Stock Market News for July 25, 2017
Benchmarks turned in mixed performances on Monday. This was largely due to the fact that bond yields increased, leading investors to exit in utilities and telecom stocks. Also, sales for Johnson& Johnson fell after the release of a new drug Renflexis by Merck and Co. This also weighed on the S&P 500 and Dow. On the other hand, Nasdaq ended in the green as the tech-rally continued ahead of major earnings for the sector slated for this week.
The Dow Jones Industrial Average (DJIA) declined 0.3% or 66.9 points, closing at 21,513.17. The S&P 500 Index (INX) fell 0.11%, sliding by 2.63 points to close at 2,469.91. This apart, the Nasdaq Composite Index (IXIC) closed 6,410.81, adding 23.05 points or 0.36%. A total of around 5.5 billion shares were traded on Monday, lower than the last 20-session average of 6.1 billion shares. Declining issues outnumbered advancers on the NYSE by a 1.27-to-1 ratio; on Nasdaq, a 1.17-to-1 ratio favored advancers.
Bond Yields Go Up, Utilities Suffer
The yield on 10 year Treasury note increased to 2.26% and this had negative ramifications for safe havens such as utilities and telecom. A selloff in bonds was responsible for the surge in rates, leading investors to offload utilities and the telecom stocks in favor of their safer fixed income counterparts. As a result, this weighed on the S&P 500 Index.
Johnson & Johnson Disappoints As Share Prices Tank
Shares of Johnson & Johnson JNJ fell 1.5% to $133.21 on Monday. This was largely due to the fact that Merck and Co. MRK together with its South Korean partner Samsung Bioepis Co Ltd has started selling Renflexis, a less expensive alternative version of Johnson & Johnson's rheumatoid arthritis drug Remicade in the United States.
The drug would sell at an astounding 35% discount on the list price of Remicade. This move is touted to bring down the price of this widely sold medicine. The general trend in the prices of generic medicines show that once multiple biosimilars of a drug become accessible, prices drop rapidly due to stiff competition between rivals. Furthermore, this comes as the jolt to the healthcare heavyweight after Pfizer Inc launched Inflectra late last year at a 15 percent discount to J&J's list price and later dropped it to a 19% discount.
Tech Stocks Show Stellar Performances
Nasdaq closed on a record high on Monday primarily due to splendid performances and broad-based gains by technology stocks. This comes just before the earnings release of FAANG stocks such as Amazon.com, Inc AMZN and Facebook FB which are due later this week. Over the year, Facebook, Apple Inc. AAPL, Amazon., Netflix, Inc. NFLX and Alphabet Inc GOOGL have gained between 25% to 34%. But the primary reason behind Nasdaq’s recent gains has been splendid performance from Netflix . Shares jumped 13.5% after it added over 5.2 million subscribers on July 17, 2017.
Existing Home Sales Stumbled
The existing home sales in the US have taken a hit due to an acute shortage of properties at a time when demand is high. Around 1.96 million houses were up for sale in market last month, skidding 7.1% from a year ago. The median house price has also increased 6.5% to $263,800 in a year’s time. Additionally, The National Association of Realtors announced on Monday that existing home sales dropped 1.8% to 5.52 million units last month.
Stocks That Made Headlines
Core Laboratories Q2 Earnings Top Estimates, Sales Lag
Core Laboratories N.V. CLB reported second-quarter 2017 adjusted diluted earnings per share, surpassing the Zacks Consensus Estimate. (Read More)
Hibbett's Dim View Eclipses Entry in eCommerce, Stock Falls
Hibbett Sports Inc. HIBB announced that its comparable store sales (comps) for second-quarter fiscal 2018 may fall as much as 10%. (Read More)
More Stock News: Tech Opportunity Worth $386 Billion in 2017
From driverless cars to artifical intelligence, we've seen an unsurpassed growth of high-tech products in recent months. Yesterday's science-fiction is becoming today's reality. Despite all the innovation, there is a single component no tech company can survive without. Demand for this critical device will reach $387 billion this year alone, and it's likely to grow even faster in the future.
Zacks has released a brand-new Special Report to help you take advantage of this exciting investment opportunity. Most importantly, it reveals 4 stocks with massive profit potential. See these stocks now>>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Amazon.com, Inc. (AMZN) : Free Stock Analysis Report
Netflix, Inc. (NFLX) : Free Stock Analysis Report
Facebook, Inc. (FB) : Free Stock Analysis Report
Alphabet Inc. (GOOGL) : Free Stock Analysis Report
Johnson & Johnson (JNJ) : Free Stock Analysis Report
Merck & Company, Inc. (MRK) : Free Stock Analysis Report
Apple Inc. (AAPL) : Free Stock Analysis Report
Core Laboratories N.V. (CLB) : Free Stock Analysis Report
Hibbett Sports, Inc. (HIBB) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research