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For Aug. 12, here's how the stock market did today, earnings reports, the top stock market news, and stocks to watch based on today's market moves...
How Did the Stock Market Do Today?
Dow Jones: 17,402.51; -0.33; -0.00%
S&P 500: 2,086.05; +1.98; +0.10%
Nasdaq: 5,044.39; +7.60; +0.15%
The Dow Jones Industrial Average today reversed course from an early triple-digit slump and finished only slightly down on Wednesday despite concerns about the Chinese currency devaluation. Companies with broad exposure to the Chinese economy were hit the hardest on the day.
Notable decliners include McDonald's Corp. (NYSE: MCD), down 0.5%; Yum! Brands Inc. (NYSE: YUM), down more than 3.4%; and Fiat Chrysler Automobiles NV (NYSE: FCAU), which declined more than 5.9%. Casinos were also hit hard as the downturn in Macau gambling puts increased pressure on the sector. Shares of both Las Vegas Sands Corp. (NYSE: LVS) and Wynn Resorts Ltd. (Nasdaq: WYNN) slipped more than 1.6%,
The world's second-largest economy continues to struggle and is looking for ways to kick-start growth. Following several rounds of rate hikes, the devaluation will likely offer a boost to its exports markets, but it raises new concerns about a possible currency war between China and the West. It was the largest devaluation in the Chinese yuan's history at almost 1.9% against the U.S. dollar.
The People's Bank of China (PBOC) believes this will reform the yuan's regulation and more closely align the currency with market forces. The PBOC also followed some of the International Monetary Fund's (IMF) suggestions when it came to changing the currency's regulation. Here's why that is so important...
The S&P 500 Volatility Index (VIX), the market's fear gauge, gained 0.1% on the day.
Top Stock Market News Today
- Stock Market News: The Dow Jones lost 0.33 points, erasing most early losses and concerns about a broader global economic slowdown. Higher energy commodity prices and a rise in shares of Apple Inc. (Nasdaq: AAPL) fueled the reversal. Apple stock added 1.5%, lifting the Nasdaq and the S&P 500 higher.
- Oil Moves: Oil prices reversed course from a six-month low as global demand increased and stockpile levels declined. WTI crude futures for September gained 0.5% to hit $43.31 per barrel. Meanwhile, Brent oil prices added 1.2% to $49.73 per barrel.
- On Tap Thursday: Tomorrow, investors will focus on weekly jobless claims, the monthly retail sales report, and an update to the U.S. Federal Reserve's balance sheet. Companies reporting earnings tomorrow include Nordstrom Inc. (NYSE: JWN), Applied Materials Inc. (Nasdaq: AMAT), Aspen Technology Inc. (Nasdaq: AZPN), Advanced Auto Parts Inc. (NYSE: AAP), Kohl's Corp. (NYSE: KSS), and King Digital Entertainment Plc. (NYSE: KING).
Stocks to Watch: BABA, YHOO, M, BRK.A, BRK.B, KHC
- Stocks to Watch No. 1, BABA: Shares of Alibaba Group Holding Ltd. (NYSE: BABA) fell more than 5% after the company reported its slowest growth rate in five years and weaker than expected earnings on Wednesday morning. According to Wall Street estimates, the company should report per-share earnings of $0.58 on revenue of $3.39 billion. BABA stock hit an all-time intraday low as broader concerns about the Chinese economy are pummeling shares. Here's everything you need to know about the e-commerce giant's earnings.
- Stocks to Watch No. 2, YHOO: Alibaba's sharp downturn pulled down shares of Yahoo! Inc. (Nasdaq: YHOO) another 4.3% on the day. The search giant owns a large stake in the Chinese e-commerce giant and shared similar losses after Alibaba reported weak quarterly results.
- Stocks to Watch No. 3, M: Shares of Macy's Inc. (NYSE: M) dropped more than 5% after the company reported weak quarterly profits and raised new concerns about the strength of the U.S. retail sector. The company announced a 26% decline in second-quarter profits and said weak consumer spending and delays at its West Coast shipping facilities weighed on its bottom line. The retail giant also announced it will start a joint venture in China that will begin selling goods through Alibaba's Tmall Global marketplace.
- Stocks to Watch No. 4, BRK.A, BRK.B: In one of the more underreported events of the day, Standard & Poor's Ratings Services announced it has put its ratings of Berkshire Hathaway Inc. (NYSE: BRK.A, BRK.B) under review. The ratings agency announced this shortly after the company run by Warren Buffett announced plans to purchase Precision Castparts Corp. (NYSE: PCP) for roughly $32 billion. The agency has questions about how Buffett's company plans to finance this deal. Shares of both classes of Berkshire Hathaway stock were down nearly 1% on the day.
- Stocks to Watch No. 5, KHC: The cost-cutting efforts of Warren Buffett and private equity firm 3G Capital are already underway at the newly formed food giant Kraft Heinz Co. (Nasdaq: KHC). This morning, the firm announced plans to slash 2,500 jobs, including 700 at its Illinois-based headquarters. The company said these cuts will help save the firm roughly $1.5 billion by the end of 2017. This is a regular approach by Buffett and his private equity partner. Back in 2013, the two firms purchased Heinz Co. and immediately slashed 7,000 jobs and closed multiple factories. Shares of KHC were down more than 1.6% on the day.
What Investors Must Know This Week
- Why We're Still Bullish on Apple Stock (Nasdaq: AAPL)
- The Best Way to Add Gold to Your Portfolio Today
- The 4 Real Reasons Oil Prices Are Slipping - and How to Profit
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About the Author
Garrett Baldwin is a globally recognized research economist, financial writer, consultant, and political risk analyst with decades of trading experience and degrees in economics, cybersecurity, and business from Johns Hopkins, Purdue, Indiana University, and Northwestern.
