Stock Market News For May 25, 2016
Zacks Investment Research | May 24, 2016 10:10PM ET
Fears regarding rate hike diminished on Tuesday as investors continued to come to terms with a possible hike next month. This in turn had a positive impact on financials and tech stocks, which helped benchmarks close in the green on Tuesday. Further, encouraging housing data also boosted the markets. The Dow and S&P 500 registered their best percentage gains since Mar 11 and the Nasdaq posted best percentage rise since Mar 1. 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 1.2%, or 213.12 points, to close at 17,706.05. The S&P 500 rose 1.4% to close at 2,076.06. The tech-laden Nasdaq Composite Index closed at 4,861.06, gaining 2%. The fear-gauge CBOE Volatility Index (VIX) decreased 8.9% to settle at 14.42. A total of around 6.9 billion shares were traded on Tuesday, lower than the last 20-session average of 7.2 billion shares. Advancers outpaced declining stocks on the NYSE. For 74% stocks that advanced, 22% declined.
Key U.S. indexes surged yesterday after investors came to terms with an immediate rate hike possibilities following speculation that a rate hike may indicate moderate economic growth. Rising rate hike chances pushed financial stocks northward. The Financial Services Select Sector SPDR (XLFS) advanced 1.7%, emerging as the second highest advancer among the S&P 500 sectors.
Top holdings from the financial services sector such as Bank of America Corporation (NYSE:BAC) (GS ) increased 1.7% and 1.4%, respectively. The Financial Select Sector SPDR (XLF) and KBW Nasdaq Bank Index (BKX) increased 1.5% and 1.6%, respectively.
Also, the Technology Select Sector SPDR (XLK) increased 1.9% and was the biggest advancer among the S&P 500 sectors. Some of its major components including Apple Inc (NASDAQ:AAPL). (QCOM ) increased 1.5%, 2.2%, 1.5%, 2.8% and 2.6%, respectively.
In economic news, the U.S. Department of Housing and Urban Development reported that new home sales rose by 1.6% from March to 619,000 in April, settling at its highest level since Jan 2008. It was significantly higher than the consensus estimate of 521,000. New home sales also posted its highest monthly percentage rise in 24 years. Moreover, new home sales revised upward in March from 511,000 to 531,000.
In earnings news, Toll Brothers Inc. (TOL ) jumped 8.7% after its fiscal second quarter earnings per share and revenues of 51 cents and $1.12 billion beat the Zacks Consensus Estimate of 48 cents and $1.08 billion, respectively. The company’s quarterly earnings and revenues also increased more than 30% year-over-year.
Moreover, following encouraging home sales data, Toll Brothers forecasted to sell a minimum of 5,800 homes in this fiscal year as compared to an earlier estimate of a minimum of 5,700 homes. It also expected its average sales price to rise from a lower end of $810,000 to $820,000.
Gains in Toll Brothers helped the Homebuilders ETF (XHB) to gain 3.1%. Key stocks from this sector including Beazer Homes USA Inc. (Original post
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