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Dow Jones Industrial Average News, 5/20/16 – The economy looks like it is climbing out of the doldrums of a weak first quarter. This morning, the New York Federal Reserve said that GDP is expected to register an annualized rate of 1.7% in the second quarter. That's 0.5% higher than the NY Fed's previous estimate last week. The economy has seen gains from the manufacturing sector and the housing industry. The Dow added 40 points as trader sentiment improved thanks to the stronger economic outlook.
Here's what else you need to know about the markets on May 20, 2016.
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First up, check out the results for the Dow Jones, S&P 500, and Nasdaq:
Dow Jones: 17,500.94; +65.54; +0.38%
S&P 500: 2,052.32; +12.28; +0.60%
Nasdaq: 4,769.56; +57.02; +1.21%
Now, here's the top stock market news today…
DJIA Today: Markets Anticipate Summer Rate Hike, Oil Prices Slip
Shares of Deere & Co. (NYSE: DE) fell more than 5.2% after the company reported falling sales and profits in the wake of a decline in agricultural commodity prices. The heavy machine manufacturer said that the global agriculture sector has slowed down; however, the firm said that its focus on cost containment helped it overcome low expectations for the quarter.
Meanwhile, financial stocks rallied again as expectations for a summer rate hike take shape. New York Fed President William Dudley said yesterday that improving economic data justifies a rate increase in June or July. It's the latest signal that the markets are still overly reliant on the words and actions of the U.S. Federal Reserve, which holds its next policy meeting on June 14-15.
The National Association of Realtors announced the April report for existing U.S. home sales, and investors liked what they heard. Existing sales increased in April by 1.7%, the latest sign of positive momentum in the industry. The news helped push up shares of housing stocks this afternoon. Shares of KB Home (NYSE: KBH) pushed up 1.6%, while Toll Brothers Inc. (NYSE: TOL) added more than 2.4%.
Crude oil prices slipped as supply concerns fell in focus on Friday. Concerns about Nigeria's production level weighed on investor sentiment. WTI crude prices slipped 0.8%, while Brent crude dipped 0.1%. Oil prices were up 4% on the week and have been hovering right around $50 per barrel as global supply disruptions continue to plague oil-producing nations like Nigeria, Canada, and Venezuela.
But the big news today were the rumors surrounding Yahoo! Inc. (Nasdaq: YHOO). The Wall Street Journal reports that Verizon Communications Inc. (NYSE: VZ) and several other suitors are planning a $2 billion to $3 billion offer for the core Internet business of technology giant. That offer, however, is far lower than Wall Street had anticipated, driving down YHOO stock and offering a blow to activist hedge fund manager Jeffrey Smith at Starboard Value. Shares of YHOO stock were off more than 5% this morning.
Now, let's look at the day's biggest stock movers and the must-own stock for today…
Top Stock Market News Today
- The woes continue in the retail sector. Shares of Gap Inc. (NYSE: GPS) pushed up more than 4.2%, but only due to the news that the firm plans to close 75 Old Navy and Banana Republic stores. The firm said that its same-store sales fell 5% in the first quarter, prompting its effort to save $275 million each year.
- Meanwhile, on the earnings front, shares of Foot Locker (NYSE: FL) fell nearly 5% after the athletic retailer said that same-store sales came in lower than Wall Street expected. The company's earnings report came in line with expectations – as the firm reported an EPS of $1.39 on top of $1.99 billion in revenue.
- The semiconductor industry received a pop today after Applied Materials (Nasdaq: AMAT) offered strong second-quarter earnings results. The firm said that orders topped a 15-year high, while it hiked its guidance outlook for the upcoming quarter. AMAT stock rallied nearly 13% and offered the biggest boost to the S&P 500 on Friday.
- On the deal front, shares of InterOil Corp. (NYSE: IOC) surged more than 37% early this morning on news that it agreed to be purchased by Oil Search Ltd. (ASX: OSH) for an estimated $2.2 billion.
- Finally, here is your stock pick 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.