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Dow Jones Industrial Average News 4/22/16: On Friday, concerns about global growth were evident when Caterpillar Inc. (NYSE: CAT) announced a steep slowdown in sales of equipment in the wake of subdued commodity prices. The firm reported net income of $494 million. That's down from $1.70 billion in the same period of last year. The big news from its report is that the firm lowered its full-year outlook.
Now, let's discuss what happened in the markets today.
The Shocking Forecast for Oil Prices in 2016: Crude oil prices plunged in 2015, but our forecast points to a turnaround this year that will send the price of oil higher. Read more…
First up, check out the results for the Dow Jones, S&P 500, and Nasdaq:
Dow Jones: 17,998.44; +15.92; +0.09%
S&P 500: 2,091.63; +0.15; +0.01%
Nasdaq: 4,906.23; -39.66; -0.80%
Now, here's the top stock market news today…
DJIA Today: Tech Stocks Weigh Down All Three Major Indices
The technology sector turned negative year to date, a surprising development given FANG stocks' immense role in the markets in recent months.
Shares of the Microsoft Corp. (Nasdaq: MSFT) were the biggest drag on all U.S. indices as the technology giant fell 7%. The company's earnings were slightly below expectations, as weakness in the personal computer industry continues to weigh on the software industry. Microsoft's downturn today wiped out as much as $30 billion in market value.
Meanwhile, Alphabet Inc. (Nasdaq: GOOGL) stock fell 5.4% after the company badly missed earnings expectations. The company said that it suffered from a stronger dollar and from increased spending to boost traffic for its mobile advertising services.
Next, concerns about the health of the U.S. manufacturing sector are on the rise after Friday's release of the U.S. Market Manufacturing PMI Index, which fell to 50.8 in April. Manufacturing activity shrank in the first month of the second quarter. Even more concerning: It's the worst month for U.S. factories in roughly six-and-a-half years, which could signal a pullback in hiring.
This type of drawback places even greater emphasis on next week's FOMC meeting. The U.S. Federal Reserve will meet on April 26-27 to discuss monetary policy, and weakening manufacturing activity will likely weigh on the sentiment of the central bank. According to a Reuters poll of economists, there is very little expectation that the Fed will take action on interest rates until June. Here's what to expect at next week's meeting.
Another sign of slowing economic growth in the United States: The Baker Hughes Inc. (NYSE: BHI) weekly rig count fell another eight platforms to 382 in the nation. That figure is down from 703 rigs in the same period in 2015.
The downturn in rigs helped fuel another rally in oil prices. WTI crude oil prices added another 1.3% on the day, finishing the week up more than 8%. Meanwhile, Brent crude prices added another 1.3%, finishing up 5% in the last five days. This week, the International Energy Agency announced that supply is expected to decline in the months ahead due to a significant cut in investment by non-OPEC nations. Global asset manager Natixis said today that U.S. oil production will decline by at least 500,000 barrels per day in 2016. They anticipate a cut of another 500,000 daily barrels 2017.
Now, let's look at the day's biggest stock movers and today's most important stock strategy…
Top Stock Market News Today
- The total is in, and it's not good for automaker Volkswagen AG (OTCMKTS: VLKAY). The German carmaker said Friday that it is to take a 16.2 billion-euro ($18.2 billion) hit in its 2015 accounts related to a diesel-emissions scandal identified in the U.S. last year.
- Solar energy firm SunEdison Inc. (Nasdaq: SUNE) filed for bankruptcy protection this week. The firm is the latest member of the energy sector to go under due to slumping energy prices. Overall, the SunEdison stock price fell nearly 99% in the last nine months. Let's dig deeper into what went wrong, and what it means for the alternative energy industry.
- Shares of Starbucks Corp. (Nasdaq: SBUX) fell more than 5% after the firm missed sales expectations in the March-ending quarter.
- Shares of Visa Inc. (NYSE: V) slid more than 2% after the company announced earnings. The payment processor slashed its full-year revenue forecast, raising worries about consumer spending expectations. The company also said it would require a larger up-front cash payment to complete its purchase of Visa Europe.
- General Electric Co. (NYSE: GE) slipped after the industrial giant reported its organic revenue fell 1%. The firm still reported an earnings per share (EPS) of $0.21, beating consensus analyst expectations of $0.19, and maintained its full-year outlook.
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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.