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How Did the Stock Market Do Today?
Dow Jones: 16,314.67; +113.35; +0.70%
S&P 500: 1,931.34; -0.90; -0.05%
Nasdaq: 4,686.50; -47.98; -1.01%
The Dow Jones Industrial Average today gained 113points on optimism from the U.S. Federal Reserve and an improved second-quarter GDP reading. Meanwhile, the S&P 500 and the Nasdaq fell after a massive sell-off in biotech stocks pushed the sector into bear territory. The biotech sector finished the week down more than 13%.
Last night, Fed Chairwoman Janet Yellen said there will likely be a fed fund rate increase "later this year, followed by a gradual pace of tightening thereafter." After the third and final revision by the U.S. Commerce Department, second-quarter GDP was up 3.9%, well ahead of consensus expectations of 3.7%.
Top Stock Market News Today
- Stock Market News: Seven of 10 S&P 500 sectors were in the green this afternoon, but only one was in focus for investors. The healthcare sector cratered by 2.3% on the day thanks to a sell-off in biotech stocks. Today's biggest winner was the financial sector, as investors took confidence from Janet Yellen's remarks on Thursday night. Bank of America Corp. (NYSE: BAC), JPMorgan Chase & Co. (NYSE: JPM) and Citigroup Inc. (NYSE: C) all gained more than 2% on the day.
- Biotech Slumps: The biotech index is now officially in bear territory. The iShares NASDAQ Biotechnology Index (ETF) (Nasdaq: IBB) cratered another 5.8% today. Shares of prominent biotech stocks plunged today, led by a 5.6% decline in Celgene Corp. (Nasdaq: CELG). Other notable decliners included Valeant Pharmaceuticals Intl. Inc. (NYSE: VRX), down 5%; Epizyme Inc. (Nasdaq: EPZM), down 9.4%; and Acceleron Pharma Inc. (Nasdaq: XLRN), down 7.3%.
- Boehner Resigns: Speaker of the House of Representatives John Boehner announced his resignation from Congress this afternoon. Boehner will leave Congress on Oct. 30, a decision that creates more uncertainty in the face of a possible government shutdown over funding to Planned Parenthood. In the event of a shutdown, Money Morning Chief Investment Strategist Keith Fitz-Gerald outlines the one sector that could offer incredible bargains very soon. Here's why Fitz-
Gerald says to stop worrying and profit from the government shutdown.
- Oil Prices Climb: Oil prices gained again from the broader Dow rally and news that the domestic rig count declined again. According to the count conducted by Baker Hughes Inc. (NYSE: BHI), rigs declined for the fourth straight week. The figure suggests a decline in future production in the United States. WTI prices added 1.5% to hit $45.61, while Brent oil prices added 0.7% to hit $48.53. Shares of Exxon Mobil Corp. (NYSE: XOM) rose .71% today, while rival Chevron Corp. (NYSE: CVX) added 0.7% on the day.
- On Tap Next Week: On Monday, three members of the Federal Reserve will speak on monetary policy, while the economic data calendar is headlined by existing home sales, the Dallas Fed Manufacturing Index, and Core Personal Income and Outlays. Companies reporting earnings on Monday include Vail Resorts Inc. (NYSE: MTN), Cal-Maine Foods Inc. (Nasdaq: CALM), Akorn Inc. (Nasdaq: AKRX), and SYNNEX Corp. (NYSE: SNX).
Stocks to Watch: NKE, CAT, INTC, TSLA, FINL
- Stocks to Watch No. 1, NKE: Shares of Nike Inc. (NYSE: NKE) surged nearly 9% today after the company shattered quarterly earnings expectations. Wall Street investment firms also boosted the target price for Nike stock. The company reported earnings per share (EPS) of $1.34 on revenue of $8.4 billion. Wall Street analysts had expected earnings of $1.19 per share on revenue of $8.22 billion. Notably, Nike sales in China climbed 30% compared to 2014. Deutsche Bank AG (USA) (NYSE: DB) anticipates that Nike will surge to $140 per share, while Sterne Agee foresees an increase to $150 per share.
- Stocks to Watch 2, CAT: Shares of global industrial giant Caterpillar Inc. (NYSE: CAT) fell to a new five-year low again on Friday, slipping 1.2% on the day. Investors are selling after the company announced plans to cut at least 5,000 positions by the end of 2016 and up to 10,000 employees over the next few years. It also slashed its 2015 revenue forecast in the face of declining demand from its largest customers in mining and oil production.
- Stocks to Watch No. 3, INTC: Shares of Intel Corp. (Nasdaq: INTC) gained 1.1% after the tech giant received an upgrade from investment firm JMP Securities. The chipmaker received an upgrade to "market perform" after the firm cited an improved annual outlook and expectations for greater demand for virtual reality systems.
- Stocks to Watch No. 4, TSLA: Shares of Tesla Motors Inc. (Nasdaq: TSLA) were down more than 2% on Friday as part of a broader sell-off in the tech sector. The news comes as the electric car manufacturer plans to announce third-quarter vehicle sales next week and unveil its electric SUV, the Model X. In the wake of the ongoing Volkswagen emissions scandal, Tesla is one company poised to benefit from the opportunity to capture new market share. Here's a breakdown of Tesla stock's long-term potential.
- Stocks to Watch No. 5, FINL: Shares of Finish Line Inc. (Nasdaq: FINL) cratered more than 20% after the company reported mixed earnings for the fiscal second quarter. The athletic apparel and footwear retailer firm reported earnings per share of $0.57, in line with Estimize consensus expectations. However, the company fell short of revenue expectations. The firm said that increased overhead expenses and a stronger dollar are weighing on sales.
What Investors Must Know This Week
- The One Stock to Profit from China's Trillion-Dollar Megaproject
- CHARTS: Gold Price Forecast Sees Rise Before 2016
- How to Protect Against the Biggest Threat to Your Money Today
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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.