Stock Market News For June 07, 2016

Benchmarks closed in the green on Monday after the Fed Chairwoman Janet Yellen said that most of the domestic economic data were favorable and indicated rate hikes this year. Oil prices also increased following production disruptions in crude pipeline in Nigeria. Rise in oil prices boosted the energy sector and eventually the S&P 500. The index reached at its highest settlement since Nov 3.

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 0.6%, or 113.27 points, to close at 17,920.33. The S&P 500 rose 0.5% to close at 2,109.41. The tech-laden Nasdaq Composite Index closed at 4,968.71, also gaining 0.5%. However, the fear-gauge CBOE Volatility Index (VIX) increased 1.3% to settle at 13.65. A total of around 6.4 billion shares were traded on Monday, lower than the last 20-session average of 6.9 billion shares. Advancers outpaced declining stocks on the NYSE. For 68% stocks that advanced, 29% declined.

Yesterday in the World Affairs Council of Philadelphia, the Fed Chairwoman Janet Yellen said that most of the U.S. economic data had been encouraging following which Fed will increase rate this year. However, Yellen did not provide any clue regarding the exact time period at which rate will be hiked.

Yellen said she saw “good reasons to expect that the positive forces supporting employment growth and higher inflation will continue to outweigh the negative ones." She added that although last month’s employment growth was “disappointing,” the overall domestic labor market data was quite favorable. Janet Yellen’s comments had a positive impact on the broader index.

Moreover, oil prices rose yesterday following disruptions in crude production in Nigeria. Militant attacks on oil pipeline in Nigeria resulted in a decline in crude output from an earlier 1.8 million barrels per day (bpd) to 1 million bpd. WTI crude rose 2.2% to $49.69 a barrel, settling at its highest level since July 21. Brent crude increased 1.8% to $50.55 per barrel, reaching its highest settlement since Oct 9.

Increase in oil prices led the Energy Select Sector SPDR (XLE (NYSE:XLE)) to increase 2.2%, registering its biggest percentage rise since April. XLE was the biggest gainer among the S&P 500 sectors. Key energy stocks including, Transocean Ltd (NYSE:RIG). (RIG), Chesapeake Energy Corporation (NYSE:CHK) (CHK), Halliburton Company (NYSE:HAL) (HAL ), Schlumberger Limited (SLB) and EOG Resources (NYSE:EOG), Inc. (EOG) advanced 14.7%, 11.7%, 4.8%, 4.6% and 2%, respectively. Dow components Exxon Mobil Corporation (NYSE:XOM) (XOM) and Chevron Corporation (NYSE:CVX) (CVX) increased 1.1% and 0.5%, respectively.

Additionally, the Materials Select Sector SPDR ETF (XLB) increased 1%. Key components from materials sector including CF Industries Holdings (NYSE:CF), Inc. (CF), Freeport-McMoRan Inc. (FCX), Alcoa Inc (NYSE:AA). ( AA), Ecolab Inc (NYSE:ECL). (ECL) and LyondellBasell Industries N.V. (LYB) rose 8.9%, 4.9%, 3.4%, 1.1% and 2.2%, respectively.

Separately, shares of Kite Pharma, Inc. (KITE) and Juno Therapeutics Inc. ( JUNO) increased 10.3% and 10.5%, respectively. Both the companies said that they will get necessary regulatory approvals on a certain immunotherapy treatment next year.

Gains in shares of both these two companies led the iShares Nasdaq Biotechnology (IBB) to increase 1.5%. Key holdings from the sector including Mylan (NASDAQ:MYL) N.V. (MYL), Illumina Inc (NASDAQ:ILMN). (ILMN) and Vertex Pharmaceuticals (NASDAQ:VRTX) Incorporated (VRTX) increased 4.5%, 1.4% and 2.3%, respectively. The Health Care Select Sector SPDR ETF (NYSE:XLV) rose by 0.5%.

Also, the shares of The Boeing Company (NYSE:BA) (BA) advanced 3.6% on news that Iranair might purchase more than 100 jets from the company. It was the biggest advancing company in the Dow.