Benchmarks closed mixed on Monday after gains in healthcare stocks offset declines in energy stocks. Gains in biotech stocks had a positive impact on broader healthcare sector. However, oil prices decline dragged energy stocks downward, which in turn weighed on investor sentiment. Both the S&P 500 and Nasdaq ended in the red, while the Dow finished in the red.
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The Dow Jones Industrial Average (DJI) decreased 0.2%, to close at 17,705.91. However, the S&P 500 rose 0.1% to close at 2,058.69. The tech-laden Nasdaq Composite Index closed at 4,750.21, gaining 0.3%. The fear-gauge CBOE Volatility Index (VIX) decreased 1% to settle at 14.57. A total of around 6.8 billion shares were traded on Monday, lower than the last 20-session average of 7.2 billion shares. Decliners outpaced advancing stocks on the NYSE. For 52% stocks that declined, 45% advanced.
Shares of Teva Pharmaceutical Industries Limited (TEVA – Analyst Report) increased 5.1% after the company’s first quarter earnings came in at $1.20 per share, beating Zacks Consensus Estimates of $1.13. Teva posted revenues of $4.81 billion, surpassing Zacks Consensus Estimates of $4.75 billion. Teva’s better-than-expected earnings results boosted investor sentiment.
Moreover, Allergan plc’s (AGN – Analyst Report) shares rose 6% after Teva anticipated that its $40.5 billion acquisition of Allergan’s drug business will be completed by June. Strong gains in shares of Allergan along with a gain of 6.1% in shares of Mallinckrodt Public Limited Company (MNK) boosted the healthcare sector.
The Health Care Select Sector SPDR ETF (XLV) advanced 1.1%, becoming the biggest gainer among the S&P 500 sectors. Key stocks from the sector including Biogen Inc. (BIIB – Analyst Report), Celgene Corporation (CELG – Analyst Report), AbbVie Inc. (ABBV – Analyst Report), Amgen Inc. (AMGN – Analyst Report) and Gilead Sciences Inc. (GILD – Analyst Report) increased 2.5%, 2.2%, 1.9%, 1.5% and 1.2%, respectively. Dow components Johnson & Johnson (JNJ – Analyst Report), Pfizer Inc. (PFE – Analyst Report) and Merck & Co. Inc. (MRK – Analyst Report) rose 0.9%, 0.7% and 0.9%, respectively. The iShares Nasdaq Biotechnology ETF (IBB) rose 2.6%, registering its best gains since April 21.
However, oil prices declined after the impact of Canadian wildfire on crude output declined. Moreover, Saudi Arabia’s oil minister Ali al-Naimi was replaced by Saudi Arabia’s state oil company, Saudi Aramco’s chairman Khalid al-Falih. This in turn raised uncertainty over the oil policy of one of the leading oil producing countries of the world.
Also, crude inventories in the delivery hub of Cushing, Oklahoma have reportedly increased 1.4 million barrels last week. Both the WTI crude and Brent crude fell 2.8% and 4% to $43.44 per barrel and $43.63 a barrel, respectively.
Following oil price decline, the Energy Select Sector SPDR (XLE) decreased 1.5% and was the biggest loser among the major S&P 500 sectors. Key components including, Spectra Energy Corp. (SE – Analyst Report), Occidental Petroleum Corporation (OXY – Analyst Report), Halliburton Company (HAL), Southwestern Energy Company (SWN), Tesoro Corporation (TSO), Schlumberger Limited (SLB) and Chesapeake Energy Corporation (CHK) decreased 0.8%, 0.7%, 1.9%, 2.2%, 2.8%, 3.1% and 10.7%, respectively.
Additionally, as per preliminary data reported by China’s General Administration of Custom, its oil imports increased 7.6% last month from a year ago. However, imports and exports declined 10.9% and 1.8%, respectively year over year. Meanwhile, foreign exchange reserves of the world’s second largest economy rose for the second consecutive month to $3.22 trillion last month.
The Materials Select Sector SPDR ETF (XLB) declined 1.2% and was the second biggest loser among the S&P 500 sectors. Key holdings such as Freeport-McMoRan Inc. (FCX), Newmont Mining Corporation (NEM), LyondellBasell Industries N.V. (LYB), Ecolab Inc. (ECL), E. I. du Pont de Nemours and Company (DD), The Dow Chemical Company (DOW) and Alcoa Inc. (AA) decreased 10.8%, 6.7%, 1.1%, 1.4%, 0.3%, 0.6% and 5.8%, respectively.
Separately, shares of LendingClub Corporation (LC) slumped 34.9% after the company reported that its CEO Renaud Laplanche have resigned. This occurred after LendingClub’s Board discovered that Laplanche has made “non-conforming sales” of loans worth $22 million to an institutional investor, consequently violating company’s business practices. President Scott Sanborn will replace Laplanche.