S&P 500 Falls for Third Straight Session on Syria Airstrikes, Weak European Data
By , Money Morning•
Stock Market Today, Sept. 23, 2014: The S&P 500 fell for a third session in a row and the Dow Jones Industrial Average plunged 116 points as U.S. airstrikes on Syria and continuing economic problems in the European Union and China rattled global markets. U.S. President Barack Obama said that the U.S. military will continue its airstrikes against ISIS fighters, raising new concerns in the international community.
Today's downturn in U.S. markets followed a slide in European markets, which struggled on news of weakening business activity in France and decline in German manufacturing activity this month.
Gold prices took a turn today, finally rebounding from a streak of nine-month lows in recent trading sessions on these key factors.
Here's the scorecard from today's trading session:
Inversion Aversion: Following the announcement that the U.S. Treasury Department was enacting a number of rules to prevent inversions by American companies to reduce their tax burdens, shares of AbbVie Inc. (Nasdaq: ABBV) slipped more than 2% in afternoon trading. The new rules threaten AbbVie's deal with Shire Plc (Nasdaq ADR: SHPG). Shares of drug maker AstraZeneca Plc. (NYSE ADR: AZN), which was also targeted for acquisition, slipped by more than 4.5%, while shares of Shire were down more than 2%. A number of other pharmaceutical companies were also on the decline, including Abbott Laboratories (NYSE: ABT), Covidien Plc. (NYSE: COV), and Medtronic Inc. (NYSE: MDT).
The Big Break Up: International conglomerate Koninklijke Philips NV (NYSE ADR: PHG) announced plans to split into two distinct companies. As the company begins to overhaul its operations, the Phillips brand will remain as a stand-alone lighting business. Meanwhile, Philips will merge its healthcare and consumer-lifestyle products division into one company that will be called HealthTech. Shares of Philips were up more than 3.5% on the day.
Sign of a Slowdown: The World Trade Organization announced it has slashed its 2014 and 2015 forecasts for the trading of global goods, citing the rise of geopolitical conflicts and the recent Ebola outbreak as two primary limitations to growth. The WTO slashed its trade forecast for 2014 from its April estimate of 4.6% to 3.1%. This is significantly lower than the average 5.2% growth in trade over the last 20 years.
Dead Cat Bounce: Shares of Herbalife Ltd. (NYSE: HLF) experienced a "dead cat bounce" this afternoon, rising more than 9%. The company slumped yesterday on rumors that a large shareholder had divested his or her position. The company remains in the cross-hairs of Bill Ackman and his hedge fund.
Ackman May Sue: Speaking of Bill Ackman, the activist investor has threatened to sue Botox manufacturer Allergan Inc. (NYSE: AGN) if the company agrees to a deal to purchase Salix Pharmaceuticals Ltd. (Nasdaq: SLXP) without a vote of Allergan shareholders. Ackman has been aggressively working with Valeant Pharmaceuticals International Inc. (NYSE: VRX) to force a vote by Allergan shareholders over their proposed $53 billion hostile takeover bid.
Now our experts share some of the most important investment moves to make based on today's market trading - for Money Morning Members only:
A Post-Petrodollar Play for Triple-Digit Gains: It is now clear that both Russia and China are making concerted efforts to move off the petrodollar system. The result of this trend will roil the currency markets, and we can expect these seismic shifts to affect the U.S. dollar - and the stock market. The changes open up profit opportunities, too, and Peter Krauth has found the perfect stock to benefit from the petrodollar's demise.....
(Other) Investors Will Hate You for Using This Investment Strategy: Even with interest rates so low and the economy steadily improving, many nervous investors - worried about a correction - are selling off. Whenever this sort of negative noise is in the air, it is not a time to sell, but a profit opportunity for tech investors. That's why Defense & Tech Specialist Michael A. Robinson wants to share with you three strategies designed to turn market declines to your financial advantage. With them, you'll leave the nervous sellers in the dust...
252 Million Years Ago, This Nearly Wiped Out All Life... Tomorrow, It Could Solve Our Energy Problems: According to an April study issued in the Proceedings of the National Academy of Sciences, permafrost soil, which typically remains frozen all year, is thawing and decomposing at an accelerating rate. But after a shocking discovery, it seems something locked in the soil could become the fuel of the future... and you could profit big off the new revolution.