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For Dec. 16, 2015, here's the top stock market news and stocks to watch based on today's market moves…
How Did the Stock Market Do Today?
Dow Jones: 17,749.09; +224.18; +1.28%
S&P 500: 2,073.07; +29.66; +1.45%
Nasdaq: 5,071.13; +75.78; +1.52%
The Dow Jones Industrial Average today (Wednesday) gained 224 points after the U.S. Federal Reserve hiked its benchmark interest rate by 25 basis points. It's the first time the U.S. central bank has increased rates since 2006 and marks an end to its zero-interest-rate policy (ZIRP), at least temporarily. Federal Reserve Chairwoman Janet Yellen said the U.S. economy has "held up and grown at a solid pace" in 2015 and said continued growth or higher inflation could warrant further rate increases. Money Morning Capital Wave Strategist Shah Gilani says the rate hike is already "baked in" to the equities market. What really matters is what happens after today's announcement, which we preview here.
Meanwhile, the housing sector received a positive shot in the arm on news that new construction starts increased by 10.5% in November. Housing starts are now at a seasonally adjusted annual rate of 1.173 million, according to data from the U.S. Commerce Department. Housing stocks surged on the positive news. Shares of Toll Brothers Inc. (NYSE: TOL) gained 3% on the day, while D.R. Horton Inc. (NYSE: DHI) gained more than 2.5%.
Top Stock Market News Today
- Stock Market News: All 10 S&P sectors were positive today after the announcement that the Fed will hike interest rates. Utilities stocks were the strongest gainers. Shares of NextEra Energy Inc. (NYSE: NEE) were up 5% on the day, while shares of Duke Energy Corp. (NYSE: DUK) were up 1.7%. The financial sector received a boost after several banks announced plans to hike their prime rate to 3.5%. Shares of major U.S. banks Bank of America Corp. (NYSE: BAC), Citigroup Inc. (NYSE: C), JPMorgan Chase & Co. (NYSE: JPM), and Wells Fargo & Co. (NYSE: WFC) all gained more than 1.7% on the day. Shares of Goldman Sachs Group Inc. (NYSE: GS), which traded at heavy volumes today and gained 2.3%, was the largest contributor to the Dow Jones Industrial Average's rise over today's session.
- Oil in Focus: Oil prices fell to near 11-year lows on news U.S. crude inventories remain at high levels. In addition, a higher interest rate will fuel a stronger U.S. dollar, which affects the price of crude. January WTI crude oil prices slipped 4.9% to settle at $35.52 per barrel. Brent crude prices fell 3.3% to close at $37.19. Oil prices will continue to be in focus on news that the United States may be on the cusp of ending a four-decade ban on exports of crude oil. Ending this ban is part of a $1.15 trillion spending bill that has been negotiated over the last two weeks. Although President Barrack Obama has threatened to veto any bill lifting the export ban, Democrats have received guarantees that the U.S. government will do more to spur economic development and spending on alternative energy sources like wind and solar. Here's how lifting the export ban would affect oil prices.
- On Tap Tomorrow: On Thursday, another busy day of economic data and earnings reports will be overshadowed by yesterday's decision by the U.S. central bank. The economic calendar includes weekly jobless claims, the EIA natural gas report, and the Philadelphia Fed Business Outlook Survey. Companies set to report quarterly earnings tomorrow include Red Hat Inc. (NYSE: RHT), General Mills Inc. (NYSE: GIS), Accenture Plc. (NYSE: ACN), Winnebago Industries Inc. (NYSE: WGO), and Marcus Corp. (NYSE: MCS).
Stocks to Watch: GPN, HPY, CMG, HON, FSLR, CSIQ
- Stocks to Watch No. 1, GPN: Merger mania continued today on news Global Payments Inc. (NYSE: GPN) will combine with rival Heartland Payment Systems Inc. (NYSE: HPY). According to terms of the deal, Global Payments will purchase Heartland Payment Systems for roughly $4.3 billion in a cash and stock deal. Global Payments stock fell 8% on the news, while Heartland stock jumped 11.5%.
- Stocks to Watch No. 2, CMG: Shares of Chipotle Mexican Grill Inc. (NYSE: CMG) were up 2.5% after the fast-casual restaurant announced plans to halt use of local farms in order to stave off concerns about any future outbreaks of E. coli.
- Stocks to Watch No. 3, HON: Shares of Honeywell International Inc. (NYSE: HON) jumped 5.7% after the company issued positive guidance for 2016. The manufacturing company expects profits to increase by as much as 9.8% next year as the firm continues to focus on cost cutting.
- Stocks to Watch No. 4, FSLR: Shares of alternative energy stocks Canadian Solar Inc. (Nasdaq: CSIQ) and First Solar Inc. (Nasdaq: FSLR) were both up more than 7% on news House Speaker Paul Ryan said Congress plans to authorize the investment tax credit (ITC) with its new spending bill. The extension of the tax credit will last at least five years. The ITC provides a 30% tax credit for all solar farms.
What Investors Must Know This Week
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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.