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Stock market news, October 16, 2014: Stock market futures were back in the red this morning (Thursday) as European markets slipped on growth concerns. Additionally, investors are growing nervous about the Federal Reserve's plans to wind down the last of its stimulus efforts. Dow futures fell more than 150 points, suggesting the markets are poised to fall back below the 16,000 mark this morning.
Yesterday, the Dow Jones dropped as much as 460 points amid weak economic data and renewed concerns about the Ebola virus. The index rebounded in the afternoon, but still suffered a 173-point decline. The S&P 500 Volatility Index (VIX) jumped another 9% on the day.
With so many bears out in force, our Chief Investment Strategist Keith Fitz-Gerald explains the strategy you need to trade after a "market reversal."
Here are the top news stories affecting the stock market today:
Streaming Slump: Shares of NetFlix Inc. (Nasdaq: NFLX) nosedived in post market trading hours on Wednesday, falling more than 25%. The trend continued this morning – NFLX was down another 26% premarket trading. The company reported weak third-quarter earnings and weaker subscription growth. NFLX added only 980,000 U.S. subscribers during the quarter, well below analysts' estimates of 1.37 million. The announcement came the same day that HBO Chief Executive Officer Richard Plepler said his channel plans to create its own streaming service in 2015 to challenge the top sector players like Netflix and Amazon.com Inc. (Nasdaq: AMZN).- Retail Woes Continue: Shares of eBay Inc. (Nasdaq: EBAY) were down more than 3% in premarket hours after the company reported lukewarm earnings and had its "buy" rating stripped by RBC Capital Markets. The company slashed its 2014 sales forecast ahead of the holiday season. However, its PayPal division saw revenues grow by 20% and its mobile volumes increase a whopping 72%. The company announced earlier this month that it plans to spin-off its PayPal division in 2015 – you can read more on that here…
- The Deal is Done: U.S. pharmaceutical company AbbVie Inc. (Nasdaq: ABBV) said it's recommending shareholders abandon the takeover attempt of Dublin-based rival Shire Plc. (Nasdaq ADR: SHPG). The company cited new attempts by the U.S. Treasury Department to curb tax inversions as the primary reason. Shire shares plummeted more than 30% yesterday. Should AbbVie shareholders approve the move, Shire will be paid a break-up fee of roughly $1.64 billion. AbbVie shares were up more than 0.5% in premarket hours.