Stock Market News For October 20, 2016

Benchmarks closed in the green for the second straight session on Wednesday following rally in oil prices and encouraging earnings results from Morgan Stanley (NYSE:MS). Better-than-expected decline in crude inventories boosted oil prices, which in turn had a positive impact on energy stocks. Additionally, the Fed’s Beige Book stated that the overall U.S. economy is expanding at a moderate pace.

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 0.2%, to close at 18,202.62. The S&P 500 also rose 0.2% to close at 2,144.29. The tech-laden Nasdaq Composite Index closed at 5,246.41, gaining 0.1%. The fear-gauge CBOE Volatility Index (VIX) decreased 5.7% to settle at 14.41. A total of around 5.97 billion shares were traded on Wednesday, lower than the last 20-session average of 6.45 billion shares. Advancers outpaced declining stocks on the NYSE. For 68% stocks that advanced, 29% declined.

What Boosted the Benchmarks?

The U.S. Energy Information Administration (EIA) reported that the U.S. commercial crude oil inventories fell 5.2 million barrels to 468.7 million for the week ended October 14, in contrast to analysts’ projections of an increase of 2 million barrels. It also came wider than API’s projection of 3.8 million barrels decline.

Additionally, Saudi Arabia's oil minister Khalid Al-Falih said that non-OPEC nations are also “showing willingness to join” the effort to freeze production. Al-Falih added that “many countries have said they are willing to not only freeze, but cut at healthy levels that will match whatever is going to happen by OPEC."

WTI crude rose 2.5% to $51.60 per barrel, settling at its best level since July 14, 2015. Brent crude also advanced 1.9% to $52.67 a barrel, reaching its second best settlement so far in 2016. Increase in oil prices led the Energy Select Sector SPDR (XLE (NYSE:XLE)) to gain 1.4%, which emerged as the best performer among the S&P 500 sectors. Both the two Dow components, Chevron Corporation (NYSE:CVX) (CVX) and Exxon Mobil Corporation (NYSE:XOM) (XOM) gained 0.5%. While Chevron have a Zacks Rank #2 (Buy), Exxon Mobil possess a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here .

Moreover, Morgan Stanley’s (MS) shares rose 1.9% after the company reported third quarter earnings per share and revenues, which surpassed the Zacks Consensus Estimates. (Read More: Morgan Stanley Tops Q3 Earnings, Bond Trading Surges )

Gains in Morgan Stanley led the Financial Select Sector SPDR (XLF) to advance 0.9% and emerge as the second biggest gainer among the S&P 500 sectors. Some of its key holdings including Goldman Sachs Group (NYSE:GS), Inc. (GS) and Bank of America Corporation (NYSE:BAC) ( BAC) rose 1.1% and 1.3%, respectively.

Beige Book Indicates Modest Economic Expansion

Fed’s Beige Book showed that most of the districts indicated “a modest or moderate pace of expansion” during the period of late August to early October. As per the Beige Book, “labor market conditions remained tight” with stable growth in wage and employment. Also, outlooks for most of the districts “were mostly positive.” However, some districts showed concerns over the “uncertainty surrounding the upcoming presidential elections.”

Economic Data on Focus

According to the U.S. Department of Commerce, housing starts fell 9% in September from August to a seasonally adjusted annual rate of 1,047,000, missing the consensus estimate of 1,172,000, reaching its lowest level in last one and a half year. However, building permits went up 6.3% from August to a seasonally adjusted annual rate of 1,225,000 last month. It was also higher than the consensus estimate of 1,160,000.

Stocks That Made Headlines

BB&T (NYSE:BBT) Beats on Q3 Earnings & Revenues, Costs Rise

A notable rise in the top line drove BB&T Corporation’s (BBT) third-quarter 2016 adjusted earnings, which beat the Zacks Consensus Estimate. ( Read More)

U.S. Bancorp Q3 Earnings Rise on Mortgage Strength

Following solid growth in mortgage banking revenues, U.S. Bancorp’s (USB) third-quarter 2016 earnings increased 3.7% year over year and came in line with the Zacks Consensus Estimate. ( Read More)

M&T Bank (NYSE:MTB) Beats on Q3 Earnings as Revenues Improve

M&T Bank Corporation’s (MTB) net operating earnings for third-quarter 2016 handily beat the Zacks Consensus Estimate and improved 9% year over year. ( Read More)

American Express (NYSE:AXP) Beats on Q3 Earnings, Guides Up

American Express Company (AXP) reported third-quarter 2016 operating earnings per share (EPS) which beat the Zacks Consensus Estimate. (Read More)

Citrix Q3 Earnings and Revenues Beat; View Raised

Citrix Systems Inc. (CTXS) posted encouraging results in the third quarter of 2016, both in terms of earnings and revenues. (Read More)

Northern Trust (NASDAQ:NTRS) Reports Q3 Earnings as Expected

Northern Trust Corporation’s (NTRS) third-quarter 2016 earnings per share were in line with the Zacks Consensus Estimate. Results benefited from improved revenues. ( Read More)

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