Stock Market News for July 29, 2016

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Despite decline in energy stocks, benchmarks ended mostly in the green on Thursday on the back of gains in major tech companies. Facebook’s encouraging second quarter earnings results boosted the S&P 500 and Nasdaq to end in the green. However, the Dow closed in the red, after fall in oil prices weighed on some of its components like Exxon Mobil and Chevron. Additionally, telecom sector emerged as the worst performer following losses in Level 3 Communications.

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The Dow Jones Industrial Average (DJI) decreased 0.1%, to close at 18,456.35. However, the S&P 500 rose 0.2% to close at 2,170.06. The tech-laden Nasdaq Composite Index closed at 5,154.98, gaining 0.3%. The fear-gauge CBOE Volatility Index (VIX) decreased 0.9% to settle at 12.72. A total of around 6.6 billion shares were traded on Thursday, marginally lower than the last 20-session average of 6.7 billion shares. Advancers outpaced declining stocks on the NYSE. For 50% stocks that advanced, 46% declined.

Shares of Facebook, Inc. ( FB ) increased 1.4% after reporting second quarter adjusted earnings per share of 76 cents and revenues of $6.436 billion, which beat the respective Zacks Consensus Estimate of 62 cents and $6.008 billion. While its quarterly earnings more than doubled from the year-ago quarter, revenues jumped 59.2% year-over-year. Following upbeat quarterly results, Facebook witnessed a rise of 4% to reach its highest level ever during the day.

Also, shares of Amazon.com, Inc. ( AMZN ) and Alphabet Inc. ( GOOGL ) increased 2.2% and 0.5%, respectively, ahead of its quarterly reports, to be posted after the close yesterday.

Moreover, Apple Inc’s ( AAPL ) shares continued to rise 1.4% after reporting higher-than-expected fiscal third quarter earnings results late Wednesday. Gains in all these major tech companies boosted the Nasdaq and S&P 500 to end in the green.

Meanwhile, reports showed that crude inventories in the delivery hub of Cushing, Oklahoma have increased by 328,000 barrels for the week ended July 26. Also, shares of Royal Dutch Shell plc ( RDS.A ) slumped 3% after its earnings and revenues of 6 cents per share and $58,415 million, missed the Zacks Consensus Estimate of 53 cents and $65,464 million, respectively. Both WTI and Brent crude fell 1.9% and 1.8% to $41.14 a barrel and $42.70 per barrel, respectively.

Decrease in oil prices led the Energy Select Sector SPDR (XLE) to curb most of its gains. Key energy stocks including, Murphy Oil Corporation ( MUR ), Schlumberger Limited ( SLB ), Williams Companies, Inc. ( WMB ), Anadarko Petroleum Corporation ( APC ) and Helmerich & Payne, Inc. ( HP ) fell 4.4%, 1%, 0.9%, 0.8% and 2.9%, respectively. Dow components Exxon Mobil Corporation ( XOM ) and Chevron Corporation ( CVX ) decreased 0.8% and 0.5%, respectively.

Additionally, shares of Level 3 Communications, Inc. ( LVLT ) continued to fall 3.3%, after the company reported second quarter total revenue of $2,056 million on Wednesday, which was down 0.2% year over year and missed the Zacks Consensus Estimate of $2,084 million.

Losses in Level 3 Communications led the telecom services sector within the S&P 500 to fall 0.7%, becoming the worst performer among the key S&P 500 sectors. Its other key holdings including Verizon Communications Inc. ( VZ ) and AT&T, Inc. ( T ) declined 0.8% and 0.4%, respectively.

Separately, Whole Foods Market, Inc’s ( WFM ) fell 9% after the company projected sales growth of only 2% for fourth-quarter fiscal 2016, reflecting comps decline of 2.4%. Whole Foods Market was the biggest decliner among the S&P 500 companies.

Shares of Ford Motor Co. ( F ) fell 8.2% after reporting second quarter adjusted earnings and revenues of 52 cents per share and $39.5 billion, missing the Zacks Consensus Estimate of 60 cents and $36.62 billion, respectively. The company also said that as the growth in U.S. auto sales “is over”, which may hamper its earnings forecasts. This in turn had a negative impact on the broader automobile market. Ford was second worst performer among the S&P 500 companies.

In economic news, initial claims for the week ending July 23 came in at 266,000, an increase of 14,000 from the prior week. Jobless claims were also more than the consensus estimate of 263,400.

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