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Pre-market trading report, March 26, 2014: The Dow Jones Industrial Average rose 91.19 points to finish at 16,367.88 on Tuesday. The Nasdaq increased 7.88 points to finish at 4,234.27, while the S&P 500 hit an intraday all-time high before falling to close at 1,865.62. Global stocks are up on positive U.S. economic data and an improved outlook on Ukraine.
Today's durable goods report is the most important data input of the week. A second solid gain would increase the outlook for the manufacturing sector. Meanwhile, Asian shares struck a two-week high this morning as investors saw good news on improved economic data and expectations that China will ramp up stimulus spending to keep its economy running above 7.5% growth.
Now, here are the five biggest stories moving markets today:
Five Biggest Stories in Today's Stock Market, March 26, 2014
- This IPO Could Get Crushed: On Wednesday, King Digital Entertainment PLC (NYSE: KING) will officially begin trading on the New York Stock Exchange. The maker of popular mobile game "Candy Crush Saga" has priced its shares at $22.50. The 10-year-old company raised $500 million at this price. However, reports suggest that company leaders are disappointed, given that they had set a target goal up to $24 a share. The IPO is valued at about 2.9 times more than King's projected sales this year. While that figure is scary enough, our Tara Clarke writes at Money Morning, there are three more statistics that investors should worry about when it comes to this IPO.
- The New Economy: St. Louis Federal Reserve Bank President James Bullard spoke on a panel this morning in Hong Kong over unconventional monetary policy. Bullard stated that Fed Chair Janet Yellen's statements on interest rates were in-line with private surveys on when the central bank may begin increasing interest rates around six months after ending QE3. The bank President also stated that he expects official U.S. unemployment to fall below 6% in 2014. Bullard's statements are one more reason why investors may want to consider our Chief Investment Strategist Keith Fitz-Gerald's three-tier plan on how to prepare for the aftermath of Janet Yellen's decisions.
- Another Big Tech Buy: On Tuesday night, Facebook Inc. (Nasdaq: FB) announced plans to purchase virtual reality goggle maker Oculus VR Inc. for nearly $2 billion in cash and stock. Details of the purchase include $400 million in cash and 23.1 million shares of company stock. Facebook CEO Mark Zuckerberg said that Oculus could create "the most social platform ever, and change the way we work, play and communicate." In a conference call, the CEO outlined the firm's intentions to ramp up advertising in the virtual reality world. Oculus' backers on Kickstarter will get no benefit out of the deal.
- Another Day, Another Delay: The Obama administration elected to delay the individual mandate for Americans unable to enroll by the March 31 deadline. According to official reports, consumers unable to complete applications on HealthCare.gov will be able to request an extension until mid-April. By checking a blue box on the website, Americans will be asked to use an honor system; while the government says it will not attempt to determine whether consumers are telling the truth.
- Post-Settlement Stock Boost: Just weeks after a multi-billion dollar settlement with the U.S. government over safety practices, Toyota Motors (NYSE: TM) announced the company will buy back up to 1.89% of its shares, or nearly $3.5 billion. The deal would be the company's largest stock buyback in more than 10 years. The company is in a favorable position these days given a weaker Japanese yen, which is boosting the profitability of exports.
Note: The Fed's 2014 taper means volatility ahead. So we've outlined how to find profits in a volatile market - like triple-digit gains in just days - if you start with this strategy...
U.S. Economic Calendar March 26, 2014
- MBA Purchase Applications at 7:00 a.m.
- Durable Goods Orders at 8:30 a.m.
- PMI Services Flash at 9:45 a.m.
- EIA Petroleum Status Report at 10:30 AM ET
- 2-Yr FRN Auction at 1:00 p.m.
- 5-Yr Note Auction at 1:00 p.m.
Key Companies Reporting Earnings March 26, 2014
- Consensus earnings per share for Lindsay Corp. (NYSE: LNN) is $1.13.
- Consensus earnings per share for Francesca's Holdings Corp. (Nasdaq: FRAN) is $0.28.
- Consensus earnings per share for Movado Group Inc. (NYSE: MOV) is $0.31.
- Consensus earnings per share for Paychex Inc. (Nasdaq: PAYX) is $0.42
Others Reporting Earnings
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About the Author
Garrett Baldwin is a globally recognized research economist, financial writer, and consultant with degrees from Northwestern, Johns Hopkins, Purdue, and Indiana University. He is a seasoned financial and political risk analyst, with a focus on stocks, hedge funds, private equity, blockchain, and housing policy. He has conducted risk assessment projects for clients in 27 countries, and consulted on policy and financial operations for some of the nation's largest financial institutions, including a $1.5 trillion credit fund, a $43 billion credit and auto loan giant, as well as two of the largest Wall Street banks by assets under management.
Garrett joined Money Map Press as an economist and researcher in 2011, specializing in alternative strategies with an emphasis on fundamental and technical analysis.