The Dow Jones Industrial Average today soared 390 points as investors rallied around expectations that China's central bank is poised to loosen monetary policy in order to expedite growth in the nation's economy.
Today, China's stock market gained nearly 3% as investors anticipated the People's Bank of China will take further action to stimulate its economy after the government released a weak trade report this morning. The Shanghai Composite Index ended Tuesday's session 2.9% higher at 3,170.45. The smaller Shenzhen Index gained 3.8%. Hong Kong's Hang Seng benchmark added 3.6%.
The S&P 500 Volatility Index (VIX), the market's fear gauge, fell 11.5% on the day.
Top Stock Market News Today
Stock Market News: Markets rallied around optimism in the Chinese markets and another round of merger and acquisition activity in the media sector. Today, shares of Meredith Corp. (NYSE: MDP) gained nearly 10% after the company agreed to be purchase by rival Media General Inc. (NYSE: MEG) for a little more than $2.34 billion. The deal will create the third-largest media owner of local television stations in the country.
Oil Moves: WTI crude oil prices today fell deeper into negative territory following a weak trade report in China and a market holiday in the United States. WTI prices were fell roughly 0.4% to reach $45.87. Meanwhile, Brent oil prices added 3.8% to $49.45 per barrel as the dollar remained mixed on the global forex markets and traders expected some level of additional stimulus from China's central bank.
On Tap Wednesday: Tomorrow, investors will keep an eye on MBA mortgage applications and the quarterly services survey. However, the bigger news could be coming from outside U.S. borders, as central banks in Canada, the UK, and New Zealand are all poised to make announcements about monetary policy. Companies reporting earnings include Palo Alto Networks Inc. (NYSE: PANW), Barnes & Noble Inc. (NYSE: BKS), KrispyKreme Doughnuts Inc. (NYSE: KKD), Box Inc. (NYSE: BOX), Conn's Inc. (Nasdaq: CONN), and Hovnanian Enterprises Inc. (NYSE: HOV).
Stocks to Watch: AAPL, FIT, JD, BABA, AA, BAC
Stocks to Watch No. 1, AAPL: Shares of Apple Inc. (Nasdaq: AAPL) added 2.8% today as the company prepares for a major media event tomorrow in San Francisco. Many are speculating the company will unveil a new product or service, which could include the next series of its iPhone or the new functionality of its Apple TV, which is expected to include Siri in its operating system. Here is an investor's guide to tomorrow's media event, and a few surprises that might be in store.
Stocks to Watch No. 2, FIT: Shares of Fitbit Inc. (NYSE: FIT) were up 8% after the company received an upgrade from investment firm Morgan Stanley (NYSE: MS). The firm announced the wearable tech company controls roughly 21% of its industry market share and set a target price of $58. This represents potential upside of 62% from today's intraday high. For more on Fitbit stock, go here.
Stocks to Watch No. 3, JD: Shares of JD.com Inc. (Nasdaq ADR: JD) added 5% today after the Chinese online retailer announced plans to create a $1 billion stock buyback program over the next two years. This represents roughly 3% of the company's total market value and is viewed as a way to instill greater confidence in China's e-commerce market at a time when the nation's growth rate appears to be slowing. Shares of rival Alibaba Group Holding Ltd. (NYSE: BABA) fell by 4.7% on the day and is hovering near its 52-week low of $58 after the company slashed second-quarter expectations for its merchandise volumes.
Stocks to Watch No. 4, AA: Shares of Alcoa Inc. (NYSE: AA) gained more than 2.3% today after the company received a much-needed upgrade from investment and commercial banking giant Bank of America Corp. (NYSE: BAC) from "Hold" to "Buy." Bank of America analysts projected that the global aluminum market is set to stabilize in the wake of China's recent market downturn; however, the bank did cut its price target for Alcoa stock from $13 to $12.
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.
