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Dow Jones Industrial Average News, 3/16/2016: Once again, pundits and financial media are wondering what the heck the U.S. Federal Reserve is doing aside from operating the U.S. economy from inside an academic fishbowl.
Fed Chairwoman Janet Yellen delivered a dovish and cautious statement during the post-FOMC meeting press conference today. During the statement and post-statement interview, she touted job growth (4.9% employment rate), spoke extensively about the "Phillips Curve," and later signed off with the message that the Federal Reserve is not considering negative interest rates as a policy decision.
We'll get into that and these other top market stories for Wednesday, March 16, 2016. First up, check out the results for the Dow Jones Industrial Average, S&P 500, and Nasdaq:
Dow Jones: 17,325.76; +74.23; +0.43%
S&P 500: 2,027.22; +11.29; +0.56%
Nasdaq: 4,763.97; +35.30; +0.75%
Now, here's the top stock market news today…
DJIA Today: Rate Chatter, OPEC Spurns Iran, and Obama's Next Nomination
The Dow Jones slid 20 points ahead of the post-FOMC news conference but quickly reversed after the Fed left interest rates unchanged. The central bank's sentiment indicated the Fed only foresees two rate hikes this year (down from a previous expectation of four). The Fed raised concerns about global economic conditions and said it plans to monitor U.S. inflation levels closely. Sentiment on the latter comes after inflation increased more than expected in February. From stocks to bonds, from gold prices to currencies, here's what the Fed's decision means for your money.
Money Morning Chief Investment Strategist Keith Fitz-Gerald joined "Closing Bell" on CNBC after Yellen's conference to offer his insight on the Fed's actions now and up ahead.
"I think the international central banks are doing the dirty work for [Janet Yellen]," he said. "Japan made its move, China made its move, and Europe made its move with its bazooka. They are making it impossible for the Fed to raise interest rates." Keith said traders will continue to remain cautious until June.
On the economic front, housing starts increased by 5.2% in February to their highest levels in five months. Improving weather and general economic conditions fueled the rise in expected housing construction. That news pushed shares of D.R. Horton Inc. (NYSE: DHI) and Lennar Corp. (NYSE: LEN) higher on the day.
Global oil-producing nations have had enough game theory with Iranian energy leaders. OPEC and non-OPEC leaders said they will proceed with a meeting to discuss a global production freeze (with or without) Iran in April. Fifteen nations – representing 73% of global oil production – have agreed on the initiative, according to a statement from Qatari Energy Minister Mohammed bin Saleh Al Sada. Brent crude ticked up 4.1% to close at $40.33 on the day.
Meanwhile, WTI crude prices rallied more than 5.8% to $38.46 a barrel thanks to OPEC's plans and additional news that U.S. inventory levels grew last week at a smaller rate than expected. The U.S. Energy Information Administration announced the United States added 1.3 million barrels to its record inventory level of 523.2 million barrels.
Morgan Stanley (NYSE: MS) was cursed by some investors after the firm issued a series of stock downgrades. Shares of LinkedIn Corp. (NYSE: LNKD) fell nearly 5%, while Gap Inc. (NYSE: GPS) dipped 1.5% after the investment bank thumbed its nose at both companies. Meanwhile, shares of Fossil Group Inc. (Nasdaq: FOSL) fell 4.8% after it had its stock rating slashed by research firm Macquarie.
But here's the story that generated all the buzz today.
President Obama announced Merrick Garland as his selection to replace deceased conservative justice Antonin Scalia on the SCOTUS. Garland is considered a center-left candidate on the court and has a record that favors positions of gun control. Sen. Mitch McConnell (R-KY) quickly announced that Congress has no plans to hold a hearing in the near future. Here's a history of Supreme Court nominations, including the ones that never received confirmation.
Now, let's look at the day's biggest stock movers and your stock picks of the day…
Top Stock Market News Today
- The blood is in the water for Valeant Pharmaceuticals International Inc. (NYSE: VRX). Following the stock's 51% slump yesterday, the company received a damning downgrade from Nomura. The investment firm slashed its price target from $175 to $60 per share. Of course, the firm is way too late. Six months ago, Money Morning Global Credit Strategist Michael Lewitt predicted the stock would slump below $50 when the price hovered near $120 per share. Here's what to do about VRX now.
- On the earnings side, shares of Oracle Corp. (NYSE: ORCL) gained 3.8% after the enterprise software firm beat Wall Street earnings estimates.
- A number of accounting problems seem to be hitting Wall Street these days. The latest example is SunEdison Inc. (NYSE: SUNE). The company announced plans to delay its 2015 annual report as it investigates its accounting practices. Shares fell 0.2% on the news.
- Finally, here are your stock picks of the day. Global commerce is being swept up in a mega-trend that the world has never seen before. In fact, this wave of innovation will be worth as much as $14.4 trillion in the next five years. And while you don't even realize it, the technology we're talking about, you're using it now… you'll use it tonight… you'll use it on the way to work… in the elevator… and you won't even realize just how powerful and profitable this trend has and will become. Read here to learn all about the companies poised to surge as the Internet of Everything envelops our world.
What Investors Must Know This Week
- These Four Charts Have Every Wall Street Pro Worried
- Grab Double-Digit Gains with This Tech Overachiever
- The One "Investment" You Can't Afford to Be Without
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.