Stock Market News for August 23, 2016

Benchmarks closed mostly in the red on Monday after a decline in crude prices weighed on energy sector and eventually on the Dow and S&P 500. Moreover, investors remained cautious ahead of Fed Chief Janet Yellen's speech on the U.S. economic policy at Jackson Hole, Wyoming on Friday. However, news of Pfizer acquiring Medivation for $14 billion boosted biotech stocks, which in turn led the Nasdaq to end in the green.

For a look at the issues currently facing the markets, make sure to read today's Ahead of Wall Street article.

The Dow Jones Industrial Average (DJI) decreased 0.1%, to close at 18,529.42. The S&P 500 also fell 0.1% to close at 2,182.64. However, the tech-laden Nasdaq Composite Index closed at 5,244.60 gaining 0.1%. The fear-gauge CBOE Volatility Index (VIX) increased more than 8% to settle at 12.6. A total of around 5.3 billion shares were traded on Monday, lower than the last 20-session average of 6.38 billion. Volume of declining and advancing stocks almost remained same on the NYSE.

What Pulled Energy Sector Down?

Analysts of Morgan Stanley MS said that any agreement between major oil producing nations to freeze crude production is "highly unlikely." This is mainly because there are "too many headwinds and logistical challenges" to any such production freeze deal.

Moreover, China's exports of gasoline and diesel last month advanced by 145.2% and 181.8% year-over-year to 970,000 tons and 1.53 million tons, respectively. Also, U.S. oil rig counts rose for eight straight weeks and possibility of an increase in crude exports in Nigeria and Iraq also surfaced. All these factors had a negative impact on crude prices.

WTI crude fell 3.1% to $47.05 per barrel, posting its biggest fall since Aug 1. Brent crude also declined 3.5% to $49.16 a barrel. Decrease in oil prices led the Energy Select Sector SPDR XLE to fall 1.2%, which emerged as the biggest loser among the S&P 500 sectors. Some of its holdings including, Marathon Oil Corporation MRO, Halliburton Company ( HAL), Pioneer Natural Resources Co. PXD and Schlumberger Limited SLB decreased 6.9%, 3.8%, 2.3% and 1.5%, respectively. Dow component Chevron Corporation CVX fell 0.4%.

What Boosted The Nasdaq?

Pfizer Inc. PFE and Medivation, Inc. MDVN announced that Pfizer will acquire Medivation for $81.50 per share in cash or a total enterprise value of about $14 billion. Following this development, shares of Pfizer fell 0.4% but Medivation's shares jumped 19.7% (read more: Pfizer to Buy Medivation for $14B, Boost Cancer Franchise).Gains in Medivation led the Nasdaq Biotechnology Index (NBI) to increase by 2% and had a positive impact on the broader tech-based index.

Stocks that Made Headlines

Tesla Expands to South Korea, Opens Pre-orders

Tesla Motors, Inc. TSLA has selected South Korea as the next step to further its international expansion plans. (Read More)

Delphi Automotive Partners Mobileye for Self-Driving Solution

Delphi Automotive PLC DLPH and Mobileye N.V. ( MBLY) announced that they have joined forces to develop a complete SAE Level 4/5 automated driving solution. (Read More)

CST Brands Agrees to Buyout by Canada's Couche-Tard Inc

Canada-based Alimentation Couche-Tard Inc. agreed to buy CST Brands CST on Monday for $48.53 per share, or $4.4 billion overall including the assumption of net debt. (Read More)

Syngenta Stock Rallies 10% on ChemChina Deal Approval

On Monday, shares of seed and pesticide manufacturer Syngenta Ag-Adr SYT are rallying up around 10% in late-morning trading after China National Chemical Corp. (ChemChina)'s bid to acquire the company for $44 billion was approved. (Read More)

Valeant Pharmaceuticals Appoints New CFO, Stock Gains 7.2%

Shares of Valeant Pharmaceuticals VRX were up over 7% in midday trading on Monday after the company announced the appointment of a new Chief Financial Officer (CFO). (Read More)

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 >>

Market News and Data brought to you by Benzinga APIs

Get Our Top Trade Ideas Delivered Daily - 65% Off Now

Get Our Top Trade Ideas Delivered Daily - 65% Off Now

Comments