Stock Market News For Feb 8, 2017

Markets ended marginally lower on Wednesday, paring gains that major benchmarks notched up earlier in the session. Such a reversal of gains was the largest for both the Dow and the S&P 500 in as many as two years. Meanwhile, Congressional leaders announced that they had worked out a budget deal for a period of two years in order to reach a conclusion to the ongoing tussle related to government spending and immigration laws.

The Dow Jones Industrial Average (DJI) decreased almost 0.1%, to close at 24,893.35. However, the S&P 500 fell 0.5% to close at 2,681.66. The tech-laden Nasdaq Composite Index closed at 7,051.98, losing 0.9%. A total of around 9.1 billion shares were traded on Wednesday, higher than the last 20-session average of 8 billion shares. Advancers outnumbered decliners on the NYSE by a 1.71 -to-1 ratio. On Nasdaq, a 1.33-to-1 ratio favored advancing issues.

What are the Benchmarks Doing?

The Dow lost 19.42 points to close in the red. The blue-chip index had a roller coaster journey, swinging more than 500 points during intraday trading. The index shot up 381 points earlier in the session only to decline 127 points later. This fluctuation is essentially the Dow’s largest reversal from a high, in terms of points, since August 2015.

The S&P 500 declined 13.5 points to end in the negative territory. Of the 11 major sectors of the S&P 500, nine ended in the red, with energy and technology leading the decliners. The Energy Select Sector SPDR ETF (XLE) and the Technology Select Sector SPDR ETF (XLK) pulled back 1.7% and 1.3%, respectively. The broader index had notched up a 1.2% gain earlier in the session only to end 0.5% lower, charting out its largest percentage reversal in a single day since February 2016.

A surge in the 10-year Treasury yield to 2.9% was the primary trigger for losses for the broader markets, reflected in the losses for the two major benchmarks, which pulled back from early gains.

Meanwhile, Nasdaq gave up 0.9%, following a dip in the shares of some of the big players of the tech sector. Shares of Apple AAPL, Amazon AMZN, Facebook FB and Alphabet GOOGL declined 2.1%, 1.8%, 2.2% and 2%, respectively. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Congress Strikes a Two-year Budget Deal

Leaders from Congress announced on Wednesday that they had agreed upon a two-year budget deal to end the uncertainty regarding government spending and immigration laws. Such tensions had led to a government shutdown earlier in the month. Agreement on the budget legislation came months after both Republicans and Democrats tried to reach a consensus on the deal.

The deal seeks to increase federal spending by $300 billion over the next two years. This would be above the ceiling that was imposed by in 2011. The deal increases military spending by $80 billion over the remainder of the fiscal year through September and further by $85 billion in fiscal 2019. This comes over and above the emerging war funds of about $140 billion.

The new agreement also seeks to extend funding for the Children’s Health Insurance Program by 10 years and spare another $80 billion for disaster relief funding. Moreover, the legislation also beefs up non-defense spending by $63 billion for this year and by $68 billion for 2019.

Stocks That Made Headlines

Hain Celestial Q2 Earnings Miss by a Penny, Stock Down

The Hain Celestial Group, Inc. HAIN concluded second-quarter fiscal 2018 on a dismal note.  (Read More)

Infinera Betters Q4 Earnings Estimates, Revenues Beat

Infinera Corp. INFN reported better-than-expected financial results in the fourth quarter of 2017. (Read More)

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