Stock Market News For Dec 26, 2017

Markets ended slightly lower on Friday as investors were reluctant to participate in intraday trading ahead of Christmas holidays. This led to unusually low volumes for the day as a whole. Meanwhile, Trump signed the Tax Bill as well as the legislation passed by Senate to keep the government funded through Jan 19. Finally, the Dow and the S&P 500 posted their fifth straight week of gains.

The Dow Jones Industrial Average (DJIA) decreased 0.1%, to close at 24,754.06. The S&P 500 Index (INX) fell 0.05% to close at 2,683.34. The tech-laden Nasdaq Composite Index (IXIC) closed at 6,959.96, declining 0.1%. A total of 4.81 billion shares were traded on Friday, lower than the last 20-session average of 6.98 billion shares. Advancers outnumbered decliners on the NYSE by a 1.04-to-1 ratio. On Nasdaq, a 1.30-to-1 ratio favored declining issues. The CBOE VIX increased 2.9% to close at 9.9. Markets were closed on Monday due to Christmas holiday.

Trump Signs the Tax Bill

The much awaited Tax Bill was finally signed by President Trump on Friday in the Oval office. The Bill permanently slashes corporate tax rates from 35% to 21%. In his comments, Trump pointed out that markets will benefit greatly from this legislation and that “corporations are literally going wild” following the Bill’s passage.

Moreover, he also stated that he had planned to sign the Bill ceremonially after the Christmas holidays. However, television news that speculated if he would sign the Bill before Christmas, as had been promised, prompted him to finally sign the Bill.

Trump also signed a Bill which the Senate had passed on Thursday to keep the government running through Jan 19, 2018. The Bill also extended agency funding at the current level. Further, it would keep funding Children's Health Insurance Program (CHIP) through the end of March next year. The Bill extends the Foreign Intelligence Surveillance Act and its language prevents any automatic spending deductions to programs like Medicare.

How Did the Benchmarks Perform?

The Dow suffered broad-based losses on Friday and tumbled 28.23 points to end in the negative territory. The S&P 500 lost 1.23 points to also end in the red. Of the 11 major sectors of the S&P 500, six ended in the positive territory with real estate leading the advancers.

The Real Estate Select Sector SPDR (XLRE) gained 0.7%. The Energy Select Sector SPDR ETF (XLE) also gained 0.2% and rose 4.5% over the last week — its best weekly percentage gain since April 2016. Meanwhile, the Nasdaq plummeted 5.4 points to end in negative territory. Markets were primarily down due to low trade volumes as investors refrained from participating ahead of the holiday season. This also marked the second lowest full session trade volume of 2017. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Economic Data

On the economic data front, new home sales for November came in at 733,000 units, more than the consensus estimate of 655,000 units. This reading is 16% higher from the last year.

Orders for durable goods for November came in at 1.3%, below the consensus estimate of an increase of 2.3%. Further, consumer spending in November surged 0.6%, surpassing the consensus estimate of 0.5%. Also, personal income came in at 0.3%, below the consensus estimate of 0.4%.

Meanwhile, the personal savings rate for November declined to a decade low at 2.9% and disposal personal income increased 0.4%, in line with the consensus estimate. Finally, the PCE inflation for November surged 0.2% and core PCE inflation rose 0.1%. The consensus estimate for the period for both was 0.2%.

Weekly Roundup

For the week, the Dow surged 0.4% and the Nasdaq and the S&P 500 both gained 0.3%. Both the Dow and the S&P 500 posted their fifth straight weekly gains. The Senate Republicans finally passed the tax overhaul Bill. This development permanently slashes the corporate tax rate to 21% from 35%.

Following tax cuts, major banks and telecom companies pledged to provide better pay to their employees, which in turn boosted investor sentiment. Moreover, U.S. GDP increased in the third quarter, posting its best growth pace in more than two years, further supporting the day’s gains.

Stocks That Made Headlines

Southern Company Vogtle Project Wins Georgia PSC Nod

Georgia Public Service Commission (PSC) recently approved the construction of The Southern Company’s SO controversial Vogtle project. (Read More)

Petrobras Unveils 5-Year Business and Management Plan

Petróleo Brasileiro S.A. or Petrobras PBR recently announced its Business and Management Plan ("BMP") for 2018-2022, which shows marginally higher investments than the 2017-2021 period. (Read More)

Zacks Editor-in-Chief Goes "All In" on This Stock

Full disclosure, Kevin Matras now has more of his own money in one particular stock than in any other. He believes in its short-term profit potential and also in its prospects to more than double by 2019. Today he reveals and explains his surprising move in a new Special Report.

Download it free >>

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Southern Company (The) (SO) : Free Stock Analysis Report
 
Petroleo Brasileiro S.A.- Petrobras (PBR) : Free Stock Analysis Report
 
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