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The Dow Jones today yo-yoed up and down, falling triple digits before rallying late in the afternoon to end just above even for the day. Concerns about global growth and falling energy prices offset hopes of pending stimulus action by the European Central Bank and gains in the technology sector.
Shares of Johnson & Johnson (NYSE: JNJ) were the largest drag on both the Dow and S&P 500, slipping 2.6% after the company reported weaker than expected earnings.
Dow: 17,515.23, +3.66, +0.02%
S&P 500: 2,022.55, +3.13, +0.15%
Nasdaq: 4,654.85, +20.46, +0.44%
What Moved the Markets Today: Investors soured on the markets after the International Monetary Fund slashed its growth forecasts over the next two years, calling for global growth at 3.5% in 2015 and 3.7% in 2016. West Texas Intermediate oil prices slipped more than 4.7% today, while Brent crude oil prices were down more than 1.3%.
However, the markets seemed upbeat about potential for stimulus action by the European Central Bank (ECB). The ECB is likely to announce a massive bond-purchasing program Thursday to inject life into the world's largest economic bloc.
Now check out the day's most important market notes:
- Oil Fallout: Crude oil prices continued to slide this afternoon, taking their toll on some of the world's most important energy infrastructure companies. Today, oilfield-service giants Halliburton Co. (NYSE: HAL) and Baker Hughes Inc. (NYSE: BHI) both warned that declining crude drilling and production will negatively affect 2015 earnings. Baker Hughes also announced plans to lay off 7,000 employees. Shares of HAL were up 1.79% on the day, while BHI gained 1.24%.
- Merger Mania: Activist hedge fund Starboard Value LP is calling for yet another big merger from two of its largest holdings. The activist investor called for a marriage between office-supply chains Staples Inc. (Nasdaq: SPLS) and Office Depot Inc. (Nasdaq: ODP) in a letter released today. The firm has a stake in both companies and believes a merger could produce a massive boost in operating revenue if the companies enacted a cost-cutting measure together. Starboard was in the news last month when it publically called for Yahoo! Inc. (Nasdaq: YHOO) CEO Marissa Mayer to consider a merger with online media giant AOL Inc. (NYSE: AOL).
- Swiss Currency Fallout: Shares of FXCM Inc. (NYSE: FXCM), the Forex brokerage firm that nearly collapsed Friday after a reversal of Swiss economic policy, fell 87% after revealing its bailout loan terms from an agreement with Leucadia National Corp. (NYSE: LUK). According to the $300-million loan agreement, Leucadia, which owns investment bank Jefferies Group LLC, has the right to force the sale of the brokerage and keep the bulk of the profits. According to Citigroup Inc. (NYSE: C) analysts, the deal wiped out any value of FXCM's stock.
- State of the Union Address: On Tuesday night, U.S. President Barack Obama will deliver his sixth State of the Union address. The President is expected to seek tax raises on the highest-earning Americans, revenue for universal community college programs, new regulations on energy and the environment, and a slew of aggressive, progressive agenda measures. This is President Obama's sixth SOTU, and his first in which Republicans control both chambers of Congress. (Serious issues aside, here are the five most entertaining things we hope to see from the crowd at the 2015 State of the Union…)
- Financial Fallout: Shares of Morgan Stanley(NYSE: MS) rebounded after a 3% decline this morning to finish down roughly 0.4%. The investment bank reported weaker-than-expected earnings today and missed quarterly revenue by a steep margin. The firm said it was affected by declining trading volumes. Morgan Stanley's fourth-quarter profits were $0.47 per share, missing quarterly estimates by a penny.
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 gasoline prices are at their lowest in years, 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.