Stock Market News For December 06, 2016

Benchmarks started the week on a higher note with the Dow finishing at another all-time record high after concerns regarding Italian referendum were offset by solid domestic economic data. Meanwhile, financial stocks rebounded from Friday’s losses following rising expectations of December hike to emerge as one of the biggest gainers. Moreover, Trump induced rally also continued to boost investor sentiment.

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) rose more than 0.2%, to close at 19,216.24. The S&P 500 increased 0.6% to close at 2,204.71. The tech-laden Nasdaq Composite Index closed at 5,308.89, gaining 1%. Meanwhile, the fear-gauge CBOE Volatility Index (VIX) plunged nearly 16.1% to settle at 11.85. A total of around 7.1 billion shares were traded on Monday, higher than the last 20-session average of 7.9 billion shares. Advancers outpaced declining stocks on the NYSE. For 69% stocks that advanced, 28% declined.

Encouraging Services Data Offset Italian Referendum Concerns

The Prime Minister of Italy, Matteo Renzi, announced that he is submitting his resignation after 60% of Italians voted “no” on a referendum Renzi proposed for constitutional reform in the country on Sunday. It is speculated that this may lead to political turmoil in the country, which in turn might have a negative impact on the Eurozone. It also raised chances of exit of the nation from the common currency bloc. Though it had a negative impact on investor sentiment, but it didn’t last longer as encouraging services data cheered investors.

The ISM Services Index last month came in at 57.2% compared earlier month’s reading of 54.8%, witnessing the highest rate of growth since Oct 2015. It also came higher than the consensus estimate of 55.7%. Improvement in hiring is speculated to be one of the primary reasons behind the better-than-expected expansion of services sector. Separately, IHS Markit’s services index also came in encouraging. IHS Markit’s non-manufacturing index came in over 50% for the ninth straight sessions in November.

These encouraging data also boosted rate hike chances next month further. In an interview, William Dudley, New York Federal Reserve President said that he will support a gradual pace of rate hikes if the U.S. economy continues witness significant improvement. Increase rate hike chances in addition to Trump induced rally helped the Financial Select Sector SPDR (XLF) to gain 1.2% yesterday. It was also the best performer among the broader S&P 500 sectors.

Key stocks from the sector including Citigroup Inc (NYSE:C). (C), The Goldman Sachs Group (NYSE:GS), Inc. ( GS) and Bank of America Corporation (NYSE:BAC) (BAC) gained 2.3%, 2.3% and 2.9%, respectively. Bank of America, Goldman Sachs and Citigroup hold Zacks Rank #1 (Strong Buy), Zacks Rank #2 (Buy) and Zacks Rank #3 (Hold), respectively. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here .

Stocks That Made Headlines

Hawaiian Holdings Up on Improved November Traffic, Q4 View

Hawaiian Airlines, Inc. (HA) – a subsidiary of Hawaiian Holdings, Inc. – posted a significant rise in air traffic in the month of November. Traffic – measured in revenue passenger miles (RPMs) – came in at 1.25 billion, up 9% from 1.15 billion recorded a year ago. (Read More)

Kinder Morgan (NYSE:KMI) Offers Financial Projections for 2017

Kinder Morgan Inc. (KMI) recently announced its preliminary financial forecasts for 2017. ( Read More)

General Mills (NYSE:GIS) Plans to Restructure, Cut 400 to 600 Jobs

General Mills Inc. (GIS) announced a restructuring plan at the close of its 150th anniversary celebrations. (Read More)

Chesapeake (CHK) to Divest Part of Haynesville Properties

Chesapeake Energy Corporation (CHK) recently inked a divestment agreement for part of its acreages in Haynesville Shale area. (Read More)

Hertz (HTZ) Inks Deal with Localiza, Growth Efforts on Track

Keeping pace with its efforts to drive business via collaborations, Hertz Global Holdings, Inc. (HTZ) entered a strategic deal with South America’s biggest car rental firm Localiza, which is a leading name in the Brazilian market. ( Read More)

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