Stock Market News For August 29, 2016

Benchmarks ended a choppy trading session mostly in the red on Friday as investors continued to grapple with the timing of a rate hike. While Fed Chairwoman Janet Yellen said that the case for hiking federal funds rate has gained in strength in “recent months”, Fed Vice-chairman Stanley Fisher also advocated a rate hike in the near term. The Dow and the S&P 500 ended in the red, while the Nasdaq somewhat defied the trend and closed in the green. Meantime, all the three major indexes notched their biggest weekly declines since Brexit.

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) decreased 0.3%, to close at 18,395.40. The S&P 500 dropped 0.2% to close at 2,169.04. The tech-laden Nasdaq Composite Index closed at 5,218.92, gaining 0.1%. The fear-gauge CBOE Volatility Index (VIX) soared 4% to settle at 14.18. A total of around 3.3 billion shares were traded on Friday on the NYSE. Decliners outpaced advancing stocks on the NYSE. For 63% stocks that declined, 35% advanced.

Stocks Decline after Yellen’s Comments

Investors continued to grapple with the timing of a rate hike on Friday. During the Jackson Hole economic symposium, Yellen asserted that the case for a rate increase is gathering steam, thanks to a solid labor market and positive outlook on economic activity and inflation. She said that concerns related to weak economic growth in the first half of the year and global turmoil have dissipated, mostly due to “solid” consumer outlays and a job market rebound following a slump in hiring in spring. Fischer had said that Yellen’s speech was “consistent” with a possible two rate hikes this year.

Utilities declined the most among the S&P 500 sectors since a rate hike will increase cost of capital and eventually decrease profitability. The Utilities Select Sector SPDR (XLU) dropped 2.1%, with two of its major components including NextEra Energy (NYSE:NEE), Inc. (NEE) and Duke Energy Corporation (NYSE:DUK) (DUK) decreasing 1.6% and 2.2%, respectively.

In economic news, the “second” estimate by the Bureau of Economic Analysis showed that first quarter output of goods and services increased at an annual rate of 1.1%, in-line with the consensus estimate. In the first quarter, real GDP increased 0.8%.

For the week, the Dow, the S&P 500 and the Nasdaq declined 0.8%, 0.7% and 0.4%, respectively. All the three indexes registered their largest weekly losses since the week ended June 24. Yellen’s remark that the case for an increase in short-term interest rates has strengthened dragged indexes down for the week.

Stocks Making Headlines Today

Sinopec’s 1H16 Profit Falls Y/Y as Production Declines

China Petroleum and Chemical Corporation’s (SNP) crude oil production decreased year over year, which eventually had a negative impact on its net profit. (Read More)

Yahoo Esports Inks Deal with ESL, to Develop New Games

In order to tap the potential in the emerging esports market, Yahoo! Inc (NASDAQ:YHOO). (YHOO) announced that Yahoo Esports has signed a two-year agreement with ESL. (Read More)

Will a Bidding War Start for SunEdison's Stake in TerraForm?

Golden Concord Holdings Ltd., the Chinese clean energy group, is planning to bid for SunEdison’s controlling stake in TerraForm Power Inc (TERP). (Read More)

Abbott Labs Sued by Alere over Pending $5.8B Acquisition

Alere Inc (ALR) announced that it has sued Abbott Laboratories (NYSE:ABT) (ABT) in an attempt to close the pending takeover worth $5.8 billion. (Read More)

V.F. Corp Refines Portfolio, Sells Contemporary Brands

VF Corp (VFC) completed the sale of its underperforming Contemporary Brands business to Israel’s Delta Galil Industries Ltd. (Read More)

Facebook’s Trending Feature to be Algorithmically Driven

Facebook Inc.’s (FB) trending feature will be more automated as the company contemplates lesser human intervention. (Read More)


NEXTERA ENERGY (NEE): Free Stock Analysis Report

DUKE ENERGY CP (DUK): Free Stock Analysis Report

CHINA PETRO&CHM (SNP): Free Stock Analysis Report

YAHOO! INC (YHOO): Free Stock Analysis Report

TERRAFORM POWER (TERP): Free Stock Analysis Report

ALERE INC (ALR): Free Stock Analysis Report

ABBOTT LABS (ABT): Free Stock Analysis Report

V F CORP (VFC): Free Stock Analysis Report

FACEBOOK INC-A (FB): Free Stock Analysis Report

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