Disappointing news that China's economic growth slowed in the first quarter sent the stock market today (Monday) reeling.
Just before noon, the Dow Jones Industrial Average dropped 0.61% to 14,773.75. The Standard and Poor's 500 Index slumped 0.75% to 1,576.87. The Nasdaq fell 0.80% to 3,268.45. Oil slipped 3.44% to $88 a barrel.
And the biggest loser of the day, gold plunged as much as 6.3%, hitting a low of $1,384.60.
Dragging stocks down was a report that China's economy grew at 7.7% in Q1, weaker than the 8% growth economists were expecting, and down from Q4's 7.9%. This rattled global markets, as fears spread that there would be continued lower demand for Chinese goods and services.
"The international situation continues to concern people, both in regard to Europe and China," John Carey, a fund manager for Pioneer Investment Management Inc., told Bloomberg News. "People are watching for some signs of improvement in both areas. Otherwise we're just in the early stages of earnings season, so people will have one eye on what's going on outside the U.S. and another close eye on what's happening with regard to earnings."
More than 75 members of the S&P 500 are scheduled to report earnings this week. Here are some to watch, along with the biggest headline makers in the stock market today.
Stock Market: Q1 Was One for the Record Books, So What's Next?
The U.S. stock market logged an impressive first quarter.
Shrugging off budget cuts, tax hikes, and more Eurozone misery, U.S. stocks climbed to record territory on several occasions.
On March 5, the Dow broke through its record close of 14,165, previously hit Oct. 9, 2007. Meanwhile, the S&P has been flirting with its 1,565 record high for weeks.
The most recent milestones came Thursday when the Dow Jones Industrial Average closed at yet another record, and the Standard & Poor's 500 Index finally closed above its all-time high.
Thursday closed out Q1 with the Dow adding 52.38 points, or 0.36%, to close at 14,578.54. The S&P tacked on 6.34, or 0.41%, to close at 1,569.19.
Here's a look at the quarter's biggest gains and losses, as well as what investors should do now as we head into April.
Dow Hits Record High – What Does That Say About the U.S. Economy?
Equity market cheerleaders got very excited about the Dow Jones Industrial Average hitting a new record high yesterday (Tuesday).
The Dow closed at 14,253.77, topping its previous record close of 14,164.53 on Oct. 9, 2007.
While it is nice to see a sign that equities are improving following the devastating shock of the financial crisis of 2008, today's Dow Jones Industrial Average is not the same index as it was in 2007.
In fact, if we look back at when the Dow Jones Industrial Average last exceeded 14,000, we'll see that the Dow seems to have less of a connection now to what is really happening in the economy than it did in 2007.
As Volatility Hits New Lows, It Could Be Time to Sell
The average daily price volatility of stocks has fallen more than 60% since the beginning of 2013. It's the biggest straight-line drop in some 82 years.
A lot of investors are rejoicing. After all, stocks have risen an average of 17% a year when volatility is as low as it is right now, Bloomberg reports.
There is, however, a dark side to low volatility. Namely, it tends to precede powerful reversals that can wipe out investors, as was the case in 2000 and early 2008, and at other key turning points over the past 100 years.
Today, I'm going to talk a bit about what low volatility means for you in terms of upside, and also show you how to protect yourself in a downslide.
Let's start with the concept of average daily volatility itself.
Is the Obama Stock Market Rally the Real Deal?
At first glance, there can be no doubt that U.S. President Barack Obama has been good for the stock market.
The Standard & Poor's 500 Index has rallied by nearly 700 points - just shy of 86% - since the president's first Inauguration on Jan. 20, 2009.
This is the best stock market performance for a presidential first term since World War II, even beating the 79.2% rally during President Bill Clinton's first term in the White House, from January 1993 to January 1997.
In fact, the only time stocks rallied more during a presidential first term was during Franklin Roosevelt's first term from March 4, 1933, to Jan. 20, 1937, when the Dow Jones Industrial Average rose 245% off of Depression-era lows.
