Stock Market News For April 18, 2017

As geopolitical concerns eased out over the weekend, major indexes moved higher on Monday. North Korea failed to launch a ballistic missile, which reduced tensions among investors. After all, the communist regime threatened to use such weapons on the U.S. Vice President Mike Pence warned North Korea not to escalate tensions, while America is thinking of using economic sanctions against such a rogue nation.

Additionally, Treasury Secretary Steven Mnuchin’s encouraging comments on tax reforms helped stocks gain, while financials were boosted primarily due to strong first quarter earnings results.

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) gained 0.9% to close at 20,636.92. The S&P 500 rose 0.9% to close at 2,349.01. The tech-laden Nasdaq Composite Index closed at 5,856.79, gaining 0.9%. The fear-gauge CBOE Volatility Index (VIX) declined 7.6% to 14.74. A total of around 5.3 billion shares were traded on Monday, lower than the last 20-session average of 6.4 billion shares. Advancers outpaced declining stocks on the NYSE. For 72% stocks that advanced, 25% declined.

Geopolitical Worries

Investors remained focused on escalating tensions between U.S and North Korea following the visit of Mike Pence in Korean Peninsula’s demilitarized zone on Monday. Mike Pence warned North Korea not to escalate tensions between the two countries and called the recent U.S. military strikes on Afghanistan and Syria an example of U.S strength.

North Korea staged a military parade on Saturday as a show of force amid deteriorating relations between U.S. and North Korea. However, North Korea failed to launch a ballistic missile on Sunday. The failure of the missile launch over the weekend eased out some of the intensity of tensions between the two countries which had a positive impact on investor confidence. However, Investors kept a close watch on the tensed relationship between the two countries.

Financials boosted up by Banks

Financial closed higher following positive results from earnings season that kicked off last Friday with three major banks reporting their first quarter earnings report. Total earnings for major banks like JPMorgan (NYSE:JPM) , Citigroup (NYSE:C) and Wells Fargo (NYSE:WFC) are up 10.8% from the same period last year on 3.1% higher revenues, with 100% of the sector companies beating EPS estimates and 60% beating revenue estimates.

Some of the key holdings of the financial sector in S&P 500 including JPMorgan Chase and Wells Fargo & Co gained by 1.7% and 2.7% respectively. The broader Financial Select Sector SPDR (XLF) advanced 1.8%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Meanwhile, total earnings for 31 S&P 500 members are up 10.2% from the same period last year on 4.2% higher revenues, with 77.4% beating EPS estimates and 54.8% beating revenue expectations.Among other Wall Street giants, Goldman Sachs Group (NYSE:GS) and U.S. Bancorp (NYSE:USB) are scheduled to report their earnings this week.

Economic Data

As per New York Fed, the Empire State manufacturing survey declined to 5.2 in April from a two-year high of 16.4 in March. Retail sales declined in March for two consecutive months, posting their worst two-month stretch in two years. The decline is attributable to weak demand in automobile sector. Auto sales fell 1.2% declining for a third straight month. Moreover, gas and service station sales fell 1% because of lower fuel prices. However, retail sales increased 5.2% in March on year over year basis. On the other hand, Core retail sales increased 0.5% from February.

Stocks that made Headlines

J.B. Hunt Beats Q1 Earnings, Misses Sales Estimates

J.B. Hunt Transport Services Inc. (NASDAQ:JBHT) reported mixed first-quarter 2017 financial results. (Read More)

United Continental Beats on Q1 Earnings & Revenues

United Continental Holdings (NYSE:UAL) , which has been vehemently criticized for the passenger fiasco on flight 3411 on Apr 9, finally witnessed some good tidings with better-than-expected earnings and revenues in the first quarter of 2017. (Read More)

Netflix Q1 Earnings Beat, Revenues Miss Estimates

Netflix, Inc. (NASDAQ:NFLX) reported first-quarter 2017 earnings of 40 cents per share, easily beating the Zacks Consensus Estimate of 38 cents. (Read More)

UnitedHealth Q1 Earnings Beat on Membership Growth

UnitedHealth Group Inc. (NYSE:UNH) reported first-quarter net operating earnings per share of $2.37, comfortably beating the Zacks Consensus Estimate of $2.18 and increasing 31% year over year. (Read More)

Williams Partners Sells Stake in Williams Olefins for $2.1B

Williams Partners L.P. (NYSE:WPZ) recently announced that it has agreed to divest 100% of its membership interest in Williams Olefins LLC, to NOVA Chemicals for $2.1 billion in cash. (Read More)

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