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U.S. stock markets retreated Monday in a broad sell-off, fueled by new concerns about weaknesses in global manufacturing, sluggish U.S. retail sales, and an embattled Japanese economy.
The S&P 500 had its biggest one-day drop in more than five weeks. The Nasdaq suffered its steepest decline in seven weeks. The S&P 500 Volatility Index (VIX), the market's fear gauge, jumped 7.2% on the day.
Dow: 17,776.80. -51.44, -0.29%
S&P 500: 2,053.44, -14.12, -0.68%
Nasdaq: 4,727.35, -64.28, -1.34%
What Moved the Markets Today: The global retreat of oil prices halted during today's trading session. Oil prices had their best one-day gain since August 2012, with West Texas Intermediate gaining nearly 5%. Brent crude jumped more than 4%, although the broader energy sector was down 0.4% on the day.
However, markets also contended with a rash of weak retail reports from the Thanksgiving holiday weekend and a number of global manufacturing indices that signaled weakening Asian and European growth in November. Gold prices jumped above $1,200 for the first time since October in the wake of a credit downgrade of Japan's economy by ratings agency Moody's.
Now check out the day's most important market notes:
- Retail Rubble: U.S. retailer stocks slipped this afternoon on news the Thanksgiving holiday shopping weekend was significantly weaker than last year's. Revenue this year was 11.3% lower for the same four-day period in 2013, according to the National Retail Federation. Shares of J.C. Penney Co. Inc. (NYSE: JCP) slipped by nearly 6%. Shares of Macy's Inc. (NYSE: M) dipped by more than 2.5%. And electronics retailer Best Buy Co. Inc. (NYSE: BBY) retreated by 5.4%.
- Another Fat Finger: Shares of Apple Inc. (Nasdaq: AAPL) slumped as much as 6.4% in a single minute this morning is what looks like a mini-flash crash. A technical aspect or possible combination of aspects of Apple stock fueled a quick sell-off of the tech giant's stock. Here's a full breakdown of one of today's craziest moments in the markets. The stock remained down more than 3.25% on the day, weighed by concerns in the retail sector.
- Good News in Oil: Two key U.S. Federal Reserve officials announced in separate speeches today that falling oil prices will be beneficial to the U.S. economy. Federal Reserve Bank of New York President William Dudley and Fed Vice Chairman Stanley Fischer both offered views on oil prices, which have fallen by more than 40% since June. Dudley stated the decline will help spur consumer spending, which represents approximately 70% of U.S. gross domestic product. Meanwhile, Fischer said energy prices would not have a significant impact on inflation. He still expects the level to move close to 2% in 2015. The statements suggest the Fed remains committed to the same timeline for a possible interest rate hike in mid-2015.
- Betting on Big Blue: Shares of International Business Machines Corp. (NYSE: IBM) dipped by nearly 0.4% despite news the tech giant has signed a 10-year, multibillion-dollar agreement to provide cloud services to Dutch bank ABN AMRO. The deal gives IBM additional momentum as it continues to shift its business toward Internet-delivery services. Just last month IBM signed a seven-year deal to offer similar services to German airline giant Lufthansa.
- The Troubles Continue: Shares of Dreamworks Animation SKG Inc. (NYSE: DWA) dropped by more than 5.5% on news its recent film "Penguins of Madagascar" underperformed in its first five days. The animated film earned $36 million over the weekend, well below expectations of $47 million. The company continues to slide after a merger with Hasbro Inc. (NYSE: HAS) was called off.
Now our experts share some of the most important investment moves to make based on today's market trading – for Money Morning Members only:
- This Play Could Double Again – But There's Much More to It: Money Morning Chief Investment Strategist Keith Fitz-Gerald's recent small-cap stock pick has already doubled. And this human augmentation company is still a great buy – especially if you understand how to use Keith's favorite trading tactic. Here's how to put the power of the "free trade" to work for you to collect even bigger
- How We'll Play the 2014 Year-End Rally: Stocks are headed higher through year end for many reasons, but one in particular is telling. It's really simple, yet too many people have overlooked it. Indeed, most wouldn't even give it enough thought. And that would be a big mistake. As Money Morning's Shah Gilani explains, if you understand that one compelling reason, you can pick some winners – and pocket big profits – yourself.
- How Google Will Dominate the Future: Today Tech Specialist Michael A. Robinson reveals why Google is such an intriguing tech investment with enormous upside. This industry leader has somehow combined Warren Buffett's business genius with the futurist brain of Ray Kurzweil, Google's director of engineering. And there's nothing but profit ahead for investors…
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.