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The Dow Jones Industrial Average today (Tuesday) jumped more than 225 points after April home sales hit an eight-year high and oil prices rallied as traders anticipate a decline in domestic inventories. Meanwhile, the Nasdaq hit a one-month high, boosted in part by a nearly 3% gain in shares of Microsoft Corp. (NYSE: MSFT).
Here's what else you need to know about the markets on May 24, 2016.
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First up, check out the results for the Dow Jones, S&P 500, and Nasdaq:
Dow Jones: 17,706.05; +213.12; +1.22%
S&P 500: 2,076.06; +28.02; +1.37%
Nasdaq: 4,861.06; +95.27; +2.00%
Now, here's the top stock market news today…
DJIA Today: New Home Sales Hit Eight-Year High, Crude Inventories in Focus
First up, new home sales hit an eight-year high as prices surged in April, offering a boost to the broader economy. The seasonally adjusted annual rate of home sales jumped 16.6% — the fastest pace since 1992. The overall housing market is benefiting from a tight labor market, improving wages, and near record-low mortgage rates.
The rally in new home sales complemented a strong earnings report from construction giant Toll Brothers Inc. (NYSE: TOL). The company announced a more than 30% jump in quarterly revenue thanks to increasing demand. The firm said that it sold a little more than 1,300 homes in the first quarter at an average price of $855,500. TOL stock added nearly 8% on the day.
Crude oil prices pushed closer to $50 per barrel as traders anticipate a drawdown in domestic inventories. The American Petroleum Institute (API) is expected to announce a decline in U.S. crude stocks after the bell, but ahead of tomorrow's official report from the U.S. Energy Information Administration. WTI crude prices gained more than 1.2%.
Brent crude added 0.7% as Iraq's ongoing infrastructure problems fueled a slight downturn in its daily production. Traders are eyeing the ongoing soap opera involving OPEC, as the global oil cartel attempts to build support for a production freeze in order to support crude prices. Iran announced ahead of a key meeting among oil producers that it will not participate in any production freeze, a statement that has raised the stakes in its ongoing rivalry with Saudi Arabia.
Financial stocks rallied again today as sentiment grows for a possible interest rate hike in either June or July. Shares of Bank of America Corp. (NYSE: BAC) and JPMorgan Chase & Co. (NYSE: JPM) both pushed up more than 1.5%. Meanwhile, Citigroup Inc. (NYSE: C) added more than 2% on the day. It was just last week that CME FedWatch projected just a 4% probability of an interest rate hike during the June 14-15 FOMC meeting. Today, that probability has increased to roughly 39%. Investors will keep an eye on a speech from Fed Chair Janet Yellen on Friday.
Yesterday, Philadelphia Federal Reserve Bank President Patrick Harker suggested the central bank could hike short-term interest rates up to three times this year if the economy continues to show signs of recovery.
But the big news today was on the deal front. Shares of Monsanto Co. (NYSE: MON) were up nearly 3% after the firm rejected a $62 billion offer from German drug and chemical maker Bayer AG (OTCMKTS ADR: BAYRY). The global seed manufacturer said that it will seek a higher price and continue negotiations on behalf of shareholders. Analysts expect that such a deal could receive regulatory approval. MON stock added more than 2.7%.
Now, let's look at the day's biggest stock movers and the must-own stock for today…
Top Stock Market News Today
- On the earnings front, shares of Best Buy Co. (NYSE: BBY) fell more than 6% after the company reported a weaker than expected profit report. The firm said that its revenue fell by 1.3% last quarter, adding to the existing woes of the domestic retail sector. The firm also announced that its CFO Sharon McCollam will be stepping down in June.
- In deal news, specialty finance company Ares Capital Corp. (Nasdaq: ARCC) agreed to buy smaller rival American Capital Ltd. (Nasdaq: ACAS) in a cash and stock deal valued at $3.4 billion, aiming to capture a bigger share of lending to mid-sized firms as big banks turn cautious.
- Apple Inc. (Nasdaq: AAPL) continued its positive momentum, gaining another 1.5% on Tuesday. AAPL stock has rallied since Warren Buffett's firm Berkshire Hathaway Inc. (NYSE: A) announced a massive stake in the technology giant. In fact, AAPL stock is poised to continue its rally as it turns its attention to India, where its CEO Tim Cook recently traveled to meet with the nation's prime minister.
- Shares of Netflix Inc. (Nasdaq: NFLX) rallied after the firm received a "Buy" rating from European bank UBS AG (NYSE: UBS). The streaming giant announced that – beginning in September – it will be the exclusive in-home source of films from The Walt Disney Co. (NYSE: DIS), Marvel, Lucasfilm, and Pixar. Here's what's next for NFLX stock.
- Shares of Twitter Inc. (NYSE: TWTR) hit a record intraday low after receiving a downgrade from brokerage MoffetNathanson.
- Finally, here is your stock pick of the day. Money Morning Director of Tech & Venture Capital Michael A. Robinson wants to offer you some insight into the explosive growth poised for a $165 billion industry. In just the next few years, we're going to see growth in this technology industry balloon by a stunning 57%. The best part: You can grab your share of this growth with one of the oldest, most stable dividend payers on the market right now…
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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.
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