Stock Market News For September 02, 2016

Benchmarks finished little changed on Thursday as investors refrained from making big bets ahead of the much awaited Friday’s jobs report. Sluggish manufacturing activity and drop in domestic oil price weighed on the broader markets, but, gains in tech companies kept losses in check. While the Dow and the Nasdaq managed to eke out gains, the S&P 500 ended almost unchanged.

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 0.1%, to close at 18,419.30. The S&P 500 lost 0.09 points to close at 2,170.86. The tech-laden Nasdaq Composite Index closed at 5,227.21 gaining 0.3%. The fear-gauge CBOE Volatility Index (VIX) advanced 0.2% to settle at 13.45. A total of around 6.36 billion shares were traded on Thursday, higher than the last 20-session average of 5.98 billion. Decliners outpaced advancing stocks on the NYSE. For 50% stocks that declined, 46% advanced.

Weak Manufacturing, Odds of Rate Hike Falls

According to the Institute for Supply Management, its manufacturing index dropped to 49.4 in August from 52.6 last month. Any reading below 50 indicates contraction in manufacturing activity. In fact, the index fell below that level for the first time since February. Other key gauges on new orders, production and employment also were below the 50% mark.

Productivity of the American business and workers also fell 0.6% in the second quarter instead of 0.5%, according to the revised official figure. U.S. companies failed to increase productivity despite generating plenty of jobs. Separately, construction spending was flat in July and estimates for earlier months were reduced, according to the Commerce Department (read more: US Construction Spending Unchanged in July).

In the wake of these dismal reports, odds of a September rate hike fell to a one in four as a risk-averse Fed is more likely to wait for further information before hiking rates. Last Friday, chances of a rate hike had risen to one in three following Fed Chair Janet Yellen’s hawkish tone at the Jackson Hole economic symposium.

Financial shares tanked as lower possibility of a rate hike doesn’t bode well for this sector. The Financial Services Select Sector SPDR (XLFS) dropped 0.5%, the highest among the S&P 500 sectors. Shares of key stocks from the sector including Wells Fargo & Company (NYSE:WFC) (WFC), Bank of America Corporation (NYSE:BAC) (BAC) and Prudential Financial Inc (NYSE:PRU) (PRU) decreased 0.7%, 0.9% and 0.7%, respectively.

Energy Shares Decline, Tech Move North

Oil price declined on worries about a supply glut, which adversely affected energy shares. WTI crude fell 3.6% to $43.16 per barrel. The Energy Select Sector SPDR (XLE (NYSE:XLE)) declined 0.3%, with two of its Dow components Exxon Mobil Corporation (NYSE:XOM) (XOM) and Chevron Corporation (NYSE:CVX) (CVX) decreasing 0.3% and 0.4%, respectively.

However, the Technology Select Sector SPDR (XLK) gained 0.3% due to broad-based gains among tech-behemoths. Shares of Hewlett Packard Enterprise (HPE) and Apple (NASDAQ:AAPL) (AAPL) were up 3.2% and 0.6%, respectively.

Stocks that Made Headlines

Broadcom (NASDAQ:AVGO) Q3 Earnings Top on Solid Organic Growth

Broadcom Limited (AVGO) recorded solid third-quarter fiscal 2016 results with healthy sequential improvements in revenues and earnings on the back of robust organic growth. (Read More)

Lululemon Q2 Earnings & Sales in Line, View Strong

Lululemon Athletica Inc.’s (LULU) quarterly results were mainly driven by sustained top-line momentum, accelerated gross margin growth and efficient inventory management. (Read More)

The Cooper Companies Beats Q3 Earnings, View Up

The Cooper Companies Inc.’s (COO) adjusted earnings per share in the third quarter of 2016 were able to beat the Zacks Consensus Estimate. (Read More)

VeriFone Q3 Earnings Beat, Stock Down on View Cut

VeriFone Systems Inc.’s (PAY) third-quarter fiscal 2016 adjusted earnings per share came in ahead of the Zacks Consensus Estimate. (Read More)

Joy Global (NYSE:JOY) Misses Q3 Earnings & Revenue Estimates

Joy Global Inc.’s (JOY) adjusted earnings per share in the third quarter of fiscal 2016 lagging the Zacks Consensus Estimate. (Read More)

Gap’s Dismal August Sales & Fishkill Fire Hurt Stock

Gap Inc (GPS), which has been struggling with its top line and comparable store sales for a while now, continued to be marred by softness across its Banana Republic and namesake brands. (Read More)

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