DJIA Plunges 334 Points Today in Biggest Drop of 2014

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:

    DJIA

  • 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.

  • What Will Europe Do: During a speech on economic reform today, European Central Bank leader Mario Draghi barraged political leaders in Europe and demanded they accelerate new reforms. Draghi said that without reform and a healthy financial system, no European quantitative easing (QE) program would be successful. Investors took this as a sign that Draghi does not plan to print in the near future unless EU leaders act immediately on new policy.
  • Soda Wars: Shares of PepsiCo Inc. (NYSE: PEP) slipped marginally despite reporting strong earnings this morning and beating market expectations by $0.07 per share. The company and its rival, The Coca-Cola Co. (NYSE: KO), both acknowledge, however, that rising junk food taxes and levies on sugar in Mexico and California respectively are hurting their bottom line.
  • A Bold Strategy: Online giant Amazon.com Inc. (Nasdaq: AMZN) announced plans to open its first brick-and-mortar location in New York City. The Wall Street Journal reports that the location will sit on 34th Street, under the shadow of the Empire State Building. The location will also provide New Yorkers with a place to pick, return, and exchange orders. For months, some analysts have argued that Amazon should snap up struggling retailer RadioShack Corp. (NYSE: RSH).

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

  • The Profit Opportunity in Hong Kong's Unrest: Most investors haven't got a clue about what Hong Kong's riots represent, let alone the investment potential that's being unleashed there. As a result, they're going to miss out on some really terrific profit opportunities. But before we get to the best way to play this, understanding what's driving the unrest is key...
  • The European Crisis Is Going Global - and We're Along for the Ride: Recently one European leader offered a unique response for dealing with the financial crisis and debt bubble. On the surface, it appears a sound approach. But when you scratch beneath, it turns out just the opposite is true. Developed economies would do well to consider the true state of this country's example of a "model" recovery before an even more catastrophic, future arrives, and erupts...
  • The Best Way to Profit from Crude Oil Prices Right Now: In today's environment, picking winning oil stocks is more about where a company drills, how it manages its assets and operations, and the broader flow of supply and demand. In this case, it's all about selecting the right target - companies that are built to weather the inevitable dips in the price of crude. And there are plenty of them out there...

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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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