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The trading week ended with a thud on Friday after oil prices slid and materials stocks slumped in terrible fashion. Large-cap stocks Boeing Co. (NYSE: BA) and Chevron Corp. (NYSE: CVX) pulled down the Dow, while tech stocks bucked the trend and helped the Nasdaq eek out a gain.
First up, check out the performance of the Dow Jones Industrial Average, S&P 500, and Nasdaq today:
Dow Jones: 16,391.99; -21.44; -0.13%
S&P 500: 1,917.78; -0.05; 0%
Nasdaq: 4,504.43; +16.89; +0.38%
Then read the top stock market news today…
DJIA Today: Icahn's Woes, Obama's Fibs, and Witness Intimidation
First up, activist investor and Wall Street icon… Carl Icahn… had a no good, very bad day. Shares of Icahn Enterprises LP (Nasdaq: IEP) cratered more than 11% on news the S&P is considering a move to slash the firm's credit rating to junk status. The ratings agency issued the warning due to the stunning losses the firm has endured over the last few months. According to Reuters, the firm has lost "at least $1.4 billion in value" since September 2015.
Remember when the president said his healthcare law would drive down health insurance costs? Not only did the argument defy economic logic, but it also turned out to be a massive fib. According to U.S. Labor Department data released today, health insurance costs surged 4.8% over the last year, as insurers have been hiking premiums to cover the broader pool of enrollees. This was the fastest increase in prices since April 2013, and health insurance costs are significantly outpacing the wider inflation numbers. Health insurance stocks Aetna Inc. (NYSE: AET), Anthem Inc. (NYSE: ANTM), and Cigna Corp. (NYSE: CI) were all down on the day.
The inflation report indicated a big boost in the cost of home rentals as well. With inflation on the rise, the U.S. Federal Reserve could be motivated to increase interest rates gradually over the year. However, the futures markets aren't expecting an interest rate hike anytime soon. According to CME Fed Watch, the markets don't see the central bank raising interest rates until after February 2017.
But the lunchtime-talk among traders centered on the upcoming trial of bad boy hedge fund manager Martin Shkreli. Late yesterday, U.S. prosecutors announced a few witnesses who could testify to his securities fraud case are worried about retaliation. They said they have received threats from Shkreli in the past. Shkreli's lawyer called the charges and a request to delay a related lawsuit "preposterous." Prosecutors presented evidence in a brief that Shkreli "has taken steps to intimidate or threaten individuals in the past." This included "campaign of harassment" against an employee at pharmaceutical firm Retrophin in 2013.
Now, let's look at the day's biggest stock movers and Friday's stock to avoid…
Top Stock Market News Today
- It was a terrible day for railroad stocks, perhaps the worst in recent memory. Shares of Trinity Industries Inc. (NYSE: TRN) cratered more than 22% after the railcar manufacturer badly missed forecast expectations. That announcement pulled down the broader sector and raised concerns about demand in the domestic freight industry. Shares of American Railcar Industries Inc. (Nasdaq: ARII) and Greenbrier Companies Inc. (NYSE: GBX) were both off more than 8%. Rail transportation companies like CSX Corp. (Nasdaq: CSX) and Norfolk Southern Corp. (NYSE: NSC) were largely unaffected.
- The news wasn't much better in the retail sector today after high-end department store operator Nordstrom Inc. (NYSE: JWN) reported weaker than expected results from the holiday quarter. Shares fell 6.7% on the news, a downturn that weighed the stocks of its sector rivals.
- Global oil multinational giant Chevron Corp. (NYSE: CVX) slipped 0.3% after oil prices slipped again. WTI crude prices and Brent prices both fell 3.7% on concerns about oversupply and news of rising U.S. inventory levels.
- Shares of Apple Inc. (Nasdaq: AAPL) slipped 0.2% this afternoon. Traders were largely unfazed by news that government officials have filed a motion that would force the company to unlock phones recovered after the San Bernardino terrorist attacks. Apple is resisting the order and has received support from companies like Facebook Inc. (Nasdaq: FB), Twitter Inc. (NYSE: TWTR), and Walt Disney Co.(NYSE: DIS). The company argues that turning over such information would weaken consumer privacy protections.
- Finally, here's the stock we're not recommending today. In fact, this is a stock that you might want to short or buy puts on in the near future. Today, shares of Yahoo! Inc. (Nasdaq: YHOO) rallied more than 2% on news the company is poised to start exploring strategic alternatives. But we're not expecting Yahoo's rally to last in 2016. Here are several reasons why we remain bearish on YHOO stock.
Despite this week's rally, investors are still wondering if we're heading for a stock market crash, correction, or bear market. Here's what our Money Morning experts predict will happen in 2016…
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.