Stock Market News For Nov 30, 2017

Benchmarks finished mixed on Wednesday as investors rotated out of tech stocks to financial stocks. Investors moved to financial stocks after both Yellen and Powell gave enough hint of a rate hike next month. Meanwhile, the second estimate of the U.S. GDP showed that the economy grew at its fastest pace in three years, which further boosted investors’ sentiment. While the Dow posted an all-time record finish, the Nasdaq took a beating due to decline in tech stocks.

The Dow Jones Industrial Average (DJIA) increased 0.4%, to close at 23,940.68. The S&P 500 Index (INX) lost 0.04% to close at 2,626.07. The tech-laden Nasdaq Composite Index (IXIC) closed at 6,824.39, decreasing 1.3%. Advancers outnumbered decliners on the NYSE by 1,467 to 1,340. On Nasdaq, advancing issues outnumbered declining ones by 1,478 to 1,270. The CBOE VIX increased 2.8% to close at 10.31.

How Did the Benchmarks Perform?

The Nasdaq tanked almost 88 points to end in the negative territory. The tech-laden index posted its worst single-day drop since Aug 17. Such losses were triggered after the investors rotated out of the tech stocks to financial stocks. Yellen’s comments that a burgeoning U.S. economy would pave way for the future of rate hikes encouraged the investors to move to financial stocks.

Moreover, Powell had commented on Tuesday that he would continue to work toward raising interest rates at the same time as gradually unwinding the Fed’s humungous balance sheet. This also bolstered gains for the financial stocks.

Shares of major tech players such as Facebook (NASDAQ:FB) , Amazon (NASDAQ:AMZN) , Apple (NASDAQ:AAPL) , Alphabet (NASDAQ:GOOGL) and Netflix (NASDAQ:NFLX) all declined 4%, 2.7%, 2.1%, 2.4% and 5.5%, respectively. The PHLX Semiconductor index tanked 4.4% to 1,265.01 to post its biggest decline since Dec 1, 2016. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Meanwhile, the S&P 500 shed less than a point to also end in the red. Although, eight of the 11 major segments of the S&P 500 ended in the green, gains were negated by sharp losses for the tech stocks. The Technology Select Sector SPDR ETF (NYSE:XLK) declined 2.2%. Such losses for the tech stocks weighed heavily on the broader markets.

Finally, the Dow amassed 103 points to close at a record high following better-than-expected GDP data in the third quarter. Such a stellar showing by the blue-chip index was also supported by gains for UnitedHealth Group (NYSE:UNH) and JPMorgan Chase (NYSE:JPM) , shares of which increased 3.1% and 2.3%.

U.S. GDP Exhibits Highest Rate of Growth Since 2014

According to the second estimate, the gross domestic product of the United States expanded at an astounding 3.3% in the third quarter of 2017. This also marks it fastest pace of growth since the third quarter of 2014. Per the report from the Commerce Department, consumer spending, the biggest contributor to economic growth advanced 2.3% in the 3Q17. Further, spending on business equipment shot up 10.4% in the period, also notching up a three-year high. Meanwhile, corporate pre-tax profits have surged 5.4% year-over-year.

However, some analysts stated that such figures are rather aggrandized and do not present a true picture of the health of the economy. They have reasoned that inventories accounted for as much as 25% of the GDP growth and if excluded from the calculation, the U.S. GDP stands at 2.5% annual rate of growth.

In her final testimony on Capitol Hill on Wednesday, Janet Yellen commented that the economic growth is largely broad based “across sectors as well as across much of the global economy.” However, price data in the GDP report clearly indicated that inflation remained well below the targeted 2%.

Economic Data

The Fed’s Beige Book report showed that the economy has expanded at a modest to moderate pace. Moreover, the Fed also reported that it noticed a ‘slight improvement in the outlook.’

Further, pending home sales for the month of October increased 3.5%, surpassing the consensus estimate of a 2% growth. For the month of September, however, the reading dipped 0.4%. (Read More: Pending Home Sales Strengthen 3.5 Percent in October)

Stocks That Made Headlines

Kroger Q3 Earnings & Sales Beat, View Intact, Stock Up

After witnessing a negative earnings surprise in the second quarter of fiscal 2017, The Kroger Co. (NYSE:KR) made a sharp come back in the third quarter. (Read More)

Nokia (HE:NOKIA) Brushes Off Juniper Networks Takeover Rumors

The rumors that Nokia Corporation (NYSE:NOK) was looking to buy Juniper Networks (NYSE:JNPR) were making rounds late yesterday. (Read More)

PVH Corp Q3 Earnings & Sales Top, Raises FY17 View

PVH Corporation (NYSE:PVH) delivered better-than-expected earnings and sales results for third-quarter fiscal 2017. (Read More)

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