S&P 500 Dings New Record High; Fast Food Stocks, GM, and PBYI in Focus

Stock market close for July 23, 2014: The S&P 500 today (Wednesday) gained 0.18% to set a new record high. The Nasdaq also gained, but the Dow Jones Industrial Average slipped.

Here's the scorecard from today's trading session:

DOW: 17,086.63 (-0.16%)
NASDAQ: 4,473.70 (+0.40%)
S&P 500: 1,987.01 (+0.18%)

The International Monetary Fund slashed the 2014 growth forecast for the U.S. economy, cutting the expected growth rate from 2.0% to 1.7% for the year. It cited a slowdown in the first half of the year due to winter weather and decreased spending. The agency predicts the U.S. economy will grow by more than 3% for the balance of 2014.

Here are the top stories that affected the stock market today:

  • Branding In Peril: The Wall Street Journalreported that customer confidence in American fast food companies is eroding in China. This is troubling for brands, as China has been long-considered one of the top growth markets. A number of U.S. companies including Yum! Brands Inc. (NYSE: YUM), McDonald's Corp. (NYSE: MCD), and Burger King Worldwide Inc. (NYSE: BKW) are embroiled in a scandal in which a foreign supplier sold the firms expired beef and chicken. According to a Sina survey of 25,000 Chinese respondents, 69% said they would no longer dine at Western-run restaurant chains.
  • Biotech Boom: Shares of Puma Biotechnology (NYSE: PBYI) surged 294% after the company announced that its breast-cancer drug yielded positive results in clinical trials. The company got another boost after Citigroup Inc. (NYSE: C) analysts raised Puma's price target from $99 to $292 per share. Find out more on this booming biotech here.
  • S&P 500

  • Rail Car Rules: The U.S. Transportation Department proposed new rules to improve safety and reduce explosions for trains carrying crude oil. The proposals, which include speed limits, better braking systems, and stronger communication techniques, come after several explosions and derailments have occurred in the U.S. and Canada. Advocates of the Keystone Pipeline, which remains held up by the Obama administration, argue that the pipeline's ability to pump more than 800,000 barrels per day would effectively end the need for increased rail shipments. The Dow Jones U.S. Railroads Index (DJUSRR) slipped 0.5% on the day.
  • Congress Inaction: The U.S. Senate voted 93-7 today to debate a bill that would eliminate tax advantages to companies that shift their operations abroad. The announcement comes in the wake of a record number of tax inversions by companies to shift operations to Europe where there is a more favorable tax rate.
  • Russia Standoff: The Obama administration announced plans to introduce another round of sanctions against Russia and its President Vladimir Putin if the Duma refuses to quell political and social unrest in Ukraine. Meanwhile, the European Union announced its own plans to target Russian companies, individuals, and sectors in a move to make Moscow act after the missile attack on Malaysian Airlines flight MH17. Shares of Market Vector Russia ETF Trust (NYSE: RSX) continued to trend downward on the afternoon.
  • Activist Pushback: Shares of PepsiCo Inc. (NYSE: PEP) struck a 52-week high after the company reported strong second-quarter earnings. The company attributed strong growth in its snack businesses, news that could beat back demands from activist investors who want the company to split its snack and beverage divisions into separate companies.
  • Another Day, Another Recall: U.S. auto giant General Motors Co. (NYSE: GM) announced six new recalls that span 717,950 U.S. vehicles. While these recalls are not linked to the ignition switch problems that have plagued the company, the announcement is another setback for the automaker. In the first seven months of 2014, the company has now recalled 30 million vehicles. GM will announce earnings before opening bell on Thursday - stay tuned to Money Morning for coverage.

Now our experts share some of the most important investment moves to make based on today's market trading - for Money Morning Members only:

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  • A Clear Way to Profit from a Graying Population: The Baby Boom generation, which includes everyone born from 1946 through 1964, is now entering retirement age (65) at a rate of 10,000 per day. Naturally, the more seniors there are, the more demand there will be on the medical community for better and safer therapies, and, the more ways to profit on this trend...
  • Don't Hesitate on This Industry Boom That's Already Here: If you follow the headlines, you'd think the last place to invest your hard-earned money is in healthcare. But here's the thing. As technology investors, our job is to look beyond the politics of the moment and take a look at what others may be missing. Turns out, if you picked the right healthcare investment over the last two years, you would have beaten the S&P 500's returns by more than 50%. And here's why...

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.

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