Apple Inc. (Nasdaq: AAPL) offered the largest boost to the Nasdaq and the S&P 500 as investors continue to follow Warren Buffett after his recent announcement of a 9.8 million share stake. Meanwhile Goldman Sachs Group Inc. (NYSE: GS) offered the biggest boost to the Dow as investors grow more expectant of an interest rate hike in the coming months.
Here's what else you need to know about the markets on May 18, 2016.
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First up, check out the results for the Dow Jones Industrial Average, S&P 500, and Nasdaq:
Dow Jones: 17,526.62; -3.36; -0.02%
S&P 500: 2,047.63; +0.42; +0.02%
Nasdaq: 4,739.12; +23.39; +0.50%
Now, here's the top stock market news today...
The U.S. Federal Reserve is back in focus this afternoon. Financial stocks pushed higher on the possibility that the central bank could boost interest rates sooner than markets previously expected. Following Tuesday's report indicating that consumer prices increased at a surprise rate in April, the central bank released minutes from its meeting last month. According to the minutes, the central bank said that the possibility of another rate hike is on the table during the next FOMC meeting - set for June 14-15.
Yesterday, Dallas Fed President Robert Kaplan said during a speech that he will push for a rate increase in June or July. Other Fed officials have advocated for up to three increases this year. Shares of JPMorgan Chase & Co. (NYSE: JPM) pushed up 3.5%, while Morgan Stanley (NYSE: MS) gained 3.2%. But interest rates are not what financial sector investors should be focused on. With one prominent member of the Fed suggesting that it's time to break up the banks, and politicians in Washington wanting to end "Too Big to Fail," that day may soon come. But our Shah Gilani warns that the banks could collapse before that day of reckoning happens.
The rise in financial stocks offset weakness again in the retail sector. Investors can partially blame Target Corp. (NYSE: TGT), which saw shares crater by nearly 9% after the firm fell well short of quarterly sales expectations. The firm's same-store sales were lower than analysts projected. The poor earnings report pulled down shares of Wal-Mart Stores Inc. (NYSE: WMT) - which reports earnings tomorrow - and Costco Wholesale Corp. (Nasdaq: COST), which both fell more than 2.5%.
Meanwhile, crude oil prices pushed lower as rate chatter pushed up the value of the U.S. dollar. Given that global crude oil is priced in dollars, any strengthening of the currency leads to weakness in oil prices. In addition, the U.S. Energy Information Administration reported a 1.3 million barrel increase in domestic supplies last week. WTI prices fell 1.1%, while Brent crude slipped 1.5%. In the energy sector, shares of Chevron Corp. (NYSE: CVX) and Exxon Mobil Corp. (NYSE: XOM) rose 0.3% and 0.4%, respectively.
But the big news today was the stock market downgrade from investment bank Goldman Sachs Group Inc. (NYSE: GS). The firm downgraded its 12-month outlook for equities to "Neutral." "Until we see sustained signals of growth recovery, we do not feel comfortable taking equity risk, particularly as valuations are near peak levels," wrote analysts at Goldman Portfolio Strategy Research. The firm said that it sees stocks being too expensive, particularly in Europe and North America.
Now, let's look at the day's biggest stock movers and the must-own stock for today...
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About the Author
Garrett Baldwin is a globally recognized research economist, financial writer, consultant, and political risk analyst with decades of trading experience and degrees in economics, cybersecurity, and business from Johns Hopkins, Purdue, Indiana University, and Northwestern.