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Dow Jones Industrial Average News, 5/19/2016: It was another losing day on Wall Street as trader sentiment builds for a summer interest rate hike and optimism declines in the wake of Goldman Sachs Group Inc.'s (NYSE: GS) 12-month equity warning.
Today, the S&P 500 slumped to its lowest level since March, while the market's fear gage, the CBOE Volatility Index (VIX), ticked back above 16 after increasing 4.2%.
Yesterday, the U.S. Federal Reserve bank released the April FOMC meeting minutes, and many officials made the argument in favor of a June interest rate hike. According to CME FedWatch, a tool that measures the probability of a rate hike, there is a 30% probability of a hike next month. But that is significantly higher than the probability prior to the minutes' release.
Gold prices and silver prices were sliding 1.5% and 3.6%, respectively, as the stronger dollar weakened investor sentiment. With so many mixed opinions on what the Federal Reserve is planning on doing in the weeks ahead, investors are wondering if they should purchase silver after Thursday's price slide and ahead of the rate decision. Find that answer and insight from Money Morning Resource Specialist Peter Krauth, right here.
Here's what else you need to know about the markets on May 19, 2016.
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First up, check out the results for the Dow Jones, S&P 500, and Nasdaq:
Dow Jones: 17,435.40; -91.22; -0.52%
S&P 500: 2,040.04; -7.59; -0.37%
Nasdaq: 4,712.53; -26.59; -0.56%
Now, here's the top stock market news today…
DJIA Today: Interest Rates Send Shivers Down the Spines of Traders
The number of Americans seeking unemployment benefits slipped from a 14-month high last week, boosting optimism about a possible economic recovery in the second quarter. Traders viewed today's jobless claims report as another reason why the Fed could consider a hike in interest rates during the June 14-15 FOMC meeting.
On the deal front, shares of Monsanto Co. (NYSE: MON) were up 4% on news that German chemical giant Bayer AG (OTCMKTS ADR: BAYRY) has offered an unsolicited takeover bid for the international seed giant. The deal would create the world's largest agricultural supplier and easily surpass the $42 billion deal received by Syngenta AG (NYSE ADR: SYT) earlier this year.
Meanwhile, crude oil prices pushed slightly lower as supply disruptions are abating. Today, Canadian firefighters received help from Mother Nature against wildfires plaguing production. Meanwhile, Exxon Mobil Corp. (NYSE: XOM) announced that it is boosting production in Nigeria to offset export weakness in the oil-rich nation.
Earlier this week, Goldman Sachs Group Inc. (NYSE: GS) reversed its bearish stance on oil prices, saying that it believed that the price of crude would tick north and that the global supply glut was over. Typically, you should ignore Goldman's insight, since they are rarely objective and usually report timely information. Our Global Energy Strategist Dr. Kent Moors says that you shouldn't trust Goldman, especially on oil prices. Here's why.
But the big news today was the bizarre tale that seems like it could only come from a Hollywood script. PGA professional Phil Mickelson is under investigation from the U.S. Securities Exchange Commission for his involvement in a $40 million insider trading scheme. According to the agency, the professional golfer earned roughly $931,000 after receiving an insider tip on the quarterly performance of Dean Foods (NYSE: DF) and a related company spin-off. The story grows odd when one discovers that Mickelson received the tip from a professional gambler – to whom the golfer owed money. In addition, the gambler allegedly received his inside information from none other than the former Dean Foods Chairman Thomas Davis. Mickelson chose to not go the Martha Stewart route and settled the case for roughly $1 million and interest.
Now, let's look at the day's biggest stock movers and the must-own stock for today…
Top Stock Market News Today
- Overall it was a good day for retail stocks, which have been reeling over the last two weeks. Today, shares of Wal-Mart Stores Inc. (NYSE: WMT) rallied 9.4% after global retail giant beat Wall Street earnings expectations of $0.88 per share by $0.10. The firm has seen remarkable growth in its online sales as it continues to compete for market share against e-commerce giant com Inc. (Nasdaq: AMZN).
- Meanwhile, the markets got gains out of Dick's Sporting Goods Inc. (NYSE: DKS) and Urban Outfitters Inc. (Nasdaq: URBN), which both beat earnings expectations and reported a bump in sales. DKS stock rallied 8.8%, while URBN shares were up 13% on the day.
- Tech investors were smiling after both Cisco Systems Inc. (Nasdaq: CSCO) and com Inc. (NYSE: CRM) topped Wall Street earnings expectations. Cisco's earnings beat is especially important because it helps offset growing concerns among investors that companies aren't spending enough on technology. Cisco issued a very positive sales forecast. Meanwhile, Salesforce continued an especially impressive streak, as it has beaten Wall Street revenue expectations in every quarter since Q2 2007.
- Finally, here is your stock of the day. Wall Street has been down on this technological wonder stock for the last few weeks. True, the stock has fallen by more than 9% since its last earnings report. But fortunes are bought and made on contrarian picks when value presents itself. And Money Morning Capital Wave Strategist Shah Gilani says that this software giant has at least 20% upside in the short term, before it breaks into the stratosphere. Check it out, right here.
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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.