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Dow Jones Industrial Average News, 4/27/2016: FANG stocks were keeping the markets afloat during the financial downturn during the first quarter. Now, they're slumping as a string of weak earnings reports weigh on investor sentiment.
Despite what the headlines are saying, Tuesday was actually a pretty good day for the markets. The S&P 500 saw 18 companies hit new 52-week highs, while just one hit a new low.
Meanwhile, the Nasdaq saw 60 new 52-week highs and 24 new 52-week lows. With the U.S. Federal Reserve meeting and earnings reports in focus today, everyone is wondering where the market is headed.
Can the market maintain momentum, or will the big names pull down the broader market? That's part of today's top stock market news, stocks to watch, ways to profit, and economic calendar for April 27, 2016.
What's Moving the Dow Jones Industrial Average Today: Apple Earnings Sink In
Dow Jones futures projected a 45-point slide as investors let earnings sink in and they begin to focus on the Federal Reserve's conference set for this afternoon. Tech stocks are slumping this morning, as the Nasdaq futures project a 49-point decline, or a 1.1% slump.
Here's a breakdown of why the markets are pushing lower this morning.
- First up, Apple Inc. (Nasdaq: AAPL). The AAPL stock price fell as much as 8% after it reported dismal earnings on Tuesday afternoon. The stock fell below $100 for the first time since February. Apple announced sales of 51.2 million iPhones in its second fiscal quarter, and that figure is off from 61.2 million units in the same period last year. The company missed Wall Street earnings estimates of $2 per share by $0.10, while revenue also fell well short of expectations.
- Later today, the Federal Reserve will release its most boring statement on monetary policy of the year. That's because the central bank is not poised to raise rates in April, and it's unclear if Janet Yellen will offer any additional insight on the weakening manufacturing sector or the timing of the next potential interest rate hike. Some anticipate that the Fed will raise rates in June, but the probability of a rate hike doesn't rise above 50% until the November FOMC meeting.
- Another quarter, another bad earnings report for Twitter Inc. (NYSE: TWTR). The company reported weaker than expected revenue in the first quarter as the firm's advertising sales slipped. Twitter also released a weak quarterly outlook, which helped push the stock down 12%.
- On the economic front, it's another day of housing data. Pay attention to pending home sales data later today to complement an update to the weekly MBA Mortgage Index.
- Crude oil prices are in focus again today when the U.S. Energy Information Administration reports weekly crude inventories. Oil prices swung to a 2016 high — with both Brent and WTI crude adding nearly 2% — as traders turned their attention to the supply side of the crude equation. The American Petroleum Institute projects a 1.1 million drawdown in domestic crude supplies, while OPEC leaders are increasingly optimistic that producing nations can reach an agreement in May to enforce a production freeze.
Now here's your list of top stocks to watch in today's market, plus today's economic calendar:
Companies to Watch in the Stock Market Today
- Merger mania is in focus. The Hollywood Reporter says that Jeffrey Katzenberg may sell Dreamworks Animation Skg Inc. (Nasdaq: DWA) to Comcast Corp. (Nasdaq: CMCSA) for more than $3 billion. The announcement comes as Comcast beat quarterly earnings and reported an increase in subscribers. The firm topped earnings expectations by five cents.
- It was a disappointing earnings report from Chipotle Mexican Grill Inc. (NYSE: CMG), which saw its stock fall roughly 6% early this morning. The silver lining? The revenue hit was driven by massive spending to lure back customers in the wake of a devastating public relations nightmare tied to a food-borne illness in some of its locations. The firm gave away more than six million burritos and bowls in February and March, in addition to a number of sides and chips to win back business.
- Meanwhile, Facebook Inc. (Nasdaq: FB) is set to report earnings after the bell on Wednesday. FB stock was off 1% in pre-market hours.
- On the earnings front, look for additional reports from Boeing Co. (NYSE: BA), Texas Instruments Inc. (Nasdaq: TXN), Marriott International Inc. (Nasdaq: MAR), First Solar Inc. (Nasdaq: FSLR), Northrop Grumman (NYSE: NOC), and PayPal Holdings Inc. (Nasdaq: PYPL).
Today's U.S. Economic Calendar (all times EDT)
- MBA Mortgage Applications at 7 a.m.
- International Trade in Goods at 8:30 a.m.
- Pending Home Sales Index at 10 a.m.
- EIA Petroleum Status Report at 10:30 a.m.
- FOMC Meeting Announcement at 2 p.m.
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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.