For Oct. 7, 2015, here is your stock market news and stocks to watch based on today's market moves...
How Did the Stock Market Do Today?
Dow Jones: 16,912.29; +122.10; +0.73%
S&P 500: 1,995.83; +15.91; +0.80%
Nasdaq: 4,791.15; +42.77; +0.90%
The Dow Jones Industrial Average today (Wednesday) added 122 points, despite broader market concerns about corporate earnings and the end in the crude oil price rally after the United States saw a larger than expected inventory report from last week. Today, the biggest elephant in the market was further exposed after Bank of America Corp. (NYSE: BAC) announced banks have roughly $100 billion in exposure to struggling energy giant Glencore Plc. (LON: GLEN). Money Morning Global Credit Strategist Michael Lewitt has explained this stock has a long way to fall and might be the energy market's "Lehman Brothers" moment.
The S&P 500 Volatility Index (VIX), the market's fear gauge, dipped 5.3% on the day.
Top Stock Market News Today
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- Stock Market News: All 10 S&P sectors were in the green today. Basic materials and energy stocks both climbed by more than 2.2%, despite a decline in crude prices. Today's biggest winner was resource giant Freeport-McMoRan Inc. (NYSE: FCX), which gained nearly 10% after announcing plans to get out of the oil trade. Meanwhile, Morgan Stanley (NYSE: MS) appeared to pick the bottom for commodity prices today when it announced it expects prices to increase by 19% by 2017. The firm also upgraded shares of Rio Tinto Plc. (NYSE ADR: RIO) and BHP Billiton Ltd. (NYSE ADR: BHP), which saw gains of 7.5% and 4.2%, respectively.
- Oil Prices Slip: Oil prices began the day slightly higher, but reversed course on news the U.S. Energy Information Administration reported U.S. inventories increased by 3.3 million barrels last week. That's well ahead of the 2.1 million barrels expected by consensus analysts and significantly higher than the 1.2 million barrel decline expected by the American Petroleum Institute. WTI oil prices dipped 1.1% to hit $47.96 per barrel, while Brent crude prices fell about 0.8% on the day.
- On Tap Tomorrow: On Thursday, three members of the U.S. Federal Reserve will give speeches while the Fed releases minutes from its September FOMC meeting. Though the markets were not shocked by news last month that the Fed elected to keep interest rates at record lows, traders will be looking for clues on when the Fed may consider its next increase in rates and attempt to better understand the committee's justification for its decision. Tomorrow, the earnings session "unofficially" kicks off with the earnings announcement of aluminum manufacturer and economic bellwether Alcoa Inc. (NYSE: AA). Additional companies reporting earnings tomorrow include Domino's Pizza Inc. (NYSE: DPZ), Ruby Tuesday Inc. (NYSE: RT), AngioDynamics Inc. (Nasdaq: ANGO), and International Speedway Corp. (Nasdaq: ISCA).
Stocks to Watch: YUM, MCD, TWTR, FCAU, NUS
- Stocks to Watch No. 1, YUM: Shares of Yum! Brands Inc. (NYSE: YUM) cratered more than 18% after the company reported weaker than expected quarterly earnings and slashed its full-year outlook. During a very testy call between analysts and company executives, Yum! Brands' management blamed external forces like the rising U.S. dollar, exposure to China's slowing economic growth, and internal forces like poor marketing execution for its brand. Analysts anticipate activist investors will likely push for significant changes during the company's December shareholder meeting. One notable push includes some desires to spin-off the company's highly successful Taco Bell business. The downturn in YUM stock also dragged down competitor McDonald's Corp. (NYSE: MCD) by nearly 1% due to its similar exposure to China.
- Stocks to Watch No. 2, TWTR: Shares of Twitter Inc. (NYSE: TWTR) were up more than 8% on news Saudi Arabian billionaire Prince Al-Waleed bin Talal and his investment firm have boosted its stake in the microblogging company. Kingdom Holding now owns a 5% stake in the tech firm, a decision that required at least a $50 million investment.
- Stocks to Watch No. 3, FCAU: Shares of Fiat Chrysler Automobiles NV (NYSE: FCAU) were up nearly 4% despite the United Auto Workers threatening to strike over a disagreement involving their new employment contract. The union said employees could stage a walk out as early as midnight tonight.
- Stocks to Watch No. 4, NUS: Shares of Nu Skin Enterprises Inc. (NYSE: NUS) cratered more than 25% on news the company issued a pre-announcement of its earnings, which is typically a bad sign for a stock. Investment analysts are quickly downgrading the stock and cutting price targets as concerns about the firm announced a range for third-quarter sales between $570 million and $572 million. That is well below guidance expectations of $628.6 million.
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
Follow us on Twitter: @moneymorning.
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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.