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The Dow Jones today rebounded strongly after a rough week, adding 263.10 points. The Nasdaq and S&P 500 also saw gains on the day, buoyed by strong performances in the tech sector. The S&P 500 Volatility Index (VIX) dipped almost 12% on the day.
What moved the Dow: The Dow rebounded on stronger than expected housing figures. In addition, rising consumer sentiment hit a seven-year high in the face of concerns about an Ebola outbreak. U.S. housing starts increased by 6.3% in September, surpassing expectations of 4.6% growth. However, building permits, which are a signal of future construction, gained a mere 1.5% in September, falling short of expectations of a 2.3% increase. The Thomson Reuters/University of Michigan preliminary sentiment index for October hit 86.4, its highest level since July 2007. Consensus expectations called for a reading of 84.
Most notable economic news: In addition to positive news about rising housing starts, shares of U.S. homebuilders also rose on news that mortgage giants Fannie Mae and Freddie Mac are closing in on a deal that might boost mortgage lending across the country. Shares of Toll Brothers Inc. (NYSE: TOL) gained nearly 3%. Shares of D.R. Horton Inc. (NYSE: DHI) rose 6%. And, shares of KB Home (NYSE: KBH) were up almost 7% on the day.
Dow: 16,380.34, +263.10 (1.63%)
S&P 500: 1,886.77, +24.01 (1.29%)
Nasdaq: 4,258.44, +41.05 (0.97%)
Now, here's a breakdown of today's other top stories and stock performances:
- Strong Report: Shares of General Electric Co. (NYSE: GE) rose roughly 2.3% today after the company's third-quarter earnings beat analyst expectations. The company announced quarterly earnings of $3.54 billion, or $0.35 per share, beating last year's third-quarter results of $3.19 billion, or $0.31 per share.
- Electric Feel: Shares of Tesla Motors Co. (Nasdaq: TSLA) were mostly flat on Friday on news that the company might delay its Model X launch. Although more than 20,000 customers have placed preorders for the vehicle's anticipated launch in mid-2015, Morgan Stanley analyst Adam Jonas said in a research note that a delay could stretch the release into the third quarter of next year. Since Sept. 4, shares of Tesla are down nearly 25%. But Money Morning Chief Investment Strategist Keith Fitz-Gerald, who loves great long-term stocks that are beaten up in volatile times, says that this recent decline is creating an incredible buying opportunity for investors who have missed previous gains on the electric vehicle firm.
- Strong Report: Banking giant Morgan Stanley (NYSE: MS) announced strong third-quarter results, reporting an 83% increase in earnings compared to the same period in 2013. The company said it earned $0.65 per share, easily beating consensus analyst estimates of $0.54. Shares of the investment bank were up roughly 2.1% on the day.
- Tech Troubles: Shares of Google Inc. (Nasdaq: GOOG, GOOGL) were down more than 2.5% this afternoon, a day after the company announced it missed analysts' third-quarter earnings expectations. Despite the earnings miss, Google is poised for several breakthroughs over the next few years that could totally transform the healthcare sector, which represents one-sixth of the U.S. economy. To learn the six ways that Google is poised to profit while leaving its mark on America's most important sector as more baby boomers retire, go here.
- She Said What: Federal Reserve Chairwoman Janet Yellen said in a speech today that she is greatly concerned about the rising levels of inequality in the United States that have surged over the last five years. With inequality levels now reaching 100-year highs, Yellen cited surging student loan debts and declining levels of entrepreneurialism as problems that could stunt productivity and economic growth in the future. Yellen acknowledged the problems, but never cited the source of them. Of course, our Shah Gilani has exposed the real causes of booming income inequality in the United States: the policies of the Federal Reserve.
Now for three of today's best profit opportunities from our investing experts – for Money Morning Membersonly (Not a Member? Sign up now – it's free):
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.