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Stock Market News for Dec 5, 2023

Market News

Wall Street ended lower on Monday, with investors taking a pause after major indexes recorded five straight weeks of gains as they awaited employment data. All three major indexes ended in negative territory.

How Did The Benchmarks Perform?

The Dow Jones Industrial Average (DJI) fell 0.1%, or 41.06 points, to close at 36,204.44. Notably, 14 components of the 30-stock index ended in negative territory, while 15 were in green and one remained unchanged. The major loser of the blue-chip index was Salesforce, Inc. (CRM) after declined 3.2%. Salesforce currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The tech-heavy Nasdaq Composite declined 0.8% to close at 14,185.49.

The S&P 500 dropped 0.5% to end at 4,569.78. Out of 11 broad sectors of the benchmark, seven ended in negative territory, while four finished in green. The Technology Select Sector SPDR (XLK), the Materials Select Sector SPDR (XLB) and the Communication Services Select Sector SPDR (XLC) declined 1.2%, 1.2% and 1%, respectively, while the Real Estate Select Sector SPDR (XLRE) advanced 0.6%.

The fear-gauge CBOE Volatility Index (VIX) increased 3.6% to 13.1. A total of 12.7 billion shares were traded on Monday, lower than the last 20-session average of 10.6 billion. The S&P 500 posted 38 new 52-week highs and one new low; the Nasdaq Composite recorded 125 new highs and 63 new lows.

Investors Await for Job Data

Investors are eagerly awaiting the release of the jobs report for November. They are interested in understanding the Federal Reserve’s position on interest rates and their efforts to achieve a " soft landing" by controlling inflation. Many traders anticipate that the central bank will maintain its rates during its meeting. According to the FedWatch tool provided by the CME Group, there is a 58% chance of rate cuts beginning in March 2024. Moreover, concerns about an escalation in tensions between Israel and Gaza triggered by an attack on three vessels in the Red Sea have added to the uncertainty in market dynamics.

Oil Prices Decline

Oil prices fell on Monday after OPEC and its allies announced a reduction in production. The West Texas Intermediate for January settled at $73.04 per barrel, experiencing a decrease of 1.39%. Similarly, the Brent crude for February settled at $78.03 per barrel, marking a drop of 1.08%. OPEC+ agreed to supply cuts of 2.2 million barrels per day for Q1 of 2024, which has resulted in a 6% decline in oil futures since Wednesday. Yet, Saudi Energy Minister Prince Abdulaziz bin Salman expressed confidence in the promised reductions. This suggests that the supply cuts could extend beyond Q1 2024 based on market conditions.

Economic Data

The Department of Commerce reported that factory orders (both durable and non-durable goods) fell 3.6% in October, more than the consensus estimate of a decline of 3%. The metric rose 2.3% in September. New orders for manufactured durable goods were down 5.4% in October, while those of manufactured non-durable goods were down 1.9%.

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