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The Dow Jones Industrial Average (DJIA) and the S&P 500 both declined for the fifth consecutive trading session Thursday, while one of the most shocking currency decisions in recent history hammered global equity markets.
Dow: 17,320.71, -106.38, -0.61%
S&P 500: 1,992.67, -18.60, -0.92%
Nasdaq: 4,570.82, -68.50, -1.48%
The Swiss National Bank abandoned its current economic policy that prevents the euro/Swiss franc exchange rate from falling below 1.20.
The Swiss franc surged as much as 39% against the euro and U.S. dollar on the day. The move also pushed gold prices to a four-month high.
CBOE Volatility Index (VIX), the market's fear gauge, jumped another 4.24% on the day.
What Moved the Markets Today: The Swiss National Bank (SNB) stunned the world today when it abandoned its currency policy to prevent significant euro depreciation. The news sent shockwaves across markets and into the boardroom of every macro hedge fund and currency trading office in the world.
On the home front, U.S. data continued to drag on the markets. Initial jobless claims for state unemployment benefits rose by 19,000 to a seasonally adjusted 316,000 for last week. This is a steep increase over economist expectations. Meanwhile, Brent crude oil prices slipped more than 2%, falling to $47.68 per barrel, while West Texas Intermediate oil prices slipped nearly 4.2% on the day to hit $46.46.
Here's a breakdown of today's other top stories and stock performances:
- Swiss Surge: Following the surprise announcement by the Swiss National Bank, stocks based in Switzerland saw a nice boost as a stronger Swiss franc made dollar-denominated stocks less expensive. Shares of Credit Suisse Group AG (NYSE ADR: CS) rose 1.8% this afternoon, while shares of Novartis AG (NYSE ADR: NVS) rose 3.89%.
- Banking Blues: Shares of Citigroup Inc. (NYSE: C) slipped 3.7% after the company reported weaker-than-expected earnings. Shares of Bank of America Corp. (NYSE: BAC) slipped 5.24% on news the firm reported a 14% decline in quarterly profits.
- Stocks to Watch: The deal was never on. Shares of BlackBerry Ltd. (Nasdaq: BBRY) fell 19.77% after rumors were dispelled that the company was a potential acquisition target. Blackberry stock had surged nearly 30% in yesterday's trading session on news the company was in discussions with Samsung Electronics Co. (OTCMKTS: SSNLF) about a deal.
- Retailer Rout: Retail stocks continued to struggle a day after sales hit an 11-month low in December, undermining analyst expectations for a strong holiday season. This afternoon, shares of Best Buy Co Inc. (NYSE: BBY) fell more than 14.5% after the company warned same-store sales growth will be flat to negative in the first two quarters of its fiscal year starting February, citing low demand for computers and tablets. Meanwhile, shares of RadioShack (NYSE: RSH) crashed more than 35% today on news the company may file for bankruptcy within the next three months. The Wall Street Journal reported that hedge fund Salus Capital Partners has offered the retailer $500 million for bankruptcy financing.
- An Apple a Day: Shares of Apple Inc. shares (Nasdaq: AAPL) slipped 2.71% on news that investment advisory Mizuho Securities downgraded the stock. The firm said it expects strong first-quarter earnings for the tech giant in two weeks. But it also raised concerns about future iPhone sales later this year. Despite the analyst's projection, Money Morning Tech Specialist Michael A. Robinson believes Apple stock is one of the best buys today at current price levels.
- Retailer Reversal: Shares of Target Corp. (NYSE: TGT) were up more than 2% this afternoon after the firm announced plans to end its attempts to expand into Canada. The surprise reversal will likely cost 17,000 jobs and force the company to take a steep loss. Target plans to shutter all 133 stores in Canada.
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: U.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.