Stock market today, Aug. 6, 2014: The U.S. stock market was sluggish this afternoon, with benchmarks eking out modest gains. Concerns about geopolitical pressures in Ukraine temporarily abated, but investors are taking notice of brewing economic problems in Europe.
Here's the scorecard from today's trading session:
In addition to mounting concerns over Russia's military movement along the Ukraine border, a slew of bad data suggests a choppy road ahead for the European Union, which has a combined GDP that is roughly $600 billion larger than the U.S. economy.
This morning, Italy, the region's fourth-largest economy, slipped into a recession after reporting its second-quarter GDP slipped for a consecutive period. The news comes in the wake of Germany and the United Kingdom reporting weaker manufacturing and orders data than expected. Investors should watch tomorrow's monthly interest rate announcement from the European Central Bank.
Gold prices were up nearly 2% on the day, surpassing the $1,300 threshold this afternoon. Meanwhile, the Volatility S&P 500 (Index: VIX), which is a gage of investor fear, slipped more than 3% on the day.
Here are more of the top stories from today:
Merger Fall-Through: Shares of Sprint Corp. (NYSE: S) fell nearly 20% during today's trading session on news that the company has replaced its president and chief executive officer, Dan Hesse, with billionaire tech entrepreneur Marcelo Claure. The announcement comes within the same 24-hour stretch that the company dropped its bid to acquire T-Mobile US Inc. (NYSE: TMUS). Shares of T-Mobile slipped nearly 7% after the bid was withdrawn over internal concerns regarding U.S. regulatory approval. However, the company remains an attractive takeover target for foreign telecom companies looking to expand into the United States and compete against the nation's three largest carriers in AT&T Inc. (NYSE: T), Verizon Communications Inc. (NYSE: VZ), and Sprint.
Dead Deals: Investors remain cautious about "merger mania" after a number of high-profile deals have been withdrawn in 2014. Citing Thomson Reuters data (and including unsolicited takeover bids), Yahoo! Finance reports that companies have withdrawn $428.2 billion in deals already this year, far surpassing the $278.5 billion in withdraws last year. In addition to today's announcement by Sprint that it would drop its bid, Rupert Murdoch's Twenty-First Century Fox Inc. (Nasdaq: FOXA) also announced it has walked away from an $80 billion bid for Time Warner Inc. (NYSE: TWX). The announcement sent TWX shares tumbling more than 12% this afternoon. Here's an in-depth look at why the deal is currently off the table - plus several reasons why the merger may not be completely dead...
Stocks on the Decline: Shares of Groupon Inc. (Nasdaq: GRPN) were down more than 14% today after the company posted poor quarterly results after the bell on Tuesday. Meanwhile, shares of Cognizant TechnologySolutions Corp. (Nasdaq: CTSH) dropped nearly 12% on news that the company slashed its yearly sales growth forecast.
Dividend Plus: The U.S. Federal Reserve announced it has formally approved a five-cent dividend for embattled U.S. financial giant Bank of America Corp. (NYSE: BAC). Back in April, Bank of America discovered a reporting error during a "stress test" conducted by the central bank. The error forced Bank of America to slash its dividend and withdraw a proposed $4 billion stock buyback plan. This is the first time the company has raised its dividend in seven years.
On the Rise: One of today's big energy winners was WPX Energy Inc. (NYSE: WPX), which saw shares pop more than 12% after it announced domestic oil production increased 57% over last year. During the release of its unaudited second-quarter earnings report, the stock also received a boost from its booming natural gas production levels, which surpassed 2013 production.
Drink Up: Shares of Molson Coors Brewing Co. (NYSE: TAP) jumped more than 6% after the company beat second-quarter earnings on increased beer volumes. The beer company reported quarter earnings per share of $1.57, a strong beat of analysts' $1.47 expectations.
Now our experts share some of the most important investment moves to make based on today's market trading - for Money Morning Members only:
This Northern Metals Boom Will Give Us More Than 10 Times the Returns of the S&P 500: In the last three years, junior miners have, as a group, lost about 58%, while the S&P 500 is up 52%. But it's looking increasingly like we're entering a brand new boom phase, with junior gold miners up as much as 45.8% this year - with a lot more in store... Here are two to consider...
Put These Investing Classics on Your Vacation Reading Short List: August is prime vacation season. And if you're like Money Morning Executive Editor Bill Patalon, you want to use that time to catch up on your reading. Consider including a business book or two on that list. The time invested will have a long-term payoff. Here's a list of Bill's current favorite investment books...
This Miracle Material Is Our Secret Weapon in the Coming Energy War: China and Russia's $400 billion natural gas deal was one of the first shots in their energy war against the United States and Europe. But Defense & Tech Specialist Michael A. Robinson discovered one company's products that are a big part of the technology that provides our best defense in this coming war. And that makes this a "defense" technology we can feel proud about profiting from...
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.