Stock Market News For July 06, 2016

Benchmarks snapped four straight-session winning streak to finish in the red on Tuesday following renewed “Brexit” fears. Britain’s decision to “Leave” the European Union had led to global growth worries, which resurfaced yesterday. This in turn resulted in a decrease in oil prices and losses in financial sector. Also, bond yields throughout the globe registered record declines.

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) decreased 0.6%, or 108.75 points, to close at 17,840.62. The S&P 500 fell 0.7% to close at 2,088.55. The tech-laden Nasdaq Composite Index closed at 4,822.90, losing 0.8%. The fear-gauge CBOE Volatility Index (VIX) increased 5.5% to settle at 15.58. A total of around 6.9 billion shares were traded on Tuesday, lower than the last 20-session average of 7.7 billion shares. Decliners significantly outpaced advancing stocks on the NYSE. For 72% stocks that declined, 26% advanced.

Despite registering healthy gains last week, renewed “Brexit” fears pulled all the three key indexes downward on the first trading day of this week. Uncertainties over “Brexit” have raised global growth worries following which oil prices declined and bank stocks tumbled.

Oil prices fell following worries that global economic slowdown might hamper crude demand amid abundant supply of oil. Moreover, reports showed that crude inventories in the delivery hub of Cushing, Oklahoma have increased by 230,025 barrels for the week ended July 01. Strengthening dollar also weighed on oil prices yesterday. Both WTI and Brent crude slumped 5.1% and 5% to $46.60 a barrel and $47.96 per barrel, respectively.

Decrease in oil prices led the Energy Select Sector SPDR (XLE (NYSE:XLE)) to fall 2%, which emerged as the biggest decliner among the S&P 500 sectors. Key energy stocks including, Southwestern Energy Company (NYSE:SWN) (SWN), Murphy Oil Corporation (NYSE:MUR) (MUR), Chesapeake Energy Corporation (NYSE:CHK) (CHK), Halliburton Company (NYSE:HAL) (HAL) and ConocoPhillips (NYSE:COP) (COP) fell 10.4%, 7.9%, 6.3%, 4.5% and 4.2%, respectively. Dow components Exxon Mobil Corporation (NYSE:XOM) (XOM) and Chevron Corporation (NYSE:CVX) (CVX) decreased 0.9% and 0.6%, respectively.

Additionally, “Brexit” woes also weighed on the bank and financial stocks. It is speculated that weak global growth concerns may prolong the prevalence of low interest rates environment throughout the globe, which in turn may negatively impact the financial sector.

The Financial Services Select Sector SPDR (XLFS) fell 1.9% and was the second biggest loser among the S&P 500 sectors. Top holdings from this sector such as Bank of America Corporation (NYSE:BAC) (BAC), Citigroup Inc (NYSE:C). ( C) and Wells Fargo & Company (NYSE:WFC) (WFC) declined 2.8%, 3.3% and 1.7%, respectively. Dow components JPMorgan Chase & Co (NYSE:JPM) (JPM) and Goldman Sachs Group (NYSE:GS), Inc. (GS) decreased 2.8% and 2.6%, respectively.

Separately, safe-haven investment options like government bonds attracted investor attention in this uncertain scenario. Following which yield on both 30-year Treasury bond and 10-year Treasury bond touched record low of 2.15% and 1.357%, respectively.

In economic news, as per the U.S. Department of Commerce, new orders for manufactured goods decreased 1% in May. This was wider than the consensus estimate of 0.8% and in contrast to April’s reading of 1.8% increase.