The DJIA retreated from record levels Monday. The cause? Crude oil prices slipped again on concerns of oversupply.
In addition, Greece's government delayed until tomorrow its presentation of proposed economic reforms to its Eurozone partners.
Today our Keith Fitz-Gerald appeared on FOX Business' "Varney & Co" to discuss how the "big bank bailout mentality" that rules Washington has short-changed everyday Americans, creating a government that works at the expense of rather than for the American people...
Dow Jones: 18,116.84, -23.60, -0.13%
S&P 500: 2,109.66, -0.64, -0.03%
Nasdaq: 4,960.97, +5.01, +0.10%
What Moved the Markets Today: WTI slipped 3% to hit $49.25 per barrel, while Brent slipped 2.3% to hit $58.79 per barrel. The S&P energy sector declined nearly 1% on the day. Falling energy prices dragged down shares of Chevron Corp. (NYSE: CVX), Royal Dutch Shell Plc. (NYSE ADR: RDS.A), and Exxon Mobil Corp. (NYSE: XOM) roughly 1%. Shares of oil field services giant Transocean Ltd. (NYSE: RIG) slipped nearly 5%, with prices dipping toward an almost two-decade low. RIG was the largest decliner on the S&P 500 today.
Residential real estate took a hit today on news that purchases of existing homes fell 4.9% in January, according to the National Association of Realtors. The announcement drops the annualized rate to 4.82 million units, the nation's lowest level since April 2014.
Tomorrow U.S. Federal Reserve Chairwoman Janet Yellen testifies before Congress on monetary policy.
Now, check out the other top market stories - plus get our new profit tip for investors:
- OPEC Meeting: The oil minister of Nigeria said today that oil cartel OPEC may hold an emergency meeting to discuss low oil prices. OPEC is scheduled to hold its next meeting in June. During its November 2014 meeting, the cartel voted to maintain production levels of 30 million barrels per day. Saudi Arabia's refusal to slash production has helped propel the decline in prices, threatening the social budgets of other member nations.
- Merger Mania: Shares of Valeant Pharmaceuticals International Inc. (NYSE: VRX) jumped more than 14% on news it will acquire gastrointestinal drug manufacturer Salix Pharmaceuticals Ltd. (Nasdaq: SLXP). The all-cash deal announced Sunday is expected to be worth up to $14.5 billion and will pay $158 per share in cash. The deal is expected to save both companies more than $500 million within the first six months. This is Valeant's first big deal since it failed to acquire Botox maker Allergan Inc. (NYSE: AGN) last year. Learn how tax inversion deals work here...
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- Downgraded: Shares of Boeing Co. (NYSE: BA) slipped 2.26% on news that Goldman Sachs Group Inc. (NYSE: GS) cut its rating on the aircraft maker to "sell" from "neutral." The investment bank raised concerns about the company's future demand growth. Goldman slashed its price target on BA stock from $147 to $132.
- Tax Time: Shares of HSBC Holdings Plc. (NYSE: HSBC) fell more than 4.6% this morning on weaker profits and news the company is looking to settle allegations that it manipulated forex markets. The company has set aside an additional $550 million to cover potential fines. Growing legal costs affected the company's 2014 earnings. The firm reported earnings of $0.69 per share, down 18% from the year prior. Net profits also declined 17% year over year to $14.7 billion.
- An Apple a Day: Shares of Apple Inc. (Nasdaq: AAPL) hit another all-time intraday high this afternoon. Apple stock is now trading at $133, and its market cap is nearing $800 billion. Today the company announced plans to invest 1.7 billion euros ($1.92 billion) to build two data centers in Europe that will operate completely on renewable energy. Investors have made some lofty predictions for Apple stock in the future, but as we explained recently, these predictions might actually be too low.
Money Morning Tip of the Day: You can make any investment virtually risk-free under the right circumstances by using a strategy called the "free trade."
Today's tip comes from Money Morning Chief Investment Strategist Keith Fitz-Gerald:
Markets are at new record highs. Many investors are sitting on solid profits and, in doing so, taking on a lot more risk than they should.
So now is a perfect time to discuss one of my favorite tactics: the free trade.
This strategy lets you do three things at once:
- Capture profits of at least 100%
- Pay for your initial investment
- Reduce the risk on your remaining position to almost nothing
It's simple. Here's how it works:
Once an investment delivers at least 100% returns, sell half your position to capture profits. Then redeploy those profits into other investments, and let the remaining shares of the first investment run.
So you get back your original investment, and you maintain all the upside you can handle, essentially "for free." Even better, since you've now "paid" for your investment, you can stay in the game with not another dollar at risk, even if the stock you've just harvested has a reversal in fortune and goes from hero to zero.
A free trade works in all market conditions, on any investment, and can be set up well in advance. No other technique I know of comes close in terms of simplicity or effectiveness.
Keith Fitz-Gerald is a seasoned market analyst and professional trader with more than 30 years of experience. Forbes.com recently hailed him as a "market visionary." For more investing tips and stock picks from Fitz-Gerald, go here...