Stock Market News For December 02, 2016

Benchmarks ended mostly lower on Thursday as investors ditched technology shares and scooped up shares of financial companies. Tech behemoths took a beating due to their substantial exposure towards overseas markets, which eventually made them more susceptible to the recent surge in U.S. dollar. Such stocks weighed down the S&P 500 and the Nasdaq, but, the Dow defied the broader market’s weakness and ended in the green. The blue-chip index managed to hit a record high with a lift from banks. Investors, meantime, digested a couple of positive economic data.

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 0.4%, to close at 19,191.93 after touching an intra-day high of 19,214.30. The S&P 500, on the other hand, declined 0.4% to close at 2,191.08. The tech-laden Nasdaq Composite Index closed at 5,251.11, decreasing 1.4%. The fear-gauge CBOE Volatility Index (VIX) soared 5.6% to settle at 14.07. A total of around 9.13 billion shares were traded on Thursday, higher than the last 20-session average of 7.96 billion shares. Decliners outpaced advancing stocks on the NYSE. For 60% stocks that declined, 37% advanced.

Tech Tanks, Banks Gain

Significant international exposure has made major tech companies vulnerable, thanks to a stronger dollar. The rising dollar will deny revenues of multinational companies that rely heavily on profits from overseas. While shares of Apple Inc (NASDAQ:AAPL). (AAPL) fell 0.9%, shares of almost all FANG stocks including Facebook (NASDAQ:FB), Inc. (FB), Amazon.com (NASDAQ:AMZN), Inc. (AMZN) and Google parent Alphabet (NASDAQ:GOOGL) Inc. (GOOGL) decreased 2.8%, 0.9% and 1.5%, respectively. Other notable losers included Micron Technology (NASDAQ:MU), Inc. (MU), Qualcomm (NASDAQ:QCOM) Inc. (QCOM) and Yahoo! Inc (NASDAQ:YHOO). (YHOO), whose shares tanked 5.4%, 5.8% and 3.4%, respectively. Sharp decline in tech stocks pulled both the S&P 500 and the Nasdaq.

Gains among bank stocks, however, helped the Dow close in positive territory. Shares of The Goldman Sachs Group (NYSE:GS), Inc. (GS) gained 3.4%, while the stock is up more than 24% since the U.S presidential election. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Bank stocks, in recent years, have been held back by heavy regulation and low interest rates. But, optimism surrounding the sector’s outlook is growing, thanks to Donald Trump’s victory in the. Trump’s intention to roll back regulations and lower administrative burden will stand in good stead for the banking industry. Tax reforms and uptick in infrastructure outlays, then again, will spur a rate hike, which bodes well with the banking industry (read more: 5 Stocks to Buy as Trump Raises Hopes for Banking Sector).

Positive Economic Reports

The ISM manufacturing index rose from October’s 51.9% to 53.2% in November, higher than the consensus estimate of 52.3%. U.S. construction spending, separately, increased in October to a seven-month high amid gains in home building and public outlays. The US Census Bureau of the Department of Commerce reported construction spending of $1.172.6 billion in October, up 0.5% from upwardly revised September estimate of $1,166.5 billion. However, this increase in the payout by builders on residential and nonresidential structures was less than the consensus estimate of an increase by 0.6%.

Stocks That Made Headlines

Zumiez Tops Q3 Earnings & Sales, View Hurts Stock

Keeping its positive earnings surprise trend alive for the fifth time, Zumiez Inc. (ZUMZ) delivered solid results for third-quarter fiscal 2016. Both the top and the bottom line grew year over year and topped estimates. (Read More)

ULTA Salon Rises after Solid Q3 Earnings Report

Shares of ULTA Salon, Cosmetics & Fragrance, Inc. (ULTA) jumped over 6% yesterday in the after-hour trading session following the company’s impressive third-quarter fiscal 2016 results. (Read More)

Weyerhaeuser Divests Cellulose Fibers Business for $2.2B

Weyerhaeuser Co. (WY) completed the divestiture of its Cellulose Fibers business to International Paper Company (NYSE:IP) (IP) for $2.2 billion cash, subject to post-closing modifications. (Read More)

Packaging Corporation Acquires Columbus Container

Packaging products manufacturer Packaging Corporation of America (PKG) has completed the acquisition of corrugated products producer, Columbus Container, Inc. for $100 million. (Read More)

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