Wednesday’s Theme: Follow The Leader (Oil)

Wednesday’s Theme: Follow The Leader (Oil)

Wednesday’s Theme: Follow The Leader (Oil)

Published on 19/10/2016 – – Follow us on Twitter: @SMDailyCo and Facebook: @StockMarketDaily

U.S. stocks were mostly higher at the end of Wednesday’s trading session.  The market has now risen in two consecutive days and followed oil’s lead higher.

The price of a barrel of oil rose to its highest level since July 2015 and settled higher by more than 2 percent at $51.60 a barrel.

The Dow Jones Industrial Average gained 0.22 percent to close at 18,202.62, the S&P 500 also gained 0.22 percent to close at 2,144.29 while the Nasdaq index under-performed having gained just 0.05 percent to close at 5,246.41.

Technology stocks were haunted by Intel (NASDAQ: INTC) after the technology giant reported a better than expected third quarter but raised some alarms with a cautious fourth quarter outlook.  

Specifically, the company earned $0.80 per share in its third quarter on revenue of $15.8 billion.  The company earned seven cents more than Wall Street analysts were expecting and its revenue fell slightly shy of the $15.58 billion expected.

Looking forward to the fourth quarter the company guided its revenue to be $15.7 billion plus or minus $500 million while analysts were modeling $15.8 billion.  The company’s poor outlook was attributed to inventory burn in the PC end market and growth and a less-than-expected growth in the data center business which offers high margins.

Investors were also cautious on technology stocks after a UK-based component supplier to Apple (NASDAQ: AAPL), Laird, issued a profit warning which has investors wondering if iPhone sales are holding up to expectations.

Needless to say the best performing sector was energy.  Energy-related giants saw their stocks move notably higher, including Halliburton (NYSE: HAL) (+4.25 percent), Kinder Morgan (NYSE: KMI) (+2.63 percent) and Schlumberger (NYSE: SLB) (+2.52 percent).

Commodity related stocks were also extremely strong during the trading session.  The basics material group as a whole gained 0.91 percent, led by United States Steel (NYSE: X) (+7.63 percent), Barrick Gold (NYSE: ABX) (+5.62 percent) and Freeport-McMoran (NYSE: FCX) (+3.09 percent).

The Federal Reserve released its “Beige Book” which showed that the U.S. economy continued expand, a modest employment and wage growth was observed, home prices continued to rise at a modest pace, retail spending increased and among others, the U.S. election is heavily viewed as a source of economic uncertainty.