Stock Market News For June 09, 2016

Benchmarks finished in the green on Wednesday following a weaker dollar and rally in oil prices. Decline in the greenback pushed the commodity prices northward, which in turn had a positive impact on materials and industrial sector. All the three key U.S. indexes ended in positive territory with the Dow crossing the psychological level of 18,000 for the first time since Apr 27.

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The Dow Jones Industrial Average (DJI) increased 0.4%, to close at 18,005.05. The S&P 500 rose 0.3% to close at 2,119.12. The tech-laden Nasdaq Composite Index closed at 4,974.64, also gaining 0.3%. However, the fear-gauge CBOE Volatility Index (VIX) increased 0.2% to settle at 14.08. A total of around 6.5 billion shares were traded on Wednesday, lower than the last 20-session average of 6.8 billion shares. Advancers outpaced declining stocks on the NYSE. For 65% stocks that advanced, 31% declined.

In the World Affairs Council of Philadelphia on Monday, Fed Chairwoman Janet Yellen indicated that Fed will increase rate this year, but she did not mention any specific time for rate hikes. So, Friday’s disappointing job report and Yellen’s comments on rate hikes reduced the prospects for a rate increase this month. This in turn continued to weaken the dollar.

The U.S. dollar index fell by 0.3% at 85.64, settling at its lowest level since May 3. The euro came nearly at $1.1397 and the yen was about 106.95 yen against the U.S. dollar. Decline in the dollar had a positive impact on commodity prices, which in turn boosted materials and industrial stocks.

The Materials Select Sector SPDR (XLB) increased 0.6% and was one of the key gainers among the S&P 500 sectors. Key components from materials sector including Freeport-McMoRan Inc. (AA ), rose 3%, 2.8%, 3%, 1.6% and 1%, respectively.

Moreover, the Industrial Select Sector SPDR (XLI) also increased 0.6% and was the biggest advancer among the S&P 500 sectors. Key industrial stocks including Norfolk Southern Corporation (NYSE:NSC) (MMM ) rose 0.8%, 0.6% and 0.3%, respectively.

Additionally, oil prices continued to end in positive territory after the U.S. Energy Information Administration (EIA) reported that the U.S. commercial crude oil inventories fell 3.2 million barrels to 532.5 million for the week ended June 3. It was wider than analysts’ forecasts of a decrease of 2.7 million barrels.

WTI crude increased 1.7% to $51.23 a barrel, settling at its highest level since July 15. Brent crude rose 2% to $52.51 per barrel, reaching its highest settlement since October. Rally in oil helped Chesapeake Energy Corporation (NYSE:CHK) (CHK ) to increase 6.4% and become the biggest gainer among the S&P 500 companies.

However, the EIA reported that total motor gasoline and distillate fuel inventories increased 1 million barrels and 1.8 million barrels, respectively last week, which in turn weighed on the energy sector. The Energy Select Sector SPDR (XLE (NYSE:XLE)) fell 0.2%.

In company news, shares of Lululemon Athletica Inc. (LULU ) increased 4.9% after its fiscal first quarter net revenues of $495.5 million increased 17% year-over-year and beat the Zacks Consensus Estimate of $488 million. The company’s total comparable sales increased by 6% and its quarterly earnings of $0.30 per share came in line with the Zacks Consensus Estimate.

Further, the Dow component UnitedHealth Group Incorporated (NYSE:UNH) (Original post

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Written By: Zacks Investment Research