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Stock Market News for April 14, 2016

Benchmarks finished in the green on Wednesday following a rally in financial stocks. Better-than-expected earnings results of JPMorgan helped boost the financial and bank stocks. Moreover, favorable trade data from China had a positive impact on the overseas market, which also palyed a major role in lifting the U.S. benchmarks. The Dow registered its best intra-day points as well as percentage gains in almost a month, settling at its highest level since Nov 6. The S&P 500 and the Nasdaq reached their highest settlement since Dec 4 and Dec 31, respectively.

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) increased 1.1%, or 187.03 points, to close at 17,908.28. The S&P 500 rose 1% to close at 2,082.42. The tech-laden Nasdaq Composite Index closed at 4,947.42, gaining 1.6%. The fear-gauge CBOE Volatility Index (VIX) decreased 6.8% to settle at 13.84. A total of around 7.6 billion shares were traded on Wednesday, higher than the last 20-session average of 7 billion shares. Advancers outpaced declining stocks on the NYSE. For 75% stocks that advanced, 22% declined.

Shares of JPMorgan Chase & Co. (JPM) increased 4.2% after the company reported better-than-expected earnings results. Though JPMorgan’s first-quarter earnings of $1.35 per share was lower than the year-ago quarter by 7%, it managed to beat the Zacks Consensus Estimate of $1.26. Although JPMorgan’s quarterly net revenue of $24.1 billion was down 3% from the year-ago quarter, it was more than the Zacks Consensus Estimate of $23.9 billion. This had a positive impact on financial and bank stocks.

The Financials Services Select Sector SPDR (XLFS) gained 3.1%, and was the biggest advancer among the S&P 500 sectors. Besides JPMorgan, another Dow component Goldman Sachs Group, Inc. (GS) rose 3.6%. Key holdings from the sector such as, Bank of America Corporation (BAC), Citigroup Inc. (C), Wells Fargo & Company (WFC), Berkshire Hathaway Inc. (BRK.B ) and U.S. Bancorp (USB) increased 3.9%, 5.6%, 2.6%, 1.2% and 2.1%, respectively.

Additionally, the SPDR S&P Bank ETF (KBE) rose 3.7%, registering its fourth straight session increase. Some of the key holdings of the bank sector including SVB Financial Group (SIVB), PacWest Bancorp ( PACW), MGIC Investment Corp. (MTG), Comerica Incorporated (CMA), New York Community Bancorp Inc. ( NYCB) and M&T Bank Corporation (MTB) rose 6.4%, 2.5%, 4.7%, 3.9%, 2.4% and 3.7%, respectively.

Moreover, overseas market improved following China’s encouraging trade data. According to General Administration of Customs, exports increased 11.5% on March, registering first monthly rise in nine months. It was preceded by a decline of 25.4% in February and was higher than economists’ forecasts of 8.5% rise. Further, imports last month declined by 7.6%, narrower than a 13.8% fall in February. China's trade surplus in March was $29.86 billion, lower than $32.5 billion registered in February.

Separately, oil prices slumped yesterday following mixed U.S. oil data. The U.S. Energy Information Administration (EIA) reported on Wednesday that the U.S. commercial crude oil inventories rose 6.6 million barrels to 536.5 million for the week ended April 8. It was higher than an increase of 6.2 million barrels reported by the American Petroleum Institute (API) a day earlier. Both the WTI crude and Brent crude fell 1% and 1.2% to $41.76 per barrel and $44.18 a barrel, respectively.

However, motor gasoline inventories fell 4.2 million barrels to 239.76 million, wider than analyst’s estimate of 1.4 million barrel drop. Also, gasoline production and distillate fuel production fell nearly 9.6 million barrels per day (bpd) and 4.8 bpd, respectively.

In economic news, economic activity improved in most districts of the U.S., according to the Fed’s Beige Book. All the 12 districts indicated moderate growth in economic activity since the previous Beige Book report. Consumer spending, nonfinancial services activity, residential real estate sales and labor market conditions improved in most districts. Also, most Districts posted moderate growth in the banking and finance sector. However, manufacturing activity and agricultural economic conditions remained mostly flat.

The Commerce Department reported that the U.S. retail sales fell 0.3% last month, in contrast to the consensus estimate of 0.1% rise. However, February’s figure was revised upward from a fall by 0.1% to flat.

Meanwhile, the U.S. Bureau of Labor Statistics reported that the U.S. Producer Price Index (PPI) for finished goods decreased 0.1% in March, declining for the sixth time in last eight months. Last month’s decrease was in contrast to the consensus estimate of 0.3% rise and was preceded by 0.2% drop in February.

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