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The Dow Jones Industrial Average closed at another record level on Tuesday despite a string of weak earnings reports and new concerns about global economic growth.
Even blue-chip companies that beat expectations slid on the day as the reality of Wall Street's underwhelming expectations set in. For quite some time Wall Street analysts have lowered expectations of company performance, only to see a stock rally after beating these weakened expectations.
While earnings figures dominated Tuesday discussions on trading floors in New York and Chicago, a number of other stories rattled investor confidence and created a handful of new trading opportunities for the informed. Let's dive into those stories right now.
First, check out the results for the Dow Jones, S&P 500, and Nasdaq:
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Dow Jones: 18,559.01; +25.96; +0.14%
S&P 500: 2,163.78; -3.11; -0.14%
Nasdaq: 5,036.37; -19.41; -0.38%
Now, here's the top stock market news today… and your best ways to profit.
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Brexit was back in the news today after the International Monetary Fund announced that Britain's potential departure from the European Union offered "substantial risk" to the broader world economy. The IMF said that global economic growth would only register at 3.1% in 2016 and 3.4% in 2017. Both of these numbers are downward revisions. The IMF also downwardly revised expected U.S. growth by 0.2%, a revision driven by poor performance in the first quarter.
Meanwhile, U.S. regulators are turning their attention to the healthcare sector.
Even though UnitedHealth Group Inc. (NYSE: UNH) beat top- and bottom-line earnings expectations, shares have been weighed down on regulatory concerns for the broader insurance sector. According to reports, antitrust officials at the U.S. Justice Department are working to block mergers between Anthem Inc. (NYSE: ANTM) and Cigna Corp. (NYSE: CI), and Aetna Inc. (NYSE: AET) and Humana Inc. (NYSE: HUM). Shares of these four stocks all fell at least 1.5% on the day.
Goldman Sachs Group Inc. (NYSE: GS) reported its second-quarter earnings today. The investment firm beat Wall Street forecasts with earnings per share of $3.72 and revenue of $7.93 billion. Shares of GS stock still slipped more than 1.5% as the banking system continues to underwhelm. Part of the problem is that these banks are taking on way too much debt and they are still "too big to fail." Money Morning Capital Wave Strategist Shah Gilani believes the big banks could implode before ever being broken up…
Oil prices slipped to their lowest levels since May 9 as markets prepare for tomorrow's weekly crude inventory reports. The U.S. Energy Information Administration will report weekly crude stocks tomorrow afternoon. WTI crude prices were off 1.4%, while Brent crude oil dipped 0.6% ahead of the report.
But the big news today is the Republican National Convention, which continues to generate headlines after a stunning revelation on Monday night. The wife of presumed nominee Donald Trump has been accused of plagiarizing portions of her speech. According to multiple reports, Melania Trump's speech contained a large chunk of text that resembled portions of a previous speech by current first lady Michelle Obama.
Trump is expected to accept the GOP's nomination on the final day of the convention, July 21. More events like this have many people wondering if they should vote Libertarian in the 2016 election. Here's a primer on the Libertarian ticket.
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Now, let's look at the day's biggest stock movers and the best investments in times of global uncertainty.
Top Stock Market News Today
- Shares of Netflix Inc. (Nasdaq: NFLX) fell more than 13% after the video-streaming giant reported a smaller than expected growth figure for expected subscribers after the bell on Monday. The company had expected to add 2.5 million new subscribers in the previous quarter but added just 1.7 million. The company did beat Wall Street's EPS expectations and fell in line with analyst expectations of $2.11 billion in revenue. Read this before you decide to buy NFLX stock.
- Yahoo! Inc. (Nasdaq: YHOO) added 0.5% despite news that the company offered a weak earnings report and very little insight into its strategic alternatives. The positive sentiment has been fueled by a positive report by European bank UBS, which says that the stock has nearly 14% upside in the near term. That's quite a report after the firm saw a 64% decline in quarterly profits and a 15% slide in revenue. Can YHOO stock continue to rise before it sells its assets? We answer that question, right here.
- Yahoo remains in focus as a sale for its assets has attracted the interest of AT&T Inc. (NYSE: T); Verizon Communications Inc. (NYSE: VZ); a group that includes Warren Buffett's Berkshire Hathaway Inc. (NYSE: BRK.A) and Cleveland Cavaliers' owner Dan Gilbert, and private-equity giant TPG.
- Johnson & Johnson (NYSE: JNJ) topped Wall Street earnings expectations and the firm hiked its full-year guidance. JNJ stock is up 1.4% after the company said it's been able to boost profitability despite currency exchange concerns.
- After the bell, also look out for an earnings report from Microsoft Corp. (Nasdaq: MSFT), Intuitive Surgical Inc. (Nasdaq: ISRG), United Continental Holdings Inc. (NYSE: UAL), W.W. Grainger Inc. (NYSE: GWW), and Phillip Morris International Inc. (NYSE: PM).
- Finally, here's your investment of the day. Gold prices were up slightly in the wake of the failed Turkish coup. While there will be a lot of chatter about macroeconomic risk this week, investors need to know about the best way to invest in gold right now. Money Morning Executive Editor Bill Patalon offers the single best gold investment out there today in a conversation with Capital Wave Strategist Shah Gilani. 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.