Biggest Stock market news today, March 27, 2014: The Dow Jones Industrial Average dropped 98.89 points to finish at 16,268.99 on Wednesday. The Nasdaq fell 60.69 points close at 4,173.58, while the S&P 500 slipped 13.06 points to settle at 1,852.56.
On Thursday, investors will be looking to GDP revisions and for any good news in the housing market. A gain in pending home sales would be surprising, and would increase the summer outlook for home sales.
Five Biggest Stories in Today's Stock Market, March 27, 2014
No Dice:The Federal Reserve rejected plans by Citigroup Inc. (NYSE: C) to boost dividends and buy back $6.4 billion in shares after a stress test revealed capital weaknesses this week. The announcement is a major blow to Citigroup, as it attempts to improve its reputation after its 2008 federal bank bailout. The Federal Reserve based its decisions off "deficiencies in how the bank plans for a future recession," according to the Wall Street Journal. Even though 16 banks announced dividends of $22.8 billion on Wednesday, Citigroup must wait until it is able to win regulators' approval. This is the second time in three years that the Fed has ruled against the bank's capital plans. Shares of Citigroup slipped 5.4% in post-hours trading.
Banks Behaving Badly: Once again, another U.S. bank has reached a settlement with the government over faulty mortgage securities. On Wednesday, Bank of America (NYSE: BAC) announced it will pay $9.3 billion to settle claims over failed mortgage bonds that the firm sold to Fannie Mae and Freddie Mac. On the same day, the company's former CEO Kenneth Lewis agreed to pay $10 million and will be barred from serving as a company director or official of a public company for three years after settling a lawsuit that he misled investors.
A Disaster on Day One: Candy Crush Saga creator King Digital(Nasdaq: KING) had the worst trading debut of 2014. The stock fell by 15.6% to end Wednesday at $19. Investors remain deeply concerned about the long-term profitability of a company that relies on 80% of its revenue from one mobile video game.
Yet Another Recall: It seems that automotive recalls are the rave of the industry. On Wednesday, Nissan Motor Co. Ltd. (OTC: NSANY) announced it will recall more than one million automobiles in North America to address a software problem that may hinder front passenger airbags from deploying during an accident. The recall includes the 2013 Infiniti JX35, 2013-2014 Altima, Leaf, Pathfinder and Sentra vehicles, 2013 NV200 cargo vans, and the 2014 Infiniti Q50 and QX60 models. The announcement comes a few weeks after General Motors Company (NYSE: GM) and Toyota Motors Corp. (NYSE: TM) announced recalls over safety issues as well.
The Boom Continues: According to the Energy Information Administration, the United States' huge boom in shale oil has pushed the nation above a whopping 10% of global production output. The U.S. produced 7.84 million barrels per day in 2013, raising the U.S. global share from 9% to 10.4%. Meanwhile, production of tight oil in the Eagle Ford, Bakken, and other shale formations averaged 3.22 million barrels per day in Q4 2013. As new technologies and fields come online, that number will continue to rise.
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U.S. Economic Calendar March 27, 2014 (all times EST)
Gross Domestic Product at 8:30 a.m.
Jobless Claims at 8:30 a.m.
Cleveland Federal Reserve President Sandra Pianalto speaks at 8:30 a.m.
Corporate Profits at 8:30 a.m.
Bloomberg Consumer Comfort Index at 9:45 a.m.
Pending Home Sales Index at 10 a.m.
EIA Natural Gas Report at 10:30 a.m.
Kansas City Fed Manufacturing Index at 11 a.m.
3-Month Bill Announcement at 11 a.m.
6-Month Bill Announcement at 11 a.m.
52-Week Bill Announcement at 11 a.m.
7-Yr Note Auction at 1:00 p.m.
Fed Balance Sheet at 4:30 p.m.
Money Supply at 4:30 p.m.
Chicago Fed President Charles Evans speaks at 9:30 p.m.
Key Companies Reporting Earnings March 27, 2014
Consensus earnings per share for Accenture plc. (NYSE: ACN) is $1.04.
Consensus earnings per share for Signet Jewelers Ltd. (NYSE: SIG) is $2.15.
Consensus earnings per share for Lululemon Athletica Inc. (Nasdaq: LULU) is $0.72.
Consensus earnings per share for Gamestop Corp. (NYSE: GME) is $1.92.
Consensus earnings per share for Worthington Industries, Inc. (NYSE: WOR) is $0.60.
Consensus earnings per share for Red Hat Inc. (NYSE: RHT) is $0.37.
Others Reporting Earnings
Commercial Metals Co. (CMC), Conn's, Inc. (CONN), Winnebago Industries (WGO), Fred's, Inc. (FRED), Cardiome Pharma Corp. (CRME), Echo Therapeutics, Inc. (ECTE), Zynex, Inc. (ZYXI)
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.