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For Feb. 5, 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?
S&P 500: 1,880.02; -35.43; -1.85%
Nasdaq: 4,363.14; -146.42; -3.25%
The Dow Jones Industrial Average today (Friday) fell 211 points after the U.S. Labor Department released a mixed jobs report for January. Tech stocks sank after LinkedIn Corp. (NYSE: LNKD) announced weak guidance for Q1 2016, and biotech stocks dragged down the healthcare sector and the Nasdaq.
The CBOE Volatility Index (VIX) – Wall Street's fear gauge – was up 8.9%.
On the economic front, the unemployment rate fell to 4.9% in January, but the country only created 151,000 jobs. Economists expected 190,000 new jobs last month. This report likely puts the nail in the coffin for an interest rate hike in March. Payroll grew north of 200,000 and stronger hourly earnings would have boosted the case for the Fed to hike interest rates in March. However, the odds of a rate hike plunged below 10% today, according to CME FedWatch. This is the lowest "official" unemployment rate since 2008.
Top Stock Market News Today
- Stock Market Today: All 10 major S&P sectors fell, with tech stocks showing the sharpest declines. Shares of Amazon.com Inc. (Nasdaq: AMZN) slumped 6.4%, while Alphabet Inc. (Nasdaq: GOOGL) and Microsoft Corp. (Nasdaq: MSFT) both declined by more than 3.4%. Shares of the iShares NASDAQ Biotechnology Index ETF (Nasdaq: IBB) fell 3.2% on the day.
- Obama Budget: President Barack Obama offered a speech today on the state of the U.S. economy. While celebrating a "durable economy" with an unemployment rate of 4.9%, he said now is the time to impose a $10-per-barrel tax on oil while prices are at "historic lows." The plan, which would boost the per-gallon cost of gasoline by $0.25, would use the new revenue to increase spending on clean energy infrastructure and transportation. The president called the tax a trade off now that the four-decade oil export ban has been lifted. Republicans called the tax "dead on arrival."
- Oil Prices: Crude oil prices slipped lower after the president's proposal hit the airwaves. WTI crude oil – priced in New York – fell 2.6% to hit $30.89 per barrel. Brent crude – priced in London – dipped 1.2% to hit $34.06 per barrel. Meanwhile, shares of Exxon Mobil Corp. (NYSE: XOM) added 0.3%, and shares of Chevron Corp. (NYSE: CVX) fell 2.3%.
- On Tap Next Week: On Monday, a light economic calendar is limited to the Labor Market Conditions Index and the TD Ameritrade IMX. Markets in China will be closed for the Chinese New Year. Companies set to report quarterly earnings include Yelp Inc. (NYSE: YELP), Hasbro Inc. (Nasdaq: HAS), Cognizant Technology Solutions Corp. (Nasdaq: CTSH), Diamond Offshore Drilling Inc. (NYSE: DO), Lennox International Inc. (NYSE: LII), Qualys Inc. (Nasdaq: QLYS), and Owens-Illinois Inc. (NYSE: OI).
Stocks to Watch: LNKD, TSLA, TSN
- Stocks to Watch No. 1, LNKD: Shares of LinkedIn Corp. (NYSE: LNKD) crashed 43.6% after the social business network revised its earnings per share (EPS) estimates to $0.55 on $820 million in revenue for Q1. That's far below Wall Street's expectations of $0.75 on $868.3 million in revenue. Investors are likely wondering if now is a good entry point to purchase the stock, but we recommend that you make this investment instead.
- Stocks to Watch No. 2, TSLA: Shares of Tesla Motors Inc. (Nasdaq: TSLA) were off 7.3% to a new multiyear low as oil prices continue to slide (reducing demand for electric vehicles) and investors prepare for next week's earnings report. With the stock now down more than 45% over the last six months, is now the time to buy TSLA stock? Here's the answer, right here.
- Stocks to Watch No. 3, TSN: Shares of Tyson Foods Inc. (NYSE: TSN) gained 9.9% after the meat producer reported fiscal first-quarter earnings. Its earnings per share (EPS) of $1.15 easily beat Wall Street expectations of $0.89, while it also topped $10.1 billion in revenue expectations. The firm also boosted its buyback program by 50 million shares and hiked its 2016 outlook.
What Investors Must Know This Week
- Where We'll Find Our Biggest Profits This Year
- What a Chinese Stock Market Crash Means for Investors
- Your "Buy List" to Profit from Volatility in 2016
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.