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Stock market today, January 2, 2015: Happy New Year! Stock market futures for Friday forecasted a 76-point gain for the first day of trading in 2015. The markets will look to set the tone for another strong year. The Dow Jones Industrial Average index increased by 7.5% in 2014; meanwhile, both the S&P 500 and Nasdaq Composite increased by more than 11% for the year.
Today, investors will react to a slew of economic data. Up first will be the Markit U.S. manufacturing PMI, which analysts project an increase to 54 in December. Next, the ISM manufacturing index is expected to have fallen to 57.5 in December. Homebuilder stocks will react to the November construction spending report, which analysts believe rose by 0.4% over the period.
Here's what else you should know about stock market news today – including your "Money Morning Tip of the Day" – to make your Friday profitable:
- Taking Off: Shares of Southwest Airlines Co. (NYSE: LUV) rose more than 1.1% this morning as falling oil prices continue to benefit the airline industry. Southwest was the top-performing stock on the S&P 500 in 2014, rising roughly 125%. LUV was followed by Electronic Arts Inc. (Nasdaq: EA) at 105% and Edwards Lifesciences Corp. (NYSE: EW) at 94%. The worst performer on the S&P 500 in 2014 was Transocean Ltd. (NYSE: RIG) which fell on falling oil prices by 63%.
- It's Official: Shares of newly formed Walgreens Boots Alliance Inc. (Nasdaq: WBA) debuted this morning. Drug-store chain Walgreen Inc. finished its acquisition of Alliance Boots on Wednesday. The new company formed after Walgreen finished buying the remaining 55% of Alliance Boots that it didn't yet own. WBA shares were down slightly at 0.2% pre-market. Here's the full story behind the WBA merger…
- Another Recall: Shares of General Motors Co. (NYSE: GM) slipped more than 0.5% on news of three more three recalls covering 92,000 pickup trucks and sports utility vehicles. The company said it will take up to an $800 million charge during its fourth-quarter earnings report. In 2014, GM recalled 2.6 million vehicles over a faulty ignition switch that has been blamed for 42 deaths and 58 injuries. Last year, the global auto industry recalled more than 63.5 million vehicles in roughly 800 campaigns. GM recalls – and the lies behind them – will be "a legacy issue for years to come" according to Money Morning Capital Wave Strategist Shah Gilani…
- Oil Slump: Shares of oil and natural gas company Linn Energy LLC (Nasdaq: LINE) slipped more than 7.7% in pre-market hours on news that the firm slashed its dividend and capex-spending plans for next year. LINE said it will assume oil prices of $60 per barrel for its 2015 budget and outlook. Falling oil prices have crushed the company's stock over the last year. The stock is now off from its 52-week high by more than 67%.
- Oil Prices Today: Oil prices were slipping again this morning as oversupply concerns continue to rattle the markets. February 2015 futures for U.S. crude, priced at the NYMEX in New York City, decreased by nearly 1% to hit $52.38 per barrel. Meanwhile, Brent crude, priced in London, dropped more than 1.3% to hit $55.92 per barrel. Despite pleas from members of its own cartel, leading OPEC producer Saudi Arabia has refused to concede market share and cut production in the face of rising U.S. shale production.
- Earnings Reports: Stay tuned for an earnings report from Exponent Inc.(Nasdaq: EXPO).
Full U.S. Economic Calendar January 2, 2015 (NYSE: all times EST)
- PMI Manufacturing Index at 9 a.m.
- ISM Manufacturing Index at 10 a.m.
- Construction Spending at 10 a.m.
- Global Manufacturing PMI at 11 a.m.
- 3-Month Bill Announcement at 11 a.m.
- 6-Month Bill Announcement at 11 a.m.
- Fed Balance Sheet at 4:30 p.m.
- Money Supply at 4:30 p.m.