The Dow Jones Industrial Average today (Tuesday) cratered 469 points as investors weighed new concerns over manufacturing growth in the world's second-largest economy. This morning, the New York Stock Exchange implemented a little-used provision called Rule 48 in order to preempt panic selling and ensure orderly trading in times of extreme volatility. This is the second time the NYSE has implemented the rule in the last seven trading sessions.
Two reports indicated that China's manufacturing sector is ensnared in its worst downturn in several years. The nation's August Purchasing Managers' Index (PMI) dipped to 49.7, down from a reading of 50 in July. Meanwhile, U.S. manufacturing activity was on the decline as well. The August ISM manufacturing index slipped to 51.1 from 52.7 in July. This is the weakest ISM report in more than two years.
Financial stocks were sliding this afternoon as weak economic data lowers the probability of an interest rate hike by the Federal Reserve. Shares of JPMorgan Chase & Co. (NYSE: JPM), Wells Fargo& Co. (NYSE: WFC), and Citigroup Inc. (NYSE: C) all slipped more than 4% on the day.
The S&P 500 Volatility Index (VIX), the market's fear gauge, surged 9.8% on the day.
Top Stock Market News Today
Stock Market News:Energy stocks took a beating as investors took profits off the table from yesterday's rally and raised new concerns about demand levels in China. This afternoon, the S&P energy index (SPNY) fell more than 3.5%. Today, shares of Chevron Corp. (NYSE: CVX) and Exxon Mobil Corp. (NYSE: XOM) were down 3.4% and 4.2% on the day, respectively.
Oil Moves: Domestic WTI oil prices cratered on broad concerns about the Chinese economy and oversupply in the global markets. Investors took profits off the table after a major surge in prices during Monday's trading session. WTI prices were down more than 8.5% to reach $45.03. Brent oil prices slipped 9.1% to $49.21 per barrel.
On Tap Wednesday: Tomorrow, investors will keep an eye on the August ADP employment report, a weekly update on energy crude supplies from the Energy Information Administration, and an update on mortgage applications. Companies reporting earnings include Vera Bradley Inc. (Nasdaq: VRA), Five Below Inc. (Nasdaq: FIVE), G-III Apparel Group Ltd. (Nasdaq: GIII), Oxford Industries Inc. (NYSE: OXM), and ABM Industries Inc. (NYSE: ABM).
Stocks to Watch: DLTR, AAPL, NFLX, RIG, PWE, WPX
Stocks to Watch No. 1, DLTR: Shares of Dollar Tree Inc. (Nasdaq: DLTR) slipped more than 8.6% after the discount retailer saw its quarterly earnings report fall below Wall Street expectations. The company reported adjusted per-share earnings of $0.67, which beat analyst expectations. However, the firm said revenue and same store sales were off by 2.7%.
Stocks to Watch No. 2, AAPL: Shares of Apple Inc. (Nasdaq: AAPL) were down 4.4% as investors raise concerns about the tech giant's exposure to China. Apple plans to shift into original programming, which will raise competitive pressures on the streaming giant Netflix Inc. (Nasdaq: NFLX), which saw shares fall more than 8% today.
Stocks to Watch No. 3, RIG: Shares of Transocean Ltd. (NYSE: RIG) were off 3.6% as low oil prices rattle the oilfield service industry. Optimism is falling after the company's board of directors announced they will vote in October to cancel its dividend payment scheduled for December and March. Though the company approved the dividends in March, the decision is part of a broader strategy to reduce the company's costs. The company wasn't the only one to break news to investors that it was suspending its dividend. This afternoon, shares of Penn West Petroleum Ltd. (NYSE: PWE) fell more than 16% on news the company will cancel its dividend in order to save roughly $15.8 million a year.
Stocks to Watch No. 4, WPX: Shares of WPX Energy Inc. (NYSE: WPX) were off nearly 4%, a day after the company announced plans to sell its North Dakota oil-and-gas gathering system to private-equity firm Ares Management for nearly $185 million. WPX Energy plans to divest up to $1 billion in assets through 2017.
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.
