Stock Market News For Nov 1, 2018

Wall Street ended a disastrous October on Wednesday on a winning note buoyed by strong third quarter earnings resultsfrom major brand names. All three major stock indexes closed in the green despite the fact that they finished in deep red for the month as a whole.

The Dow Jones Industrial Average (DJI) closed at 25,115.76, rising 1% or 241.12 points. The S&P 500 Index (INX) gained 1.1% to close at 2,711.74. The Nasdaq Composite Index (IXIC) closed at 7,305.90, climbing 2% or 144.25 points. A total of 9.8 billion shares were traded on Wednesday, higher than the last 20-session average of 8.7 billion shares. Advancers outnumbered decliners on the NYSE by 1.53-to-1 ratio. On the Nasdaq, advancers had an edge over decliners by 1.59-to-1 ratio.  The CBOE VIX decreased 9.1% to close at 21.23, its lowest close since Oct 23.

How Did the Benchmarks Perform?

The Dow ended in positive territory for second-straight day. The blue-chip index closed above 25,000 for the first time since Oct 23. Notably, twenty two components of the 30-stock index closed in the green while the remaining eight finished in the red.

The S&P 500 also closed in the green led by a 2.4% rise in Technology Select Sector SPDR (XLK) and 2.1% gain in Communication Services Select Sector SPDR (XLC). Notably, eight out of total 11 sectors of the benchmark index closed in the green. For the first time since Sep 20, the broad-market index finished on a winning note for two successive days.

Meanwhile, the tech-laden Nasdaq Composite closed in positive territory for two consecutive days due to strong performance of large-cap technology stocks.

Earnings Results Lifted Investor Confidence

Strong third quarter earnings results by several major companies revived investor’s faith in risky assets like equities to some extent.

Shares of Facebook Inc. FB rose 3.8% following third-quarter results wherein the bottom line surpassed the Zacks Consensus Estimate while top line fell below the same. However, the company’s overall Average Revenue per User (ARPU) jumped 20.1% to $6.09. (Read More)

Shares of General Motors Co. GM soared 9.1% after posting impressive third quarter earnings results wherein both the top and bottom line outpaced the Zacks Consensus Estimate. (Read More)

eBay Inc. EBAY surpassed Zacks Consensus Estimate for both earnings and revenues in the third quarter. Consequently, the stock price surged 5.9%. (Read More)

YUM! Brands Inc. YUM beats Zacks Consensus Estimate for earnings in the third quarter. However, revenues lagged the same. Shares of YUM! Brands climbed 4.6%. (Read More)

All four above mentioned stocks carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Economic Data

On Oct 31, ADP and Moody’s Analytics reported that the U.S. private sector has added 227,000 jobs in October. However, September’s job growth data was revised downward from 230,000 to 218,000.

The Department of Labor reported that the U.S. employment cost index (ECI) rose 0.8% in the third quarter of 2018, surpassing the consensus estimate of a rise of 0.7%. Private sector wages and salaries grew 0.9% sequentially and 3.1% year over year, its highest since 2008.

However, the MNI Chicago business barometer, popularly known as Chicago PMI, was pegged at 58.4 in October compared with 60.4 in September. The reading was also below the consensus estimate of 60.6.

Monthly Roundup

Wall Street witnessed its monthly worst performance this year in October. All three major stock indexes – the Dow, S&P 500 and Nasdaq Composite – are in the red the month. The Dow fell 5.1%, its biggest monthly drop since January 2016. The S&P 500 dropped 6.9%, its biggest monthly decline since September 2011. Meanwhile, Nasdaq Composite plummeted 9.2%, marking its largest monthly slide since November 2008.

The broad-based collapse in U.S. stock markets in October came after investors’ panicked on soaring yields on government bonds and lingering trade-conflicts with China. Investors remained concerned about the continuation of aggressive monetary policy by the Fed.  Moreover, geopolitical tension with Saudi Arabia following the murder of a U.S.-based journalist in Saudi embassy in Istanbul aggravated the situation.  

Stocks That Made Headlines

Express Scripts Tops Q3 Earnings & Revenue Estimates

Express Scripts Holding Co. ESRX posted third-quarter 2018 adjusted earnings of $2.43 per share, which beat the Zacks Consensus Estimate of $2.42. (Read More)

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eBay Inc. (EBAY) : Free Stock Analysis Report
 
Facebook, Inc. (FB) : Free Stock Analysis Report
 
General Motors Company (GM) : Free Stock Analysis Report
 
Yum! Brands, Inc. (YUM) : Free Stock Analysis Report
 
Express Scripts Holding Company (ESRX) : Free Stock Analysis Report
 
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