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The Dow Jones Industrial Average couldn't leap higher on Leap Day despite news China is on a path to boost stimulus efforts in order to re-, re-, re-, re-jump-start its struggling economy. Still, Warren Buffett said U.S. stocks will spring forward with big returns in the future. On an important day of economic data, Buffett's shareholder letter and morning market interview dominated the day-time discussion about the U.S. economy and stocks.
Here's what happened in the markets on Leap Day, Feb. 29, 2016.
Dow Jones: 16,516.50; -123.47; -0.74%
S&P 500: 1,932.23; -15.82; -0.81%
Nasdaq: 4,557.95; -32.52; -0.71%
Now, here's the top stock market news today…
DJIA Today: Buffett's Bold Bets, Oil Rallies, Merger Mania, and Italian Coffee
Traders kept a close eye on data for any clues about the health of the U.S. economy and to predict whether the Federal Reserve plans to increase interest rates in 2016. This morning, contracts to purchase existing homes fell to a one-year low, likely due to bad winter weather and a shortage of available housing inventory. Meanwhile, the Chicago PMI contracted in February as U.S. factory activity remains lower due to a strong dollar, oil prices, and falling overseas demand.
The People's Bank of China – you know, money… for people – announced it will slash its reserve requirement ratio for the fifth time over the last year. This will reduce the amount of money banks are forced to hold as reserves and permits the increase of leverage in an economy – because when has that ever gone wrong?
Starbucks Corp. (Nasdaq: SBUX) caused a stir today on news it will boldly attempt to enter the Italian coffee market, news that jolted investors and espresso drinkers alike. In fact, the firm will place its first Italian location in the birthplace of espresso – Milan, Italy. This is a bold decision by the company, whose founder developed the idea for Starbucks 33 years ago while on a business trip to the region, which has a very rich coffee culture. Starbucks has struggled in other foreign markets like the United Kingdom and Australia in the past.
Oil prices jumped more than 3% on news Saudi Arabia plans to work with OPEC partners and other producing nations to freeze production and reduce market volatility. Despite the news, shares of Chevron Corp. (NYSE: CVX) and Exxon Mobil Corp. (NYSE: XOM) fell by 1% and 1.9%, respectively. Make no mistake about it, oil prices are heading higher. Be sure to check out how you can profit from the "Great Oil Turnaround" of 2016. Read it here.
Merger mania reared its head again. Shares of Icahn Enterprises LP (Nasdaq: IEP) jumped another 3.7% after the activist fund announced it would try to purchase remaining shares of Federal-Mogul Holdings Corp. (Nasdaq: FDML), which jumped nearly 46% on the day.
But the big talk today was CNBC's morning interview with investment legend Warren Buffett. The chairman and CEO of Berkshire Hathaway Inc. (NYSE: BRK.A, BRK.B) said he was bullish about the U.S. economy and said the "country will grow in value over time." During the interview, Buffett raised concerns about negative interest rates in Europe and Japan and said privacy has its limits when asked about the ongoing battle between the FBI and Apple Inc. (Nasdaq: AAPL). In addition, Buffett said he doesn't regret buying shares of International Business Machines Corp. (NYSE: IBM), which have fallen 19.1% over the last year. Finally, Buffett praised Bernie Sanders' ability to stick to his original political message and not changing it on a week-to-week basis like other politicians. Buffett is a supporter of Hillary Clinton.
Oh, and by the way, Berkshire reported that fourth-quarter profits jumped a pretty 18%, while revenue increased by 7% to $51.82 billion.
Now, let's look at the day's biggest stock movers and your Monday stock picks…
Top Stock Market News Today
- The largest drag on the Nasdaq and S&P 500 were shares of Endo International Plc. (Nasdaq: ENDP), which fell more than 21% on the day. The company sorely missed revenue forecast expectations, which sent investors heading for the exits.
- The good news for Valeant Pharmaceuticals International Inc. (NYSE: VRX)? The company's CEO Michael Pearson is returning to work after a long bout against pneumonia. The bad news? Shares slumped more than 18% after the company pulled its fourth-quarter earnings report and forward guidance, saying it would reschedule its announcement.
- Shares of Lumber Liquidators Holdings Inc. (NYSE: LL) added nearly 2.3% despite its third consecutive quarter of sales declines. The firm continues to undergo a public relations crisis as customers remain concerned about links between the firm's hardwood flooring and cancer-causing agents.
- Tribune Media Co. (NYSE: TRCO) saw shares jump nearly 9% after the company announced it's exploring strategic options after the firm swung to a loss. The firm's stock is down 48% over the last year. It seems like deal-making is one of the few options left for U.S. companies as organic growth stalls and investors demand greater shareholder value.
- Finally, here are three stocks to consider if you want to make money on the "Great Software Sell-Off" of 2016. Today, Money Morning Defense & Technology Specialist Michael A. Robinson explains how the market's retreat has produced several great bargains in the biotech sector. It's a perfect time for bargain hunters to find real value in this beaten-up market. Fact is, you might not be able to buy biotech stocks like these at a discount for a very long time. Best part, Michael has three recommendations allowing you to assess your risk tolerance and the potential upside tied to each.
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.