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U.S. stock markets slumped Wednesday afternoon after a sell-off of two important bellwether companies and a shooting at the Canadian Parliament in Ottawa spooked investors. The Dow Jones today dropped 153 points, while the Nasdaq fell 36 points. The S&P 500 Volatility Index (VIX) jumped 14% on the day, ending its three-day streak of double-digit declines.
Dow: 16,461.32, -153.49 (-0.92%)
S&P 500: 1,927.11, -14.17 (-0.73%)
Nasdaq: 4,382.85, -36.63 (-0.83%)
What moved the markets: The Dow Jones slumped when investors diched shares of Boeing Co. (NYSE: BA) after the company beat earnings and raised its earnings forecast. Boeing registered an 18% increase in quarterly profits. However, analysts raised new concerns about rising costs of the airline manufacturer's 787 Dreamliner. The Nasdaq turned downward after Biogen Idec Inc. (Nasdaq: BIIB) slipped more than 5% on news that sales of its new multiple sclerosis drug, Tecfidera, fell short of analyst expectations.
Most notable economic news: Today's small uptick in the Consumer Price Index (CPI) will make investors wonder when the U.S. Federal Reserve will act on interest rates. But one economic story that fell under the radar was the announcement by Fifth Street Asset Management to postpone its initial public offering. The $6 billion credit-asset management firm said that increased volatility and unsettling market conditions – fueled by geopolitical trouble in Europe and China, the African Ebola outbreak, and other concerns – led it to pull the IPO. With a slew of additional IPOs on the horizon, analysts will wonder if some companies follow Fifth Street's lead.
Now here's a breakdown of today's other top stories and stock performances:
- A Record High: Shares of Apple Inc. (Nasdaq: AAPL) struck an all-time intraday high today of $104.11. The company continues to benefit from a surge of iPhone 6 sales. Apple stock remains on a tear after its strong earnings report from Monday afternoon. The question now is: Just how high can Apple stock go? Our tech expert Michael A. Robinson visited FOX Business to discuss where he sees Apple stock going next. To see the full interview, click here.
- Tech Turnout: Shares of Yahoo! Inc. (Nasdaq: YHOO) and Broadcom Corp. (Nasdaq: BRCM) were today's top S&P gainers after both companies rallied on strong earnings reports. Yahoo jumped more than 5% intraday after it bested Wall Street expectations and reported a big gain that was buoyed by the Alibaba Group Holding Ltd. (NYSE: BABA) IPO. Meanwhile, shares of Broadcom were up more than 6% intraday after the company reported quarterly earnings of $0.91 per share. This topped Wall Street per-share expectations of $0.84.
- Tragedy in Moscow: Following the death of its chairman and chief executive officer Christophe de Margerie, French energy giant Total SA (NYSE ADR: TOT) appointed refining head Patrick Pouyanne as its new CEO and former CEO Thierry Desmarest as non-executive chairman. Shares of Total dipped more than 1.5% on the day. De Margerie died on Monday after his private jet collided with a snowplow at a Russian airport.
- 3D Slump: Shares of 3D Systems Corp. (NYSE: DDD) slipped by more than 15% this afternoon after the company slashed its full-year revenue outlook. The company also announced that it expects its third-quarter revenue to fall between $164 million and $169 million. That is far below Wall Street's initial expectations of $186 million.
- Electric Slide: Shares of Tesla Motors Co. (Nasdaq: TSLA) slipped more than 1.5% today after the company was hit by two forms of bad news. First, shareholder Daimler AG (USA) (OTCMKTS: DDAIF) sold its 4% stake in the company for $780 million. Second, the auto capital of the United States, Michigan, announced it had banned Tesla sales of vehicles directly to the consumer. Michigan has become the fifth state to ban the direct-to-consumer sales model that bypasses dealerships. Here's why this news isn't a panic signal, but a "buy" signal…
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.