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For Jan. 7, 2016, 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: 16,514.10; -392.41; -2.32%
S&P 500: 1,943.09; -47.17; -2.37%
Nasdaq: 4,689.43; -146.34; -3.03%
The 2016 China stock market meltdown hammered the Dow Jones Industrial Average again today (Thursday) after Chinese stocks fell 7% and triggered circuit breakers for the second time this week. Gold prices rallied to a nine-week high, while silver prices surged 2.5% as fear spread across the markets and investors sought safe-haven currencies. The S&P 500 Volatility Index (VIX) surged more than 21%.
The Dow Jones Industrial Average cratered more than 392 points while the Nasdaq pushed into correction territory, falling more than 3%. The tech-heavy index lost a stunning 146 points on concerns the People's Bank of China may continue to devalue its currency. A report by Reuters indicated the nation's central bank was under pressure to allow its currency to fall by a quick and dramatic amount – as much as 15%. The growing consensus is the gradual process of allowing the currency to devalue has fueled additional harm to the economy. With another sharp downturn today, investors around the world are asking the same question: Will the stock market crash in 2016?
Top Stock Market News Today
- Stock Market Today: All 10 major S&P sectors fell again after the Chinese stock markets had their shortest day in 25 years and closed after just 29 minutes of trading. Today's sell-off came after the People's Bank of China made its largest downward adjustment to the yuan since August. Energy stocks and materials stocks were again the biggest decliners as commodity prices continue to crater.
- Tech Troubles: The tech-heavy Nasdaq had a brutal trading day as concerns about valuations and exposure to the struggling Chinese markets rattled trader sentiment. Shares of Apple Inc. (Nasdaq: AAPL) and Amazon.com Inc. (Nasdaq: AMZN) both slid more than 3.9%. Meanwhile, Baidu Inc. (Nasdaq ADR: BIDU) fell more than 6%.
- Oil Losses: Crude oil prices temporarily dipped below $33 for the first time since 2003 as China's market slump pushed investors out of the sector on concerns regarding oversupply and cratering demand from the world's second-largest economy. The news brought additional downward pressure over previous geopolitical concerns stemming from the break in diplomatic relations between OPEC leaders Saudi Arabia and Iran. February's WTI prices were off 2.1% at $33.27 per barrel. Meanwhile, Brent oil – priced in London – fell 1.4% to hit $33.75. The sector's most active traders today were Exxon Mobil Corp. (NYSE: XOM) and Chevron Corp. (NYSE: CVX), which fell 1.6% and 3.5% on the day, respectively. Renewable energy companies with exposure to China also had a very difficult day. The energy sector's worst performer, JinkoSolar Holding Co. Ltd. (NYSE: JKS), fell more than 19%.
- On Tap Tomorrow: On Friday, the markets will look to move beyond China's stock market collapse and find some positive momentum in U.S. economic data. The busy economic calendar includes the December unemployment report, a monthly update on wholesale trade, the weekly Baker Hughes Inc. (NYSE: BHI) rig count, and a report on U.S. consumer credit. Companies set to report quarterly earnings include Acuity Brands Inc. (NYSE: AYI), AZZ Inc. (NYSE: AZZ), and Synergy Resources Corp. (NYSEMKT: SYRG).
Stocks to Watch: SUNE, M, ABX, GG, YHOO, BABA
- Stocks to Watch No. 1, SUNE: Shares of Sunedison Inc. (NYSE: SUNE) fell nearly 40% after the company announced a new debt exchange. The company needed to dilute its stock holdings in order to secure a loan that pays an incredibly high interest rate for the renewable energy sector. The company will pay LIBOR and a 10% premium to pay off a $170 million balance on an existing loan.
- Stocks to Watch No. 2, M: Shares of Macy's Inc. (NYSE: M) gained 2.1% and were one of the lone bright spots on the day, despite issuing bad financial news. The retailer announced plans to cut $400 million in expenses and lay off thousands of employees. The decision comes after the firm announced a disappointing fourth quarter for both sales and earnings. The company plans to slash 3,000 associate jobs, 600 back-office positions, and 165 senior executive roles.
- Stocks to Watch No. 3, ABX: Shares of Barrick Gold Corp. (NYSE: ABX) and Goldcorp Inc. (NYSE: GG) jumped 10.2% and 7.8%, respectively, on news that gold prices hit a nine-week high. Following a very bad 2015 for gold producers, the rush to safety by traders and investors has offered a rally for the yellow metal.
- Stocks to Watch No. 4, YHOO: Shares of Yahoo! Inc. (Nasdaq: YHOO) fell 6.2% after a report indicated the struggling tech giant plans to cut its workforce by at least 10% this year. The news comes a few days after an activist hedge fund manager demanded new leadership at the company. E-commerce giant Alibaba Group Holding Ltd. (NYSE: BABA), in which Yahoo still owns a large stake, saw its stock fall 5.9% today due to the massive market downturn in China.
What Investors Must Know This Week
- The Best Market Crash Insurance You Can Buy
- Grab Triple-Digit Gains from This "Stealth" Tech Star
- The Real Reason for China's Insatiable Gold Lust
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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.