Start the conversation
How the Stock Market Did Today
S&P 500: 2,108.56; +15.31; +0.73%
Nasdaq: 5,111.73; +22.53; +0.44%
The Dow Jones Industrial Average today gained more than 130 points after the U.S. Federal Reserve said that labor conditions and the broader U.S. economy are improving and concerns about China's stock market temporarily abated. Today's statement sets the stage for a possible interest rate hike when the Federal Open Market Committee meets again in September. The central bank said that the economy is poised to overcome a first-quarter contraction, a decline in domestic energy process, and broader concerns in the global economy. Here's a breakdown of the Federal Reserve's decision, including an exploration of outside events that are impacting rate policy.
In disappointing news, the U.S. housing market hit a speedbump last month, with mortgage contracts to purchase existing homes falling in June after a strong run of five consecutive months of gains.
Top Stock Market News Today
- Stock Market News: The U.S. markets were on the rise Wednesday after the Federal Reserve decided to leave interest rates untouched, and oil prices rebounded slightly from multi-year lows. Shares of Citrix Systems Inc. (Nasdaq: CTXS) were today's best performer on the S&P 500. CTXS stock added more than 8% after the software firm announced it beat Wall Street profit and revenue expectations. After the bell, Facebook Inc. (Nasdaq: FB) and Whole Foods Market Inc. (Nasdaq: WFM) will both report earnings.
- Earnings Surge: Aerospace stocks surged after General Dynamics Corp. (NYSE: GD) hit a record high on news the firm beat earnings expectations. General Dynamics' 3.9% gain sparked a broader rally that lifted its rivals Northrop Grumman Corp. (NYSE: NOC), Lockheed Martin Corp. (NYSE: LMT), and Transdigm Group Inc. (NYSE: TDG) today.
- Oil Outlook: Domestic oil prices climbed for a second straight day. WTI crude futures for September added 1.6% to hit 48.75 per barrel. Meanwhile, Brent oil prices added 0.3% to hit $53.48 per barrel. Prices are rising despite concerns about the Chinese economy. This morning, the U.S. Energy Information Administration announced that more than 4.2 million barrels were withdrawn from domestic stockpiles last week. That is more than 20 times the expected levels forecasted by oil analysts. Shares of oilfield service companies rose today, led by a 3.1% gain for Halliburton Co. (NYSE: HAL).
- On Tap Tomorrow: On Thursday, traders will keep a keen eye on the first estimate of second-quarter GDP in the United States. Consensus expectations call for a 2.9% increase for the quarter, outpacing the negative 0.2% downturn in the first quarter. Increased economic growth would provide greater justification for the Federal Reserve to hike interest rates. The economic calendar also features a report on weekly jobless claims and farm prices. Companies reporting earnings include Anheuser-Busch Inbev SA (NYSE ADR: BUD), Colgate-Palmolive Co. (NYSE: CL), LinkedIn Corp. (Nasdaq: LNKD), Expedia Inc. (Nasdaq: EXPE), Electronic Arts Inc. (Nasdaq: EA), Amgen Inc. (Nasdaq: AMGN), and Marriott International Inc. (Nasdaq: MAR).
Stocks to Watch: CYT, SHAK, BWLD, YELP, TWTR
- Stocks to Watch No. 1, CYT: Shares of Cytec Industries Inc. (NYSE: CYT) were up more than 27% on news that the aerospace and automotive firm will be purchased for roughly $5.5 billion by Belgian chemical firm Solvay SA (OTCMKTS: SVYSF). Cytec investors may be disappointed by the deal, as reports indicate that Cytec could be worth more than $6.4 billion by the firm acquiring it.
- Stocks to Watch No. 2: SHAK: Shares of Shake Shack Inc. (NYSE: SHAK) surged more than 18% on its best day since its IPO earlier this year. The stock surpassed its critical lock-up date for insiders to sell shares, and the stock remains a favorite among a wide roster of large investors that include private equity firms like Leonard Green & Partners and Gilder Gagnon.
- Stocks to Watch No. 3, BWLD: Shares of Buffalo Wild Wings Inc. (Nasdaq: BWLD) jumped 11.2% despite missing quarterly earnings estimates again. The firm said in a conference call that same-store sales were on the rise and very strong customer loyalty is boosting its overall brand.
- Stocks to Watch No. 4, YELP: A rash of downgrades on the back of a poor earnings report sent shares of Yelp Inc. (NYSE: YELP) tumbling more than 25% today. The company also reduced its 2015 profit outlook as investors blamed a surge in competition. The firm received downgrades from a number of investment firms including Bank of America Corp. (NYSE: BAC), Morgan Stanley (NYSE: MS), Oppenheimer Holdings Inc. (USA) (NYSE: OPY) and SunTrust Banks Inc. (NYSE: STI).
- Stocks to Watch No. 5, TWTR: Shares of Twitter Inc. (NYSE: TWTR) hit a 52-week low, sinking 14.5% after the company reported a disappointing growth outlook. Twitter said that its monthly average users slipped to its lowest growth rate since it went public in 2013. The company also reported a smaller second-quarter loss compared to a year ago and would have beat Wall Street's Twitter earningsestimates for Q2 2015 had they excluded certain expenses. Here's more on why Twitter stock is getting crushed.
What Investors Must Know This Week
- The Top Three High-Return Investments to Buy Today
- Is Netflix Stock a Buy After Stock Split and Earnings Beat?
- The Real Impact of the Iran Nuclear Deal on U.S. Oil Prices
Stay informed on what's going on in the markets by following us on Twitter @moneymorning.
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.