Stock Market News For June 30, 2016

Benchmarks finished in the green on Wednesday for the second straight session following strong oil price rally and reduced “Brexit” concerns. Oil prices increased following a wider-than-expected fall in domestic crude inventories and production disruptions in Norway and Venezuela. “Brexit” woes were diminished which along with rising oil prices helped all key indexes advance more than 1.5% yesterday. The S&P 500 posted best two-session gains in last four months. Both the large-cap index and Dow registered year-to-date gains.

For a look at the issues currently facing the markets, make sure to read today’s Ahead of Wall Street article.

The Dow Jones Industrial Average (DJI) increased 1.6%, or 284.96 points to close at 17,694.68. The S&P 500 rose 1.7% to close at 2,070.77. The tech-laden Nasdaq Composite Index closed at 4,779.25, gaining 1.9%. The fear-gauge CBOE Volatility Index (VIX) decreased 11.3% to settle at 16.64. A total of around 8 billion shares were traded on Wednesday, higher than the last 20-session average of 7.5 billion shares. Advancers significantly outpaced declining stocks on the NYSE. For 84% stocks that advanced, 14% declined.

Oil prices continued to rise after the U.S. Energy Information Administration (EIA) reported that U.S. commercial crude oil inventories fell by 4.1 million barrels to 526.6 million for the week ended June 24. U.S. crude inventories registered their sixth straight weekly decline. This was wider than analysts’ forecasts of a decrease of 2.4 million barrels. It was also wider than a decrease of 3.9 million barrels reported by the American Petroleum Institute (API) a day earlier.

Moreover, recent oil workers strikes in Norway continued to weigh on its crude output. Also, refiners and oil producers in Venezuela struggled to maintain production following equipment shortages and power interruptions. Both WTI and Brent crude rose 4.1% and 4% to $49.88 a barrel and $50.61 per barrel, respectively.

Increase in oil prices led the Energy Select Sector SPDR (XLE (NYSE:XLE)) to increase 1.9%. Key energy stocks including, Murphy Oil Corporation (NYSE:MUR) (MUR), Transocean Ltd (NYSE:RIG). (RIG), ConocoPhillips (NYSE:COP) ( COP), Halliburton Company (NYSE:HAL) (HAL) and EOG Resources (NYSE:EOG), Inc. (EOG) rose 6.4%, 5.3%, 4.7%, 3.1% and 2.1%, respectively. Dow components Exxon Mobil Corporation (NYSE:XOM) ( XOM) and Chevron Corporation (NYSE:CVX) (CVX) increased 1.7% and 1.8%, respectively.

Additionally, reduced “Brexit” fears also had a broad-based positive impact on the U.S. markets. The Financial Services Select Sector SPDR (XLFS) rose 2.6% and was the best performer among the S&P 500 sectors. Top holdings from this sector such as Bank of America Corporation (NYSE:BAC) ( BAC), Citigroup Inc (NYSE:C). (C) and Wells Fargo & Company (NYSE:WFC) (WFC) advanced 3.9%, 4.2% and 1.9%, respectively. Dow components JPMorgan Chase & Co (NYSE:JPM) ( JPM) and Goldman Sachs Group (NYSE:GS), Inc. (GS) increased 2.8% and 2.2%, respectively. The Financials Select Sector SPDR (XLF) also advanced 2.3%.

In economic news, the National Association of Realtors (NAR) reported that the Pending Home Sales Index decreased 3.7% from April to 110.8 in May, declining last month after three consecutive months of gains. Last month’s increase was also wider than the consensus estimate of 2.4% decline. The index fell year-over-year for the first time since Aug 2014.

Although, the U.S. Department of Commerce reported that personal income and disposable personal income (DPI) each increased by 0.2% to $37.1 billion and $33.9 billion, respectively in May. This was lower compared to the 0.5% increase for each metric recorded in April.

Further, personal spending increased 0.4% in May, registering its second straight monthly increase and was in line with the consensus estimate. However, this was less than April’s record 1% gain.

Also, the U.S. Department of Commerce also reported that the personal consumption expenditure price index (PCE) rose 0.3% in May, lower than April’s increase of 0.8%. However, core PCE increased 0.2%, in line with the consensus estimate and April’s reading.

In earnings news, shares of NIKE, Inc. (NKE) increased 3.8% after reporting fiscal fourth quarter diluted earnings per share of $0.49, beating the Zacks Consensus Estimate of $0.48 per share. Its quarterly revenues came in at $8.24 billion, rising 6% year-over-year, but missing the Zacks Consensus Estimate of $8.261 billion.