home Depot Keeps Earnings Beat Trend in Q4, Guides FY18

The Home Depot, Inc. (NYSE:HD) reported an upbeat fourth-quarter fiscal 2017, continuing with its five-year-long trend of beating earnings estimates. (Read More)

Food Deflation Hurts Companhia Brasileira Q4 Results

Companhia Brasileira de Distribuicao (NYSE:CBD) or Grupo Pao de Acucar reported fourth-quarter 2017 results, wherein adjusted net income from continuing operations came in down from the year-ago period. (Read More)

Sysco Buys Doerle Food Services to Widen Distribution in US

Sysco Corporation (NYSE:SYY) has acquired Doerle Food Services — a Louisiana-based food service distributor — to widen its US distribution network. This buyout is expected to capitalize on Sysco’s growth opportunities, thus strengthening its core business and maximizing customers’ value. (Read More)

Walmart's Q4 Earnings Miss Hurts Stock, Comps Up Again

Walmart Inc. (NYSE:WMT) posted fourth-quarter fiscal 2018 results, wherein both earnings and revenues improved year over year and the latter also exceeded the Zacks Consensus Estimate. (Read More)

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