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The Dow Jones Industrial Average today shed 117 points. The reason? A slump in oil and commodity prices and a stronger dollar weighed down energy and material stocks.
Dow: 17,959.03, -117.16, –0.65%
S&P 500: 2,089.27, -10.23, -0.49%
Nasdaq: 4,992.38, +9.55, +0.19%
What Moved the Dow Jones Industrial Average Today: The markets pulled back after yesterday's announcement by the Federal Open Market Committee that the central bank will not increase interest rates until the nation sees an improvement in its jobs picture and inflation begins to rise.
Oil prices fell again today. The S&P Energy Index slid more than 1.3%. WTI crude, marked in New York City, slid roughly 2% to settle below $44 per barrel. Brent crude, priced in London, cratered another 2.6% to $54.43 per barrel. The declines came on news that Kuwaiti oil ministers said OPEC would be forced to continue production despite crashing prices around the globe. The news comes a day after the Energy Information Administration announced U.S. crude inventories rose for the 10th consecutive week.
Now, check out the other top market stories – plus get our new profit tip for investors:
- Bank Breakup: Shares of Bank of America Corp. (NYSE: BAC) were down more than 2% this afternoon on news that the Securities and Exchange Commission will permit bank shareholders to vote on whether to break up the massive financial institution. By allowing the shareholder proposal to be included on Bank of America's proxy statement, shareholders would have the right to vote on whether to split the bank up at the firm's annual meeting later this year.
- Electric Slide: Shares of Tesla stock slid nearly 3% this afternoon after CEO Elon Musk's "can't-miss" announcement about how Tesla Motors Inc. (Nasdaq: TSLA) would reduce "range anxiety" turned out to be a bit of an overstatement. For a full breakdown of Elon Musk's "big reveal" and to learn whether TSLA stock is worthy of a "Buy" right now, go here.
- Surprise Retail Surge: Shares of Guess? Inc. (NYSE: GES) surged 16% this afternoon after the company reported better than expected earnings. The company still lost money during the quarter, but the results were better than the steep decline Wall Street anticipated. The GES gain was surprising and is likely unsustainable. The firm said both profits and sales fell from the same period in 2014 and that revenue declined in all regions, with the steepest declines in Europe and North America.
- Apple a Day: Shares of Apple Inc. (Nasdaq: AAPL) slid 0.76% on news that Intel Corp. (Nasdaq: INTC), Google Inc. (Nasdaq: GOOG, GOOGL), and TAG Heuer International are planning on taking on the Apple Watch. The firms are working together on a Swiss smart watch that will integrate Intel and Android technology. Apple stock also joined the Dow Jones Industrial Average today – our Tech Expert Michael A. Robinson discussed on CNBC's "Street Signs" what that means for the AAPL share price…
- Biotech Boom: Shares of Juno Therapeutics Inc. (Nasdaq: JUNO) surged more than 17% this afternoon. The company's fourth-quarter earnings report failed to dampen investor enthusiasm for the promising immune therapy drugs and anti-cancer therapies in the firm's pipeline.
- Chinese Blues: Shares of Yahoo Inc. (Nasdaq: YHOO) were up 0.7% on news the tech giant plans to shutter its remaining operations in China. The company said it will lay off between 200 and 300 employees and close down its research center in Beijing. [Editor's Note: A number of indicators – weak factory production, slowing car sales, and more – have international investors questioning whether the so-called "Chinese Economic Miracle" is losing steam. The result has been a number of strong Chinese stocks are oversold right now – but they won't stay that way. Instead of betting against the Chinese stock market, pick up these three stocks that will shake off the bears…]
Money Morning Tip of the Day: The only thing standing between your portfolio and catastrophic loss is your own caution and proper risk management.
Today's tip comes from Money Morning Chief Investment Strategist Keith Fitz-Gerald:
Risk management may not be the most exciting part of investing. But it is the most important.
And a tool called "position sizing" stands out above all others as the most powerful, and not just for cutting risk either, but for boosting your profits, too.
The concept is simple. Controlling the amount of money you place in each trade can lead to bigger profits and mitigate the risk of a catastrophic loss.
Position sizing is the science of cutting risk in your portfolio down to the bone. It answers the question "How big should I make my position for any one trade?"
Many investors think they have this covered with trailing stops that take them out of an investment when some predetermined limit is hit.
Position sizing is different. It's about determining how much of something you can buy for maximum profits, or even if you can afford to buy in the first place.
Understanding position sizing will put you miles ahead of other investors who spend all their time wondering what to buy while ignoring the critical question of how much to buy.
To learn three different methods for sizing your positions, with step-by-step instructions for each, go here: This One Risk Management Tool Made the Difference Between Bankruptcy and $13 Million
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.