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The Dow Jones Industrial Average slid this afternoon after traders reacted negatively to an announcement by the European Central Bank.
The ECB said it will leave its benchmark interest rate unchanged and that it anticipates low rates to remain for an "extended period."
Investors also weighed a stock downgrade of one of the market's most iconic technology companies.
Let's look at the final numbers on Thursday for the Dow, S&P 500, and Nasdaq:
Dow Jones: 18,479.91; -46.23; -0.25%
S&P 500: 2,181.30; -4.86; -0.22%
Nasdaq: 5,259.48; -24.44; -0.46%
Here's a look at today's most important market events and stocks, plus a preview of tomorrow's economic calendar.
DJIA Today: Oil Price Surge Can't Offset Reaction to AAPL Stock Downgrade
The Dow Jones slipped more than 46 points as investors continue to weigh the timing of the next interest rate hike by the U.S. Federal Reserve. Investors are speculating on the possibility of a September Federal Reserve rate hike. The next FOMC meeting will take place on Sept. 20 and Sept. 21. So, will a September rate hike happen? We answer that question, right here.
Oil prices surged this afternoon after the U.S. government reported a massive drawdown in crude inventories due to tropical storm Hermine. The Energy Information Administration announced that U.S. inventory levels fell by 14.5 million barrels last week. That is the single largest weekly decline in crude stocks since January 1999. The WTI crude oil price today gained 4.3%. Meanwhile, the Brent crude oil price added 3.8%. Energy stocks rallied on the price boost. Shares of Chevron Corp. (NYSE: CVX) and Exxon Mobil Corp. (NYSE: XOM) both gained more than 1.1% on the day.
Meanwhile, traders were weighing a statement by Iranian energy officials that the nation plans to increase output in the months ahead. That statement is a blow to the planned cooperation by Saudi Arabia and Russian energy officials. OPEC will meet later this month in Algeria to discuss a possible production freeze. However, for the last few months, Money Morning Global Energy Strategist Dr. Kent Moors has explained that ongoing politics between Iran and Saudi Arabia are the biggest obstacle to any deal getting done. In fact, Kent expects that no accord will be struck this month. Here's Kent's latest insight on crude oil prices and what OPEC will do next.
But the big news today was the very public downgrade of Apple Inc. (Nasdaq: AAPL) by one of Wall Street's top investment banks. This morning, Wells Fargo & Co. (NYSE: WFC) downgraded AAPL stock after it reevaluated the risks and rewards of the company moving forward. The announcement comes a day after Apple unveiled the iPhone 7, the iPhone 7 Plus, and the Apple Watch 2. Shares fell more than 2.6% after the WFC downgrade of AAPL stock. [Editor's Note: Despite what Wells Fargo said today, we believe that Apple stock is an absolute bargain at $105.50. Here's why we rank AAPL stock a "Buy."]
Top Stock Market News Today, Sept. 8, 2016
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- Even though Twitter Inc. (NYSE: TWTR) has 100 different problems, the company announced today that it was unveiling emojis for every NFL team this football season. Wall Street was less than impressed by the decision, as the stock fell by more than 5.7% on the day. The stock is under pressure on news that CEO Jack Dorsey is facing increased scrutiny from shareholders. According to various reports, the firm's leaders met today to explore strategic alternatives, which include a possible sale, a turnaround strategy, and/or the replacement of its CEO. Anyone who is laid off can take satisfaction in knowing they can tweet during NFL games with these new emojis.
- Shares of Tesla Motors Inc. (Nasdaq: TSLA) fell more than 1.6% after investment analysts at Cowen and Company initiated coverage on the company and issued a rating of "Underperform." Cowen set a price target for the stock at $160 per share on concerns that the company will face new pressures as it prepares to initiate the second master plan of CEO Elon Musk. [Editor's Note: Despite the downturn, we're bullish on TSLA stock over the long term. Here's our latest insight on where Tesla goes from here.]
- Meanwhile, shares of Priceline Group Inc. (Nasdaq: PCLN) eked out gains after announcing a significant change to its online pricing platform. The firm will no longer permit customers to name their own price on airlines. The company will allow users to bid on hotel rooms and rental vehicles. Still, this is a sharp departure from the company's past strategy.
- Shares of Chipotle Mexican Grill Inc. (NYSE: CMG) gained more than 5% on news that activist investor Bill Ackman has taken a 9.9% stake in the company. Ackman says that the casual restaurant's stock is undervalued and that he plans to meet with its board of directors to shake things up. But we're not buying into the hype surrounding the Chipotle stock price today. [Editor's Note: Here's why we recommend investors avoid this stock.]
- On the earnings front, shares of Barnes & Noble Inc. (NYSE: BKS) fell more than 4.1% after the firm reported a sharp decline in second-quarter retail sales. The firm also said that its Nook sales fell by nearly 25%. It doesn't get any better in the future, either. The firm projected a decline in same-store sales for its upcoming fiscal year, its guidance falling short of Wall Street expectations.
- After the bell, look for earnings reports from Restoration Hardware Holdings Inc. (NYSE: RH), Zumiez Inc. (Nasdaq: ZUMZ), Finisar Corp. (Nasdaq: FNSR), and Korn/Ferry International (NYSE: KFY).
Friday's U.S. Economic Calendar (all times EDT)
- Boston Federal Reserve Bank President Eric Rosengren speaks at 7:45 a.m.
- Federal Reserve Bank of Dallas President Rob Kaplan speaks at 9:30 a.m.
- Baker Hughes Rig Count at 1 p.m.
- Federal Reserve Bank of Dallas President Rob Kaplan speaks at 8:15 p.m.
About the Author
Garrett Baldwin is a globally recognized research economist, financial writer, consultant, and political risk analyst with decades of trading experience and degrees in economics, cybersecurity, and business from Johns Hopkins, Purdue, Indiana University, and Northwestern.