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The Dow Jones and the S&P 500 both declined for the fourth-consecutive trading session. The Dow plunged 186 points as retail sales hit an 11-month low and oil prices swung significantly.
Dow: 17,427.09, -186.59, -1.06%
S&P 500: 2,011.27, -11.76, -0.58%
Nasdaq: 4,639.32, -22.18, -0.48%
The markets are still reacting to yesterday's announcement by the World Bank that it slashed its global growth outlook to 3% for 2015. That's down from the 3.4% forecast in the fall.
The CBOE Volatility Index (VIX), the market's fear gauge, jumped another 4.9% on the day.
What Moved the Markets Today: A steep decline in retail sales renewed concerns about global economic growth, while the basic materials sector fell roughly 2.4% on the day. The S&P 500 energy index rallied back after falling nearly 2.2% at one point during the day. Oil prices surged in the afternoon more than 4%. Early in the trading session Brent crude oil prices hit $46.19, trading near parity with WTI oil prices as OPEC's leading producer nations refuse to slash production and forfeit market share. However, Brent prices surged 4.1% to settle near $48.50 per barrel, and WTI prices jumped 5% to hit $48.21.
Here's a breakdown of today's other top stories and stock performances:
- Retailer Rout: Retail stocks slumped on news that December sales fell well below expectations. This ignited new concerns that consumer spending might not hit the lofty levels analysts had forecast for the fourth quarter. Shares of Sears Holdings Corp. (Nasdaq: SHLD) were down slightly, and Macy's Inc. (NYSE: M) fell 1.75% on news that retail sales hit an 11-month low. Specialty retailer CONN'S Inc. (Nasdaq: CONN) fell 2.25%, while rival Best Buy Co Inc. (NYSE: BBY) avoided the daily rout and saw shares increase 2%.
- Banking Blues: Jamie Dimon, CEO of banking giant JP Morgan Chase & Co. (NYSE: JPM), said today that "banks are under attack." From the sell-off in the sector today, one might think he was right. Shares of JPM slipped nearly 3.5% on news the firm reported a 6.6% decrease in fourth-quarter profits. The company said legal costs exceeded $1 billion last year as government investigations and allegations continue to pile up. Meanwhile, JPM rival Wells Fargo & Co.(NYSE: WFC) dropped nearly 1.2% despite meeting quarterly profit expectations. Shares of Goldman Sachs Group Inc. (NYSE: GS) slipped about 2.5% on the day.
- Merger Mania: Shares of Yahoo! Inc. (Nasdaq: YHOO) were down 1.64% as the January sell-off continues. The stock is now down roughly 5.9% or $3 since the beginning of the year. While nearly half the decline can be attributed to the company's large stake in declining Alibaba Group Holding Ltd. (NYSE: BABA) stock, investors are worried Yahoo! is considering a slew of unfriendly and costly acquisitions. Activist investors at hedge funds Starboard and Ironfire Capital have pressed Yahoo! to merge with online rival AOL Inc. (NYSE: AOL) and have raised concerns the company may pursue cable assets instead of boosting its video and online marketing platforms.
- Mining Mishap: Mining stocks had a second consecutive day to forget. Shares of Freeport McMoRan Inc. (NYSE: FCX) slipped another 11% on the day. The mining giant was the largest drag on the S&P 500 this afternoon. Shares of New Gold Inc. (USA) (NYSE: NGD) dipped 7.8%, and Brazilian mining giant Vale SA (NYSE ADR: VALE) fell more than 5.5%.
- Stocks to Watch: It wasn't all bad news for retail stocks Wednesday. Shares of GameStop Corp. (NYSE: GME) popped 10.5% this afternoon after the company received an "outperform" upgrade from analysts at Pacific Crest.
Now our experts share some of the most important investment moves to make based on today's market trading – for Money Morning Members only:
- How the Terrorism "Trend" Is Moving Your Money Today: The recent terrorist attack in Paris has spurred the need for a difficult conversation. Here's the thing: The tragic irony in the financial world is that terrorism actually creates far more opportunity than it destroys. Money Morning Chief Financial Strategist Keith Fitz-Gerald explains what this means for your money in 2015 and beyond…
- CES 2015: How to Profit from the Hottest Tech Trends: According to the Consumer Electronics Association trade group, Americans will buy 1.43 million UHDTV sets, or roughly 5% of televisions sold nationally, in 2016. That's a 60-fold increase from 2013, when UHDTVs debuted. And of course, there's big profit potential in all those UHDTVs our fellow Americans will be buying. So hit the floor of the Consumer Electronics Show 2015 with Money Morning Tech Specialist Michael A. Robinson to start profiting today…
- Why the 'Big Money' Still Believes in Auto Stocks:S. auto sales were up big in 2014 and are expected to stay strong in 2015.Oil prices have collapsed and are expected to stay low, fueling demand for pickup trucks, SUVs, and RVs… Indeed, signs of a boom time for the American auto industry appear aligned, but auto stocks are trading at depressed values compared to the rest of the market. Are auto stocks ripe to buy, or are they simply a value trap? Here's the real answer.
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.