Stock Market News For Nov 13, 2018

U.S. stock markets plunged on Monday as record drop in shares of Apple and Goldman Sachs, and precipitous decline of crude oil pricesignificantly dented investor confidence. Moreover, Rising U.S. dollar index and lingering trade conflicts with China also weighed on investor sentiment. All three major stock indexes extended their losses after last Friday.

The Dow Jones Industrial Average (DJI) closed at 25,387.18, shedding 2.3% or 602.12 points. The S&P 500 Index (INX) declined 2% to close at 2,726.22. Meanwhile, the Nasdaq Composite Index (IXIC) closed at 7,200.87, dropping 2.8% or 206.03 points. A total of 7.30 billion shares were traded on Monday, lower than the last 20-session average of 8.41 billion shares. Decliners outnumbered advancers on the NYSE by 2.80-to-1 ratio. On the Nasdaq, decliners had an edge over advancers by 3.64-to-1 ratio. The CBOE VIX increased 13.4% to close at 19.64.

How Did the Benchmarks Perform?

The Dow ended in negative territory for the second straight day. Notably, 26 components of the 30-stock blue-chip index closed in the red while the remaining 4 finished in the green. The tech-laden Nasdaq Composite closed in negative territory for third successive days, due to weak performance of chip makers.

Meanwhile, the S&P 500 also closed in the red for third consecutive days. Technology Select Sector SPDR (XLK) and Energy Select Sector SPDR (XLE (NYSE:XLE)) are major losers dropping 3.5% and 2.1%, respectively. Notably, ten out of total 11 sectors of the benchmark index closed in the red while one finished in the green.

U.S. Crude Oil Price Records Longest Decline

On Nov 12, U.S. benchmark West Texas Intermediate (WTI) crude oil future price for December delivery settled at $58.86 a barrel. This was the eleventh straight loss for WTI crude prices, the longest slide since March 1983. Moreover, for the first time since February, WTI crude oil price settled below the key psychological barrier of $60.

Recent nosedive of crude prices has raised eyebrows about an impending global economic slowdown. On Nov 8, WTI Crude oil entered into bear market as price tumbled more than 20% from its recent peak recorded at Oct 3.

Apple and Goldman Sachs Posts Record Decline

On Nov 12, shares of Apple Inc. (NASDAQ:AAPL) declined 5% following the news that Lumentum Holdings Inc. (NASDAQ:LITE) , a major component supplier of iPhones, lowered its guidance for fiscal second-quarter of 2019 due to a reduction in shipment to a major customer. Shares of Lumentum Holdings plummeted 33%.

Shares of The Goldman Sachs Group, Inc. (NYSE:GS) plunged 7.5%, its highest drop in seven years following the news that Malaysia is seeking a full refund of the $600 million in fees from the company in a failed bond deal called 1MDB. The Goldman Sachs Group carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

US Dollar Index Hits 16-Month High

On Nov 13, the ICE (NYSE:ICE) U.S. Dollar Index, which measures the greenback’s strength against a basket of six major currencies, touched 97.28, its highest level since Jun 23, 2017. Demand for the dollar intensified after the Fed hinted a possible rate hike in December and again in early 2019 last week.

Moreover, quandary regarding the acceptance of the Brexit deal by the UK parliament and a tussle between Italy and the European Union concerning fiscal discipline resulted in the decline of of Pound and Euro against the U.S. dollar. However, investors are concerned that a rising dollar will hurt sales of U.S. multinational companies as their products will be more expensive in international markets.

Battle of Tariffs Intensify

As per Axios report, President Donald Trump is mulling over levying heavy tariffs on overseas automakers. The report stated that Trump considered that a threat of hefty auto tariff was his weapon against Canada for bilateral deal. Now, he wants to sue this weapon against European Union.

Stocks That Made Headlines

Diageo (LON:DGE) to Offload 19 Brands to Sazerac, Can This Aid Growth?

Diageo plc (NYSE:DEO) has agreed to sell a chunk of its brands portfolio, including Seagram’s VO whiskey, to Sazerac — a privately-held American distiller — for $550 million. (Read More)

Home Depot Gains on Q3 Earnings Beat, Raises FY18 View

The Home Depot, Inc. (NYSE:HD) posted top- and bottom-line beat in third-quarter fiscal 2018.Notably, the company retained its five-year-long trend of beating earnings estimates. (Read More)

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