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The Dow Jones Industrial Average today eked out gains as energy stocks were able to barely hold off a slump from materials stocks.
Shares of Dow component Caterpillar Inc. (NYSE: CAT) weighed down the index after the firm reported a sales decline for July. Meanwhile, shares of Chevron Corp. (NYSE: CVX) added 1.1%, while Exxon Mobil Corp. (NYSE: XOM) gained 0.7%.
Traders were still absorbing details about the minutes released yesterday by the U.S. Federal Reserve from its July policy meeting. The FOMC meeting minutes suggested an interest rate increase is possible as early as September. But with voting members decidedly divided, a hike next month looks highly unlikely. Here's more on the timing of the next possible interest rate hike.
Meanwhile, volatility is simply nowhere to be found in the markets right now. The CBOE Volatility Index (VIX) – typically called the markets' fear gauge – fell 4.8% to less than 11.6. The ongoing lack of volatility is a challenging environment for many traders – mainly because they are following the wrong strategy. That's why Options Trading Specialist Tom Gentile offers investors insight on what they might be doing wrong even though the markets are back near record highs.
Let's look at the final numbers on Thursday for the Dow, S&P 500, and Nasdaq:
Dow Jones: 18,597.70; 23.76; 0.13%
S&P 500: 2,187.02; 4.80; 0.22%
Nasdaq: 5,240.15; 11.49; 0.22%
Here's a look at today's most important market events and stocks, plus a preview of tomorrow's economic calendar.
DJIA Today: Dow Ekes Out Gains; Oil Prices Rise on Production Freeze Hopes
The Dow added 23 points on Thursday during a busy day of earnings reports and speculation about the Federal Reserve's next move. In earnings news, Wal-Mart Stores Inc. (NYSE: WMT) gained 1.9% after topping Wall Street quarterly expectations. Domestic store sales increased for the eighth straight quarter.
Traders continue to follow the Federal Reserve like a dog with its tongue hanging out. Though the central bank has teased another interest rate hike since December 2015, the headlines continue to buzz about the next rate hike's timing. Though the U.S. economy has seen improving labor conditions (or has it?), many economists are concerned that inflation levels remain too low. One thing is certain: The low-interest rate environment continues to punish anyone with a savings account in a bank. Here's Money Morning Capital Wave Strategist Shah Gilani on how the Fed's policies are crushing the economy and hurting your retirement plans.
Crude oil prices were rising again today as speculation grows that global producers could agree to freeze production. The West Texas Intermediate (WTI) crude oil price today was up nearly 3%, while the Brent crude oil price added 1.8%.
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Any agreement between OPEC and other producers would help support prices and reduce the ongoing financial burden that cheap crude is having on producers around the globe. Oil prices were back at a seven-month high. Despite the optimism, Money Morning Global Energy Strategist Dr. Kent Moors believes the September OPEC meeting will also end without a change in output. Here's what you need to know about OPEC, the production freeze, and the real country that will have most impact on crude prices in the second half of 2016.
In other commodity news, silver prices added more than 0.5% today as traders speculate that the Fed isn't poised to raise rates in the near term. With the dollar sliding against international currencies, the silver price ticked higher. The metal has fallen more than 3% in August, but our latest silver price prediction shows a climb before 2017. You can check it out, right here.
Now, let's look at the stocks you need to know about today…
Top Stock Market News Today, Aug. 18, 2016
- Shares of Twitter Inc. (NYSE: TWTR) were off more than 5.5% after the micro-blogging giant received a downgrade from research firm Evercore. The analysts issued a "Sell" rating due to rising competitive concerns. Evercore cited Snapchat's recent shift toward monetizing its own service. The news comes on the same day that the company suspended more than 235,000 accounts. The firm says that these accounts have been promoting radical extremism around the globe. TWTR stock has long been a short target of Money Morning Chief Investment Strategist Keith Fitz-Gerald. And while many Wall Street traders are speculating that TWTR is a ripe takeover target, Keith advises that investors proceed with caution on such speculation. Here's his latest TWTR insight.
- Shares of Cisco Systems Inc. (Nasdaq: CSCO) fell more than 1.4% in pre-market hours after the company reported earnings after the bell on Wednesday. Though the company topped earnings and revenue expectations, the markets are reacting negatively to a large round of layoffs at the tech firm. Cisco announced plans to slash around 5,500 positions in the company, a figure that represents about 7% of its employees.
- Shares of Valeant Pharmaceuticals International Inc. (NYSE: VRX) were off more than 3.1% after the company announced that it will be working with its lenders to revise its debt terms. The company has been rallying in recent weeks and even received a stock upgrade from investment firm Morgan Stanley. But Money Morning Global Credit Strategist Michael Lewitt says that the company's debt problems are much worse than Wall Street would have you believe. Be sure to read Michael's warning before you consider any move on VRX stock. Read it, right here.
Tomorrow's U.S. Economic Calendar (all times EDT)
- Baker Hughes Inc. (NYSE: BHI) Rig Count at 1 p.m.
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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.