Stock Market Today, Oct. 1, 2014:U.S. markets fell sharply Wednesday, with the Dow Jones Industrial Average slumping 238 points and the Nasdaq shedding nearly 1.5%. The decline was triggered by disappointing economic data and airline stocks plunging over concerns about a global Ebola outbreak after the Centers for Disease Control and Prevention confirmed the first case of Ebola in the United States in an isolated patient in Dallas, Texas.
Here's the scorecard from today's trading session:
The NYSE ARCA Airline Index (INDEX NYSE: XAL) slipped nearly 3.1% at today's nadir. Shares of Southwest Airlines Co. (NYSE: LUV) dipped 3.6%, Delta Air LinesInc. (NYSE: DAL) shares fell 3.4%, and American Airlines Group Inc. (Nasdaq: AAL) shares fell 3%. Although travel to and from Africa is a small part of the international industry, the news provides enough uncertainty to disrupt certain portions of global operations.
Concerns about Ebola overshadowed news that an important manufacturing index slipped again in September, renewing concerns about the U.S. economic recovery. The Institute for Supply Management's manufacturing survey slipped to 56.6, below the 58.5 consensus estimates from economists. In addition, weak economic data in Europe has investors on edge ahead of the European Central Bank's policy meeting on Thursday in Naples, Italy.
On the day, the S&P 500 Volatility Index (VIX), which gages fear in the market, jumped another 5% to reach 17.17 on the day.
Here's a breakdown of today's other top stories and stock performances:
Auto Data: Riding the best third quarter in eight years, U.S. automakers offered some lackluster news today, raising concerns the good times could be coming to an end. Auto companies announced September sales jumped 9%, according to Autodata. The level missed consensus expectations. Shares of Ford Motor Co. (NYSE: F) slipped 1% this afternoon, marking its third consecutive trading session in the red. Its rival General Motors Co. (NYSE: GM) saw shares increase by 1.7% today on news that the company expects to return to profitability in Europe by 2016.
Europe Weighs: According to a survey by Markit, Germany's manufacturing sector contracted in September, marking the first negative monthly reading in 15 months. The news raises concerns that Russian sanctions against European nations are taking a heavy toll on the economy. The DAX slipped by more than 1% today. Meanwhile, investors continue to monitor actions of the European Central Bank, which is under renewed pressure to unleash its own massive quantitative easing program in the near future.
Solar IPO: Shares of Vivint Solar Holdings Inc. (Nasdaq: VSLR) jumped more than 4% intraday after the company's successful initial public offering. The solar installation firm priced its shares yesterday at $16 a share, raising $300 million. The stock opened today at $17.01.
Buffett's Pull: Following significant criticism from shareholders, most notably Warren Buffett, The Coca-Cola Co. (NYSE: KO) announced it will revise its compensation plan for its company executives. The Berkshire Hathaway Inc. (NYSE: BRK.A) chairman called the current plan "excessive," with some estimates stating that up to $13 billion could be shifted from shareholders to company principals over the next five years. Under the new plan, the company will issue fewer bonuses that rely on stock options and more cash bonuses instead. Buffett has said that stock options are sometimes lottery tickets that outsize rewards despite performance.
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's not a time to sell; it's a profit opportunity for tech investors. That's why Defense & Tech Specialist Michael A. Robinson is sharing 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.
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.