In a very broad sense, the condition of the stock market at the start of President Obama's first term in 2009 can be compared to the stock market in 1933. In both cases, stock prices had collapsed and were trading at generational lows when both presidents took office. In both cases, share prices rallied substantially off of the bottom as economic conditions improved.
But all this really proves is that the first leg of any rally is usually the strongest and most profitable.
As the S&P 500 is at a five-year high and is zeroing in on the 1,500 level for the third time in its history, one has to wonder if the Obama Rally is sustainable or are we just reverting to the mean?
Stock Market Today Battles the Apple Effect
The stock market today was proof that one bad apple doesn't spoil the whole bunch.
The Dow was up 55 points by 3:15, the S&P 500 up 1 - but the Nasdaq did slump 20 points, dragged down by Apple Inc. (Nasdaq: AAPL).
Thursday's advance came on the heels of the Dow's 67-point rise Wednesday which was stoked by a vote in the House of Representatives to suspend the U.S. debt ceiling through May 19.
Also propelling gains Wednesday were strong results from tech heavyweights Google INc. (Nasdaq: GOOG), which beat estimates and spiked $38.63 points higher, and International Business Machines Corp. (NYSE: IBM), which rallied 4.4% after posting better-than-expected numbers.
To date, some 75% of the 134 companies in the S&P 500 Index that have reported results have handily beat expectations.
"People are just trying to digest all the earnings reports from the various companies. As long as the economy seems to get better the stock market will do well," Giri Cherukuri, portfolio manager who helps manage $3 billion at Oakbrook Investments LLC in Lisle, Illinois, told Bloomberg.
- Stock Market Today: How Earnings Are Shaping the Week
Stock Market Today: Rally Over Already?
The stock market today (Thursday) so far has failed to continue yesterday's rally that delivered the Dow Jones Industrial Average's biggest one-day gain since Dec. 20, 2011.
After Washington announced a fiscal cliff deal Tuesday, investors raced into stocks and other risk-on trades, relieved that the country wasn't going to tumble over the dreaded fiscal cliff.
"You've just removed a huge worry from the market," Jonathan Samson, chief investment officer at Samson Capital Advisors told The New York Times.
In response, the Dow finished the first trading day of 2013 up 308. 41 points, or 2.35%. The gains also propelled the benchmark index to its highest close since Sept. 14, 2012. Volume was heavy with more than 4.5 million shares changing hands on the Big Board.
The Standard & Poor's 500 Index added 36.23 points, or 2.54%, and the tech heavy Nasdaq tacked on 92.75 or 3.07%.
Gold gained $13 to close at $1,688.80; silver added 78 cents to $31.01, and oil gushed higher by $1.30 to finish the day at $93.12.
But by 10 a.m. today, the Dow had slipped more than 30 points, or 0.23%.
Some Wall Street analysts were quick to warn that the fiscal cliff euphoria will die out by next week, and that yesterday's rise was nothing more than a short-term relief rally.
"Considering there are so many headwinds facing the economy, including the debt ceiling negotiation in 60 days, the smart money knows the bullish sentiment will be short-lived. The lesson for investors here is 'buyer beware,'" Todd Schoenberger, managing partner at LandColt Capital wrote in an email to FOX Business Network.
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Here's When to Expect an Operation Twist Market Rally
After the U.S. Federal Reserve announced yesterday (Wednesday) that the central bank would extend Operation Twist, the markets dipped then climbed back to finish basically flat for the day.
Today all three major indexes are down nearly 2% or more. The Dow Jones sunk more than 250 points, or 1.96% to 12,573.57. The S&P 500 fell 2.23% to 1,325.51.
So when will the fun begin, if ever, following this new dose of stimulus?
That's what Money Morning Executive Editor William Patalon III wanted to find out.
In his Private Briefing newsletter yesterday, he asked Money Morning Chief Investment Strategist Keith Fitz-Gerald what investors should expect following this latest Fed move.
Bill wanted to know three things about the second round of Operation Twist:
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