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Big cheers could be heard on exchange floors today as oil prices bounced higher and the Dow popped more than 250 points. A likely deal among global oil-producing nations overshadowed concerns about statements by U.S. Federal Reserve leaders during the last monetary policy meeting.
First up, check out the big gains for the Dow Jones Industrial Average, S&P 500, and Nasdaq today:
Dow Jones: 16,453.83; +257.42; +1.59%
S&P 500: 1,926.82; +31.24; +1.65%
Nasdaq: 4,534.07; +98.11; +2.21%
Then read today's top stock market news today…
DJIA Today: Oil Prices Surge, Buffett Wins Again
First up, energy prices dominated the news today, surging as much as 7%. The rally came after Iranian oil ministers backed a measure to freeze production levels in order to support price levels around the world. However, the freeze faces a number of different challenges, all of them being that many of these nations in and out of OPEC either don't trust each other, need more production to support their social budgets, or both. But investors are willing to take a wait-and-see approach. Global oil multinational giant Chevron Corp. (NYSE: CVX) rallied more than 4% on the news.
On the economic front, U.S. industrial production shocked economists by seeing its highest percentage increase in the last 14 months during January. The news is extremely positive given that the nation has experienced stagnant production levels during the same month in recent years due to weather problems or inventory challenges.
The industrial report was followed by the highly anticipated release of the Fed minutes from the January meeting. Federal Reserve policymakers effectively threw in the towel during their last monetary policy meeting. According to the minutes released this afternoon, the consensus among leaders of the central bank was… they have no clue whether ongoing market volatility will impede global economic growth. Previous minutes from other meetings included an assessment of global economic conditions, but that portion couldn't be found. Why the omission? Policymakers didn't know what to write.
"Most policy makers thought that the extent to which tighter conditions would persist and what that might imply for the outlook were unclear, and they therefore judged it was premature to alter appreciably their assessment of the medium-term economic outlook," the minutes read. Murmurs and curses about the Fed and its "nuclear option" could be heard as floor runners and traders took smoke breaks outside the Chicago Board of Trade.
But the lunchtime talk among traders – the big news – is what Warren Buffett did. He effectively called a floor on energy infrastructure stocks by building a stake in Kinder Morgan Inc. (NYSE: KMI). Shares of KMI stock surged nearly 10% on news Berkshire Hathaway Inc. (NYSE: BRK.A) built a stake in the firm over the fourth quarter. Shares had fallen as much as 75% over the last year as commodity prices and falling production dragged down midstream energy companies. But shares were churning today, as the company had the fourth-highest volume after Bank of America Corp. (NYSE: BAC), Freeport-McMoRan Inc. (NYSE: FCX), and Marathon Oil Corp. (NYSE: MRO).
Now, let's look at the day's biggest stock movers and Wednesday's top stock pick…
Top Stock Market News Today
- We can't talk about Bank of America's heavy trading volumes without explaining why. Well, its stock was up 2.4% after the firm set April 18, 2016, as its first-quarter earnings report. But more importantly, a research report from Baird Analysts argued consumer credit fundamentals in the United States look solid. The report stated that charge offs (NCOs) and credit delinquencies were down in January, two positive metrics for credit asset quality. Lower credit quality is a bad force on banks, so improvements are positive to their projected bottom lines.
- Not all oil investors were throwing $100 bills in the air today – the same ones that economist Larry Summers wants to ban. Shares of Devon Energy Corp. (NYSE: DVN) fell 4.4% after the company announced plans to slash its dividend. The firm slashed its capital expenditure budget for 2016 by 75% and announced plans to cut its workforce by 20%. In addition, a handful of executives announced plans to retire this summer as the company injects new blood into its management team.
- Meanwhile, a few members of senior management at FedEx Corp. (NYSE: FDX) are being shipped out of town after the global freight icon announced company-wide cuts and a shakeup at the top of the management chain.
- Overall, it was a good day of earnings reports and quarterly profit surprises. Shares of Garmin Ltd. (Nasdaq: GRMN), Fossil Group Inc. (Nasdaq: FOSL), and Priceline Group Inc. (Nasdaq: PCLN) all rallied after reporting strong earnings last quarter. Meanwhile, shares of Pepper Snapple Group Inc. (NYSE: DPS) fell more than 2.9% after the soda manufacturer's profit outlook fell flat with traders.
- Finally, here's your stock pick for Wednesday, Feb. 17. This stock has been beaten up over the last few months as concerns about global growth and exposure to China has weighed on investor sentiment. But when it comes to your portfolio, it's simply a must-own given its immense profits and its reach to developed, emerging, and frontier markets around the globe. In fact, this stock is a complete no-brainer, one that you should be gifting to your children and grandchildren in the future. We're talking about Apple Inc. (Nasdaq: AAPL). You know it, and if it's trading under $100 per share, it's a bargain. And the stock is about to take off thanks to the announcement of its next-generation phone set for sale in the coming months. Here's a breakdown of why Apple stock has at least 41% upside this year.
What Investors Must Know This Week
- The $600 Million Signal That Oil Prices Are About to Rise
- How to Prepare for a Global Recession in 2016
- This Easy Investing Strategy Can Lead to 2,426% Profits
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.