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The Dow Jones Industrial Average today snapped a nine-session winning streak, slumping after weaker earnings, falling oil prices, and a short-term end to the global sugar high of falling interest rates and more stimulus.
The markets got off to a rocky start after the European Central Bank said it will not slash interest rates this month. The ECB will keep its key rate at 0% and its savings deposit rate at -0.40%. That means that anyone with a savings account must pay banks money to store their cash in their vaults.
Meanwhile, the Bank of Japan isn't quite ready to throw the full kitchen sink at its ongoing liquidity trap. Japanese central bank governor Haruhiko Kuroda said that he's ruling out "helicopter money" to boost inflation and growth in the world's third-largest economy.
Money Morning Capital Wave Strategist Shah Gilani continues to argue that two central bank lies and misdirection could trigger a market crash.
Today was a wild day on Wall Street, and investors might have missed several profit opportunities if they weren't paying attention. We'll get to them in a moment.
First, check out the results for the Dow Jones, S&P 500, and Nasdaq:
Dow Jones: 18,517.23; -77.80; -0.42%
S&P 500: 2,165.17; -7.85; -0.36%
Nasdaq: 5,073.90; -16.03; -0.31%
Now, here's the top stock market news today… and your best ways to profit.
DJIA Today: Intel Slumps, Airline Stocks Crater, and Oil Prices Fall Thursday
The Dow Jones dropped more than 77 points, while the Nasdaq shaved more than 16 points off after Intel Corp. (Nasdaq: INTC) reported weaker than expected earnings and fell more than 4% on the day. Markets also didn't care for the lack of stimulus from global central banks.
On the earnings front, shares of Southwest Airlines Co. (NYSE: LUV) fell 11% after the firm missed earnings and revenue expectations. The firm also lowered its forward outlook, prompting a sharp sell-off of airlines stocks. Shares of American Airlines Group Inc. (Nasdaq: AAL) fell nearly 3%, Delta Air Lines Inc. (NYSE: DAL) dipped 4.3%, and United Continental Holdings Inc. (NYSE: UAL) fell 3.7%.
Oil prices were sliding on Thursday afternoon after reports of a significant build in gasoline inventory around the United States. The report comes just a day after the U.S. Energy Information Administration reported the ninth-straight weekly decline in crude inventories.
WTI crude oil prices were off 2.4%, while Brent crude oil prices fell 2.3%. Money Morning Global Energy Strategist Dr. Kent Moors argues that sliding oil prices are setting up a profitable investment opportunity for the long term. Here's how Moors says investors should trade oil right now.
The Republican National Convention concludes on Thursday night with Donald Trump set to accept the nomination for president from the GOP. The party also nominated Indiana Gov. Mike Pence for vice president. But this latter nomination could be a problem for the GOP. In fact, Pence's nomination could help propel Democratic front-runner Hillary Clinton into the White House – here's what you need to know.
Now, let's look at the day's biggest stock movers and the best investment strategy for biotech stocks.
Top Stock Market News Today
- The biggest bright side for the markets was in the automotive sector. Shares of General Motors Co. (NYSE: GM) gained 1.9% after the company reported strong second-quarter profits. The firm announced that profits more than doubled last quarter, fueled by strong demand in the United States. The firm also said it had hiked its outlook.
- In deal news, shares of InterOil Corp. (USA) (NYSE: IOC) slipped 0.6% on news it will sell to multinational oil giant Exxon Mobil Corp. (NYSE: XOM) for $2.2 billion. The stock declined after Australian firm Oil Search dropped out of the auction.
- Meanwhile, shares of Joy Global Inc. (NYSE: JOY) rallied more than 19.5% after the company announced plans to sell itself for $2.89 billion. The buyer is Japanese construction machinery firm Komatsu Ltd. (OTCMKTS ADR: KMTUY). With debt, the total value of the deal could be as high as $3.7 billion.
- After the bell, also look out for earnings reports from Starbucks Corp. (Nasdaq: SBUX), Chipotle Mexican Grill Inc. (NYSE: CMG), Visa Inc. (NYSE: V), Pandora Media Inc. (NYSE: P), and AT&T Corp. (NYSE: T).
- Finally, here's your investment strategy of the day. Shares of biotech firm Relypsa Inc. (Nasdaq: RLYP) surged more than 58% today. Why the surge? News just broke that the biotech company will be purchased by Galenica AG (VTX: GALN) for $1.58 billion in cash. Huge gains in the biotech sector like this are a challenge to find, but there's a strategy that we've prepared for our investors. As we explain, investing in biotech stocks comes with increased exposure to market volatility. Here's our advice on how to profit from biotech stocks.
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.