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The Dow Jones Industrial Average cratered almost 200 points as concerns about the European banking sector weighed on investor sentiment and volatility accelerated in the healthcare sector. Shares of Deutsche Bank AG (USA) (NYSE: DB) hit an all-time low on Thursday as concerns about the company's liquidity and a need for a bailout to pay its $14 billion settlement with the U.S. government. DB stock fell more than 6.7%.
We expect volatility to heat up this month. That's why our list for the best stocks to buy in October 2016 emphasizes quality companies that can survive a volatile market. Before we get started on today's news, check out the three best stocks to buy in October, right here.
Let's look at the final numbers on Thursday for the Dow, S&P 500, and Nasdaq:
Dow Jones 18,143.38; -195.86; -1.07%
S&P 500 2,151. 2; -20.25; -0.93%
Nasdaq 5,269.15; -49.39; -0.93%
Here's a look at today's most important market events and stocks, plus a preview of Friday's economic calendar.
DJIA Today: AAPL Falls, Oil Rises, and DB Stock Hits an All-Time Low
The Dow Jones fell 195 points after APPL stock received a downgrade, shares of DB stock fell to an all-time low, and volatility hammered the healthcare sector. Shares of Mylan NV (Nasdaq: MYL) fell more than 4.3%, while Teva Pharmaceutical Industries Ltd. (NYSE ADR: TEVA) dipped more than 4.9%.
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The U.S. Commerce Department increased its third estimate for third-quarter GDP. The agency said that GDP expanded by a rate of 1.4% over the quarter, up from last month's estimate of 1.1%. In positive news for the U.S. economy, consumer spending expanded by 4.3% in the second quarter. Consumer spending comprises roughly two-thirds of domestic economic activity. Despite the positive uptick in spending and growth, don't expect the data to impact the Federal Reserve's timing of its next interest rate hike.
Federal Reserve Chair Janet Yellen said yesterday that the Fed is likely to raise rates by the end of the year, but that the central bank was keeping a close eye on inflation. Yellen is set to give a speech later today on monetary policy. Meanwhile, both Kansas City Fed President Esther George and Atlanta Fed president Dennis Lockhart called for a rate hike on Thursday.
The price of crude oil today increased on news of a deal among OPEC suppliers to cap November production in order to support crude levels. This is the global oil cartel's first production deal since 2008, although details remain slightly hazy right now. Overall, OPEC will slash production to roughly 32 million to 33 million barrels per day. As a result, oil prices have been surging this week. Here's why.
The WTI crude oil price today gained 1.3%. Meanwhile, the Brent crude oil price added 0.7%.
But the big news today was happening in Washington, D.C. On Thursday, Wells Fargo & Co. (NYSE: WFC) CEO John Stumpf was grilled by the House Financial Services Committee over a massive scam that has knocked $20 billion off the firm's market capitalization. Stumpf has forfeited more than $41 million in bonus money and other compensation after the company created millions of fake accounts and bilked its customers out of money.
The company is also facing sanctions from the Justice Department over claims that the bank improperly repossessed cars owned by military families.
As Money Morning Capital Wave Strategist Shah Gilani explains, the real Wells Fargo scam is a reckless "do whatever it takes" culture that no one stopped.
Top Stock Market News Today, Sept. 29, 2016
- ConAgra Foods Inc. (NYSE: CAG) was the top-performing stock on the S&P 500 this afternoon. Shares popped 7.1% after the firm topped Wall Street profit expectations. In other earnings news, PepsiCo Inc. (NYSE: PEP) added 0.7% after it topped profit and revenue expectations, and hiked its full-year outlook. After the bell, look out for earnings reports from Costco Wholesale Corp. (Nasdaq: COST).
- Shares of Apple Inc. (Nasdaq: AAPL) fell more than 1.2% after the company received a stock downgrade from European investment firm Barclays Plc. (NYSE: BCS). The bank removed the tech giant from its "top picks" list and slashed its share-price target to $114.
- Shares of eBay Inc. (Nasdaq: EBAY) gained more than 1.5% after the firm received a "Buy" rating and price upgrade from German bank Deutsche Bank AG (USA) (NYSE: DB). The bank set a target of $40 per share, implying a possible 25% upside.
- In biotech news, shares of Intra-Cellular Therapies Inc. (Nasdaq: ITCI) cratered more than 63% after the firm announced negative results from its recent schizophrenia drug trial. The firm said the drug failed to show clinically significant results.
- In dividend news, McDonald's Corp. (NYSE: MCD) announced that it will increase its quarterly payout by 6%. That's a quarterly return of $0.94 moving forward. The firm has hiked its dividend for 40 consecutive years.
Friday's U.S. Economic Calendar (all times EDT)
- Personal Income and Outlays at 8:30 a.m.
- Chicago PMI at 9:45 a.m.
- Consumer Sentiment at 10 a.m.
- Baker Hughes Rig Count at 1 p.m.
- Dallas Federal Reserve President Rob Kaplan speaks 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.