Stock market news, October 16, 2014: Stock market futures were back in the red this morning (Thursday) as European markets slipped on growth concerns. Additionally, investors are growing nervous about the Federal Reserve's plans to wind down the last of its stimulus efforts. Dow futures fell more than 150 points, suggesting the markets are poised to fall back below the 16,000 mark this morning.
Yesterday, the Dow Jones dropped as much as 460 points amid weak economic data and renewed concerns about the Ebola virus. The index rebounded in the afternoon, but still suffered a 173-point decline. The S&P 500 Volatility Index (VIX) jumped another 9% on the day.
With so many bears out in force, our Chief Investment Strategist Keith Fitz-Gerald explains the strategy you need to trade after a "market reversal."
Here are the top news stories affecting the stock market today:
Streaming Slump: Shares of NetFlix Inc. (Nasdaq: NFLX) nosedived in post market trading hours on Wednesday, falling more than 25%. The trend continued this morning - NFLX was down another 26% premarket trading. The company reported weak third-quarter earnings and weaker subscription growth. NFLX added only 980,000 U.S. subscribers during the quarter, well below analysts' estimates of 1.37 million. The announcement came the same day that HBO Chief Executive Officer Richard Plepler said his channel plans to create its own streaming service in 2015 to challenge the top sector players like Netflix and Amazon.com Inc. (Nasdaq: AMZN).- Retail Woes Continue: Shares of eBay Inc. (Nasdaq: EBAY) were down more than 3% in premarket hours after the company reported lukewarm earnings and had its "buy" rating stripped by RBC Capital Markets. The company slashed its 2014 sales forecast ahead of the holiday season. However, its PayPal division saw revenues grow by 20% and its mobile volumes increase a whopping 72%. The company announced earlier this month that it plans to spin-off its PayPal division in 2015 - you can read more on that here...
- The Deal is Done: U.S. pharmaceutical company AbbVie Inc. (Nasdaq: ABBV) said it's recommending shareholders abandon the takeover attempt of Dublin-based rival Shire Plc. (Nasdaq ADR: SHPG). The company cited new attempts by the U.S. Treasury Department to curb tax inversions as the primary reason. Shire shares plummeted more than 30% yesterday. Should AbbVie shareholders approve the move, Shire will be paid a break-up fee of roughly $1.64 billion. AbbVie shares were up more than 0.5% in premarket hours.
- Correction: On Monday, shares of GoPro Inc. (Nasdaq: GPRO) slipped nearly 10% after a report by Yahoo! Sports suggested that one of its camera models may have been responsible for the traumatic head injury suffered by Formula 1 racer Michael Schumacher. But yesterday, the French journalist responsible for that report stated the link between the camera and the injuries were just "his" opinion and that he was not quoting Schumacher's son, as the market had believed. Shares of GPRO are still down more than 5% in premarket hours. Last week, Money Morning Defense & Tech Specialist Michael A. Robinson warned readers of GPRO's volatility. He suggested investors look to this better alternative in the wearable tech sector...
- Oil Prices Today: Crude prices were down again early Thursday morning. WTI crude, priced in New York, was down more than 1.5%, touching $80.33 at 8 a.m. EDT. Meanwhile, Brent crude, the global benchmark priced in London, slipped another 1% to fall below $83 per barrel. Prices continue to drop as Saudi Arabia prepares to maintain supply levels and drag OPEC into a price war with global competitors, as our energy expert Dr. Kent Moors explained on Monday.
- Gold Prices Today: Gold prices continued to show weakness this morning, falling roughly 0.25% to $1,241.80 per ounce. Silver prices dipped 0.22% to reach $17.42 per ounce.
- Economic Calendar: Today's economic calendar features four speeches by members of the Fed Open Market Committee, the EIA Natural Gas report, the EIA Petroleum Status report, an update on the housing market, and weekly jobless claims.
- Earnings Reports: Stay tuned for earnings reports from W.W. Grainger Inc. (NYSE: GWW), WD-40 Company (Nasdaq: WDFC), Schlumberger NV (NYSE: SLB), Philip Morris International Inc. (NYSE: PM), Mattel Inc. (NYSE: MAT), Marriott Vacations Worldwide Corp. (NYSE: VAC), Goldman Sachs Group Inc. (NYSE: GS), Google Inc. (Nasdaq: GOOG, GOOGL), BB&T Corp. (NYSE: BBT), and Capital One Financial Corp. (NYSE: COF).
Full U.S. Economic Calendar October 16, 2014 (NYSE: all times EDT)
- Philadelphia Federal Reserve Bank President Charles Plosser speaks at 8 a.m.
- Jobless Claims at 8:30 a.m.
- Industrial Production at 9:15 a.m.
- Philadelphia Fed Survey at 10 a.m.
- Housing Market Index at 10 a.m.
- EIA Natural Gas Report at 10:30 a.m.
- EIA Petroleum Status Report at 11 a.m.
- 3-Month Bill Announcement at 11 a.m.
- 6-Month Bill Announcement at 11 a.m.
- 30-Yr TIPS Announcement at 11 a.m.
- Kansas City Fed President Esther George speaks at 12:15 p.m.
- Atlanta Federal Reserve President Dennis Lockhart speaks at 12:30 p.m.
- St Louis Federal Reserve Bank President James Bullard speaks at 1 p.m.
- Minneapolis Federal Reserve Bank President Narayana Kocherlakota speaks at 2:30 p.m.
- Treasury International Capital at 4 p.m.
- Fed Balance Sheet at 4:30 p.m.
- Money Supply at 4:30 p.m.
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About the Author
Garrett Baldwin is a globally recognized research economist, financial writer, consultant, and political risk analyst with decades of trading experience and degrees in economics, cybersecurity, and business from Johns Hopkins, Purdue, Indiana University, and Northwestern.