Market recap for April 10, 2017

Stock market indices and yesterday’s changes
How did the overall markets do yesterday?

Dow Jones Industrial Average: 20,658.02 (+1.92, +0.01%)
Reflects changes in 30 well-known stocks (e.g. Apple, General Electric, IBM, Exxon Mobil). Daily movements  of +/- 100 points are considered to be large.

S&P 500: 2,357.16 (+1.62, +0.07%)
Reflects changes in 500 stocks that includes large companies across all sectors. Because it consists of so many diverse companies, it is considered one of the best representations of how the stock market is doing. Daily movements of +/- 10 points are considered to be large

NASDAQ: 5,880.93 (+3.11, +0.05%)
Reflects changes in an index of more than 3,000 stocks that consists mainly of technology companies. Stocks such as Google, Amazon.com, and Microsoft are traded on the NASDAQ. Daily movements of +/- 30 points are considered to be large.


Top financial headlines
What caused the markets to go up or down yesterday?

The price of oil went up again…
The price of oil went up nearly 2% on Monday, in a continuation of the rally that started Thursday night following news of the US air strike in Syria, as middle east tensions often increase the price of oil due to the large amount of supply that comes out of the region. However, prices continued upwards yesterday as an oilfield in Libya was shut down after a group blocked a pipeline linking it to an oil terminal in the region.

Why do we care? There are many stocks that benefit from higher oil prices (i.e. big names such as Exxon and Chevron, but also dozens of smaller energy exploration and production companies, midstream names that transport oil, and refineries. Increases in energy prices, all else being equal, should lead to higher earnings and profits for these companies and as a result their stock prices increase, which has a positive effect on the overall market. The Energy sector within the S&P 500 gained nearly 1% on Monday.


Investors are ready for earnings season to begin this week…
Earnings season kicks off imminently, with reports from some of the biggest banks due out later this week. Investors will be closely watching results to see if companies can report solid earnings growth and therefore provide evidence that the rally over the past several months is justified.

Why do we care? Every 3 months, public companies are required to report their quarterly earnings (i.e. how much they sold, what % was profit, what were their expenses, etc.). Wall Street analysts come up with earnings expectations for companies, so when a company “beats” consensus expectations the stock price tends to rise, whereas when a company “misses” consensus expectations the stock price tends to fall.


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