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Dow Jones Industrial Average News, 5/3/16 – The VIX, commonly referred to as the market's fear gauge, surged more than 9% today (Tuesday) as the Dow tanked over concerns about the health of the global economy.
A report showed that manufacturing activity in Chinese factories declined for the 14th consecutive month. The news is certainly unwelcome given that the country has thrown every monetary policy decision at its industries to try to spur economic growth – from currency devaluations to massive quantitative easing programs and more.
Of course, none of this is surprising to us. Nations are failing to introduce badly needed structural reforms to liberalize their economies and boost economic growth. The continued reliance on low interest rates and centrally planned spending is creating a global liquidity trap.
Here's what else you need to know about the markets on May 3, 2016.
We're Seeking Maximum Profit from These "IPO Icebreakers" – 2016 has been a rough year for IPO investors, but that's about to change in the most lucrative way possible. Here's what you need to know to get ready for the turnaround.
First up, check out the results for the Dow Jones, S&P 500, and Nasdaq:
Dow Jones: 17,750.91; -140.25; -0.78%
S&P 500: 2,063.37; -18.06; -0.87%
Nasdaq: 4,763.22; -54.37; -1.13%
Now, here's the top stock market news today…
DJIA Today: China's Economy Can't Break Out of Neutral; Oil Prices Slump
First, the good news. April was a good month for auto manufacturers. Domestic sales increased by 5% and put the industry on pace to beat its 2015 record for annual sales this year. But all that cheer didn't do much for company stocks. Shares of Fiat Chrysler Automobiles NV (NYSE: FCAU) fell 3% today despite a 5.6% rise in monthly sales. Meanwhile, shares of General Motors Co. (NYSE: GM) fell by nearly 2% after the firm reported a noticeable sales decline from its fleet division. Ford Motor Co. (NYSE: F) finished the day off 1.4%.
Shares of Apple Inc. (Nasdaq: AAPL) were one of the few bright spots in today's trading session. The company gained more than 1.6% as chatter emerged about possible strategies to overcome its struggles in China. Last week, the company reported its worst quarterly earnings report since 2003 and took a public relations hit when activist shareholder Carl Icahn announced that his firm had ditched its sizeable stake in the technology giant. That said, investors shouldn't overthink Apple stock and make the same mistake that Icahn has made. Apple will turn it around, and here's how.
But the big news today was WTI crude oil prices, which slipped 2.3% on concerns about a global supply glut. Increased output from the Middle East and the North Sea surprised traders. Reports indicate that Iran has already doubled its daily production to 2 million barrels since Western economies lifted sanctions over the nation's nuclear program. Brent crude oil was off 1.6%.
The decline in energy commodity prices dragged down the broader energy sector, which saw its worst one-day performance since March. Shares of Exxon Mobil Corp. (NYSE: XOM) and Chevron Corp. (NYSE: CVX) were off 1.5% and 2%, respectively.
Now, let's look at the day's biggest stock movers and the must-own stock for today…
Top Stock Market News Today
- Hedge fund manager David Einhorn is bullish about a tech company that has seen its stock slide as much as 85% over the last 52 weeks. Shares of Yelp Inc. (Nasdaq: YELP) were up 2.7% today after Einhorn took a stake in the company and said that he sees the potential for 30% upside in the firm. It is a bold move for Einhorn and his hedge fund Greenlight Capital, given that he has been labeled by many as a short-seller and famously predicted the doom of Bear Stearns in 2008.
- On the earnings front, Anadarko Petroleum (NYSE: APC) saw its stock slide 4.2% after the firm reported lackluster quarterly results. The oil and gas exploration firm fell short on top-line earnings by four cents and missed bottom-line earnings expectations.
- What could be more fitting for a wild ride on Wall Street than actual roller coasters? Shares of Six Flags Entertainment Co. (NYSE: SIX) fell 1.5% despite news that the company is going to open a new park in the United Arab Emirates in 2019. Investors seemed unimpressed today despite the firm's release of its development plans, which will include several "record-breaking" roller coasters, according to Yahoo! Finance.
- Shares of Halliburton Co. (NYSE: HAL) cratered nearly 5% ahead of its post-market earnings report. The company is trying to determine ways to boost growth after calling off its planned $28 billion merger with rival Baker Hughes Inc. (NYSE: BHI).
- Finally, here is your stock of the day. By 2018, 27.8% of the worldwide enterprise applications market will be SaaS-based, generating $50.8 billion in revenue. That's a 125% increase from the $22.6 billion the space earned in 2013, according to IDC. That's a massive industry that is flying under the radar. And savvy investors should consider a favorite industry pick of Money Morning Director of Technology & Venture Capital Michael A. Robinson. Here it is…
Oil prices have suffered one of the worst crashes in modern history. But WTI prices have seen a strong rally over the last month, and there's one reason why they'll keep going higher in 2016 and beyond…
The 5 Most Important 2016 IPOs to Watch: There was a shocking absence of IPO activity in 2015. But we'd like to see these five companies go public in 2016. If they do they'll be the most exciting and promising deals of the year…
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.