Stock Market News for October 20, 2015

The Dow Jones Industrial Average (DJI) rose 0.1% to close at 17,230.54. The Standard & Poor’s 500 (S&P 500) gained a meager 0.03% to close at 2,033.66. The tech-laden Nasdaq Composite Index closed at 4,905.47, rising 0.4%. The fear-gauge CBOE Volatility Index (VIX) declined 0.5% to settle at 14.98. A total of around 6 billion shares were traded on Monday, lower than the last 20-sessions’ average of 7.3 billion. Decliners outpaced advancing stocks on the NYSE. For 52% stocks that declined, 45% advanced.

Benchmarks ended Monday’s choppy trading session slightly higher due to gains in biotech and technology companies. Key biotech stocks including Celgene Corporation (CELG), Amgen Inc. (AMGN), Gilead Sciences Inc. (GILD), Regeneron Pharmaceuticals, Inc. (REGN) and Biogen Inc. (BIIB) increased 1.3%, 1.2%, 0.8%, 1.7% and 0.2%, respectively. The iShares Nasdaq Biotechnology (IBB) gained 0.5%, while the broader Health Care Select Sector SPDR (XLV) advanced 0.4%.

The Technology Select Sector SPDR (XLK) also gained 0.4%. Key holdings from the sector including Intel Corporation (INTC), Apple Inc. (AAPL), Microsoft Corporation (MSFT), Alphabet Inc (GOOGL) and Facebook, Inc. (FB) increased 1.7%, 0.6%, 0.2%, 0.7% and 0.9%, respectively.

Separately, the Homebuilders ETF (XHB) gained 0.8%, the highest among the S&P 500 sectors. Key stocks from this sector including Beazer Homes USA Inc. (BZH), DR Horton Inc. (DHI), Owens Corning (OC), Lennar Corporation (LEN) and PulteGroup, Inc. (PHM) rose 5.3%, 1.1%, 1.5%, 0.8% and 0.2%, respectively.

However, a drop in energy shares kept a lid on the gains. Energy shares fell due to decline in oil prices. Iran’s oil minister’s comments that the country will increase production by 500,000 barrels a day in the near term had a negative impact on oil prices. Additionally, discouraging economic data from China also weighed on oil prices.

China is currently the world’s second largest consumer of oil. China’s economic growth slowed down to 6.9% in the third quarter. China’s economic growth declined below the 7% mark for the first time since 2009. However, the economy expanded at more than the 6.8% rate analysts had forecasted. The world’s second largest economy had grown 7% in the previous two quarters.

Prices of WTI crude oil and Brent crude oil declined 2.9% and 3.8% to $45.89 per barrel and $48.61 a barrel, respectively. The Energy Select Sector SPDR (XLE) dropped almost 1% and was the biggest loser among the S&P 500 sectors. Dow components Exxon Mobil Corporation (XOM) and Chevron Corporation (CVX) dropped 1.8% and 1.4%, respectively. Other key stocks from the energy sector including Schlumberger Limited (SLB), ConocoPhillips (COP) and Kinder Morgan, Inc. (KMI) decreased 0.5%, 2.8% and 1.5%, respectively. Overall, 8 out of 12 sectors of the S&P 500 ended in the green.

Meanwhile, investors kept an eye on quarterly earnings results. Halliburton Company (HAL) reported positive quarterly earnings result despite the low oil prices. Halliburton posted third quarter earnings per share of 31 cents, beating the Zacks Consensus Estimate of 27 cents. However, revenues of $5,582 million failed to surpass the Zacks Consensus Estimate of $5,671 million. Shares of the major oilfield service provider dropped 1.2%.

Shares of Morgan Stanley (MS) declined 4.8% after the company reported third quarter earnings per share of 48 cents that fell short of the Zacks Consensus Estimate of 64 cents. Revenues for the reported quarter were $7.33 billion, lagging the Zacks Consensus Estimate of $8.64 billion.

Including these reports, about 63 S&P 500 members have reported third quarter earnings results so far. Among the 63 members, earnings are up 1% on 0.9% lower revenues, with 61.9% beating earnings per share estimates and 28.6% coming ahead of top-line expectations.

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