Stock Market News For Jan 31, 2018

Benchmarks finished in negative territory on Tuesday following slump in both healthcare and energy stocks. Blue-chips like Amazon, Berkshire and JPMorgan announced that they will together form a healthcare company in order to cut related costs for their U.S. employees, which in turn weighed on the healthcare sector.

Additionally, recent increase in U.S. shale production led energy stocks downward. Moreover, rising bond yields had a broad-based negative impact on all the three key indexes. The S&P 500 experienced its worst one-day performance since August, 2017 and Dow witnessed its biggest one-day drop since last May.

How the Benchmarks Fared?

The Dow Jones Industrial Average (DJI) decreased 1.4%, or 361.90 points to close at 26,076.89. The S&P 500 fell 1.1% to close at 2,822.43. The tech-laden Nasdaq Composite Index closed at 7,402.48, losing 0.9%. The fear-gauge CBOE Volatility Index (VIX) increased 6.9% to close at 14.79, its highest level since August. A total of around 8.1 billion shares were traded on Tuesday, higher than the last 20-session average of 7.1 billion shares. Decliners outnumbered advancers on the NYSE by a 4.17-to-1 ratio. On Nasdaq, a 2.98-to-1 ratio favored declining issues.

What Moved the Benchmarks?

On Tuesday, e-commerce giant Amazon.com (NASDAQ:AMZN) made an announcement that together with Berkshire Hathaway Inc. (NYSE:BRKa) BRK.B and JPMorgan Chase (NYSE:JPM) a healthcare company will be built in order to cut costs for their U.S. employees and improve worker satisfaction. The goal of the partnership is to create a company with the sole intention of providing healthcare for its workforce, and the future entity will not aim to make a profit. (Read More)

Following this development, the Health Care Select Sector SPDR (XLV) fell 2.1%, becoming the worst performing sector in the S&P 500 for the session. The sector witnessed its highest one-day drop since last October. Dow components UnitedHealth Group Incorporated (NYSE:UNH) and Merck & Co., Inc. (NYSE:MRK) decreased 4.4% and 1.6%, respectively.

Additionally, on the earnings front, Pfizer, Inc. (NYSE:PFE) reported fourth-quarter adjusted earnings per share and revenues that beat their respective Zacks Consensus Estimate. However, shares of Pfizer fell after the pharma heavyweight expected its adjusted tax rate to be 17% in 2018, higher than what some of the investors anticipated. (Read More)

Oil Prices Dip Weigh On Energy Stocks

Oil prices fell on Tuesday after U.S. shale production recently came in at 9,878,000 barrels per day, its highest level since Jan 7, 1983, per the EIA. Both WTI and Brent crude prices decreased to 1.6% and 0.6% to settle at $64.50 per barrel and $69.02 a barrel, respectively.

Decrease in oil prices had an adverse impact on the Energy Select Sector SPDR (XLE (NYSE:XLE)), which slumped 2%, becoming the second worst performing sectors of the S&P 500. Some of its key components, including Chevron Corporation (NYSE:CVX) and Exxon Mobil Corporation (NYSE:XOM) declined 2.5% and 1.4%, respectively. Both the energy giants possess a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Separately, higher rate environment and optimism of a steady economic growth and higher inflation weighed on bond prices. Lower bond prices supported the 10-year U.S. Treasury yield, which increased from 2.695% to 2.725% on Tuesday, reaching its highest settlement in almost four years. Higher treasury yields also weighed on the broader equity markets.

Stocks That Made Headlines

C.H. Robinson Surpasses on Earnings & Revenues in Q4

C.H. Robinson Worldwide Inc.’s (NASDAQ:CHRW) fourth-quarter earnings per share and revenues beat their respective Zacks Consensus Estimate. (Read More)

Robert Half Q4 Earnings & Sales Top Estimates, Up Y/Y

Robert Half International Inc. (NYSE:RHI) came out with solid fourth-quarter 2017 results, wherein both top and bottom lines came ahead of the Zacks Consensus Estimate. (Read More)

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