Stock Market News For December 08, 2016

The Trump induced rally continued to boost major benchmarks to finish at all-time record highs on Wednesday offsetting the decline in healthcare stocks. Though Trump’s comment about putting a brake on drug prices led the healthcare sector to end with losses, substantial broad based gains later in the day helped investors shrug off the drop in healthcare stocks.

Also, strong increases in transportation stocks boosted the Dow Jones Transportation Average (DJT) to finish at an all-time record high level. While the Dow and S&P 500 ended at their respective all-time record highs, the Nasdaq finished at a level close to the same.

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 1.6%, or 297.84 points, to close at 19,549.62. The S&P 500 increased 1.3% to close at 2,241.35. The tech-laden Nasdaq Composite Index closed at 5,393.76, gaining more than 1.1%. However, the fear-gauge CBOE Volatility Index (VIX) rose nearly 3.7% to settle at 12.22. A total of around 8.2 billion shares were traded on Wednesday, higher than the last 20-session average of 8 billion shares. Advancers outpaced declining stocks on the NYSE. For 74% stocks that advanced, 33% declined.

Broad Based Rally Offset Decline in Healthcare

Healthcare stocks took a major hit on Wednesday after the Time’s cover story “Person of the Year” highlighted that U.S. President-elect Trump had declared strong intentions to reduce drug prices. According to the story, Trump said: “I’m going to bring down drug prices… I don’t like what has happened with drug prices.” This led the iShares Nasdaq Biotechnology ETF (IBB) to plunge 2.9%, which in turn had a negative impact on the Nasdaq.

The Health Care Select Sector SPDR (XLV) also declined 0.9% and emerged as the only decliner among the broader S&P 500 sectors. Key stocks from the sector including Celgene Corporation (NASDAQ:CELG) (CELG), Biogen (NASDAQ:BIIB) Inc. (BIIB) and Amgen Inc (NASDAQ:AMGN). (AMGN) lost 4%, 2% and 2.7%, respectively.

However, strong gains in technology stocks helped the Nasdaq to rebound from early losses and post healthy gains yesterday. The Technology Select Sector SPDR (XLK) rose 1.9% and was one of the biggest gainers among the S&P 500 sectors. Key stocks from the sector including Apple Inc (NASDAQ:AAPL). ( AAPL), Microsoft Corporation (NASDAQ:MSFT) (MSFT) and Alphabet (NASDAQ:GOOGL) Inc. (GOOGL) gained 1%, 2.4% and 2%, respectively. All of these tech behemoths carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here .

Separately, strong gains in transportation stocks also played a vital role in boosting markets on Wednesday. The Dow Jones Transportation Average (^DJT) gained 2.5% to ended at an all-time high level of 9,371.61. Key stocks from this sector including FedEx Corporation (NYSE:FDX) ( FDX), United Parcel Service (NYSE:UPS), Inc. (UPS) and Union Pacific Corporation (NYSE:UNP) (UNP) gained 1.7%, 1.8% and 3.1%, respectively.

Meanwhile, investors also kept a close watch on today’s European Central Bank (ECB) policy meeting and next week’s Fed’s policy meeting. While the majority expects that the ECB will extend in its bond-purchasing program, the Fed is widely speculated to raise the key interest rate in its upcoming policy meeting.

Stocks That Made Headlines

Lululemon Tops Q3 Earnings, Ups View; Stock Gains

After delivering back-to-back quarters of in-line earnings, Lululemon Athletica Inc. (LULU) came out with robust results for third-quarter fiscal 2016. ( Read More)

Costco (NASDAQ:COST) Earnings and Revenues Miss Estimates in Q1

Costco Wholesale Corporation (COST) delivered a negative earnings surprise in the first quarter of fiscal 2017. (Read More)

Greif Lags Q4 Earnings Estimates, Initiates FY17 View

Greif, Inc. (GEF) reported adjusted earnings per share in fiscal fourth-quarter, which fell short of the Zacks Consensus Estimate. ( Read More)

Western Digital (NASDAQ:WDC) Stock Rises on Upbeat Q2 Guidance

Western Digital Corporation (WDC) jumped during yesterday’s trade after the company raised its forthcoming quarter’s outlook. (Read More)

American Tower to Buy CyCSA, Eyes Argentina Market

American Tower Corp. (AMT) recently announced the acquisition of Argentina-based Comunicaciones y Consumos, SA (CyCSA). ( Read More)

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