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DJIA Today, Oct. 9, 2014: The Dow Jones Industrial Average plummeted 334 points Thursday, giving back all of yesterday's gains. U.S. markets tumbled on lingering concerns about global economic growth and after St. Louis Federal Reserve Bank President James Bullard said the market's view on pending interest rate hikes and the Fed's view are conflicting. The S&P Volatility Index (VIX) soared 25% on the day.
Here's the scorecard from today's trading session:
Dow: 16,659.25, -334.97 (-1.97%)
S&P 500: 1,928.21, -40.68 (-2.07%)
Nasdaq: 4,378.34, -90.26 (-2.02%)
Bullard, a non-voting member of the Fed Open Market Committee, told a research conference audience this morning that the "markets are making a mistake" in terms of optimism about interest rate hikes. Meanwhile, Germany reported its weakest export levels since January 2009, driving panic over economic growth in the European bloc's largest economy and the broader EU economy at large.
Crude oil prices were also down again today. West Texas Intermediate slumped another 2.4% this afternoon, as rising concerns on supply have been hitting the markets hard. Meanwhile, Brent crude, the global benchmark, slipped 2% to fall to its lowest levels since June 2012.
Now, here's a breakdown of the other top stories in the stock market today:
- The Activist Acts: In an open letter to Apple Inc. (Nasdaq: AAPL) Chief Executive Officer Tim Cook, billionaire activist investor Carl Icahn said he believes the company's stock should be valued at $203, more than 100% its current value. Icahn said the company has the opportunity to boost its share value by returning a large share of its "excessive liquidity" to its shareholders through a stock buyback. He encouraged the company to make a tender offer with its roughly $133 billion net cash. Despite the sharp downturn in the market today, Apple shares were up nearly 0.2% on the day.
- Merger Mania: The biotech merger boom continued this afternoon, with Auxilium Pharmaceuticals Inc. (Nasdaq: AUXL) shares surging 9%. The company agreed to be acquired today by Ireland-based Endo International Plc. (Nasdaq: ENDO) for $1.67 billion in cash and stock. Shares of Endo slipped 5.9% on the day, although the deal will be a significant boon to its men's health business.
About the Author
Garrett Baldwin is a globally recognized research economist, financial writer, and consultant with degrees from Northwestern, Johns Hopkins, Purdue, and Indiana University. He is a seasoned financial and political risk analyst, with a focus on stocks, hedge funds, private equity, blockchain, and housing policy. He has conducted risk assessment projects for clients in 27 countries, and consulted on policy and financial operations for some of the nation's largest financial institutions, including a $1.5 trillion credit fund, a $43 billion credit and auto loan giant, as well as two of the largest Wall Street banks by assets under management.
Garrett joined Money Map Press as an economist and researcher in 2011, specializing in alternative strategies with an emphasis on fundamental and technical analysis.