Stock Market News for October 21, 2016

Benchmarks finished in the red on Thursday following slump in oil prices and decline in telecom stocks. Continued crude oversupply concerns and stronger dollar had a negative impact on oil prices, which in turn weighed on energy stocks. Additionally, decline in shares of Verizon following its mixed third quarter results pulled telecom stocks downward. Moreover, European Central Bank’s (ECB) decision to keep interest rates unchanged boosted dollar.

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 0.2%, to close at 18,162.35. The S&P 500 fell 0.1% to close at 2,141.34. The tech-laden Nasdaq Composite Index closed at 5,241.83, also losing 0.1%. The fear-gauge CBOE Volatility Index (VIX) decreased 4.6% to settle at 13.75. A total of around 6.19 billion shares were traded on Thursday, lower than the last 20-session average of 6.42 billion shares. Decliners outpaced advancing stocks on the NYSE. For 55% stocks that declined, 40% advanced.

What Weighed On the Benchmarks?

After reaching its best level in 15 months on Wednesday following a decline in domestic crude inventories, oil prices fell yesterday. Total U.S. crude inventories of 468.7 million barrels for the week ended October 14, was 5.4% more than the year-over-year figure. Moreover, doubts persist over the production cut deal between the OPEC nations mainly because of the continuous internal problems between its members.

Also, the U.S. dollar index, DXY touched 98.32, its highest level in seven months following surge in domestic existing home sales and ECB’s decision to keep rates unchanged. Jump in dollar also weighed on oil prices. WTI crude fell 2.3% to $50.43 per barrel. Brent crude declined 2.5% to $51.38 a barrel. Decrease in oil prices led the Energy Select Sector SPDR (XLE) to fall 0.1%. The Dow component, Chevron Corporation ( CVX) lost 0.4%.

Moreover, Verizon Communications Inc’s (VZ) shares fell 2.5% after the company’s third quarter revenues missed the Zacks Consensus Estimate. Its subscribers for wireless postpaid phone fell 36,000 in contrast to an increase of 430,000 year-over-year. However, its earnings per share beat the Zacks Consensus Estimate. (Read More: Verizon Posts Mixed Q3: Earnings Beat, Revenues Lag )

Declines in Verizon led the telecom sector in the S&P 500 to fall 2%, its largest decline in last five weeks. Some of its key holdings including AT&T, Inc. (T) and Level 3 Communications, Inc. ( LVLT) lost 1.9% and 0.2%, respectively. Both the two companies possess a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here .

Further, ECB kept rates unchanged as expected, but President Mario Draghi’s comments resulted in an uncertainty in the markets. Draghi said that the policy makers “didn't discuss tapering or the intended horizon of our asset purchase program."

Economic Data on Focus

In economic news, initial claims increased last week by 13,000 to 260,000, matching the highest level in six-week and was also higher than the consensus estimate of 254,000. However, sales of existing homes rose 3.2% in September from August to a seasonally adjusted rate of 5.47 million, according to the National Association of Realtors.

Stocks That Made Headlines

Skechers Misses on Q3 Earnings & Sales; Stock Down

After witnessing a negative earnings surprise of 5.9% in the second quarter, Skechers USA Inc. (SKX) again missed the Zacks Consensus Estimate in the third quarter. ( Read More)

Schlumberger Earnings Beat, Revenues Miss in Q3

Schlumberger Ltd. (SLB) reported third-quarter earnings which beat the Zacks Consensus Estimate, but revenues missed the same. (Read More)

Crown Castle Earnings Miss, Revenues Beat in Q3

Crown Castle International Corp. (CCI) reported mixed financial numbers in the third quarter of 2016, wherein the top line outpaced the Zacks Consensus Estimate while the bottom line fell short of the same. ( Read More)

Rite Aid & Walgreens Delay Merger Deadline; RAD Stock Up

Rite Aid Corporation (RAD) and Walgreens Boots Alliance, Inc. ( WBA) have jointly agreed to postpone the deadline for the mega-merger to Jan 27, 2017, three months later than the planned deadline of Oct 27, 2016. ( Read More)

Is AT&T Eyeing Time Warner to Enter Media Industry?

AT&T Inc. (T) is currently engaged in informal talks with media giant Time Warner Inc. (TWX) to evaluate various business strategies including a possible merger. ( Read More)

Confidential: Zacks' Best Investment Ideas

Would you like to see a hand-picked "all-star" selection of investment ideas from the man who heads up Zacks' trading and investing services? Steve Reitmeister knows when key trades are about to be triggered and which of our experts has the hottest hand. Click for his selected trades right 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
 
VERIZON COMM (VZ): Free Stock Analysis Report
 
AT&T INC (T): Free Stock Analysis Report
 
LEVEL 3 COMM (LVLT): Free Stock Analysis Report
 
CHEVRON CORP (CVX): Free Stock Analysis Report
 
SKECHERS USA-A (SKX): Free Stock Analysis Report
 
SCHLUMBERGER LT (SLB): Free Stock Analysis Report
 
CROWN CASTLE (CCI): Free Stock Analysis Report
 
RITE AID CORP (RAD): Free Stock Analysis Report
 
WALGREENS BAI (WBA): Free Stock Analysis Report
 
TIME WARNER INC (TWX): Free Stock Analysis Report
 
To read this article on Zacks.com click here.