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This morning, the Dow Jones Industrial Average slid as investors continue to weigh the latest round of earnings and OPEC's November meeting.
There are also concerns about the ongoing departure of Britain from the European Union (the Brexit) slowing down global economic growth.
Despite the downturn, the big news in yesterday's session was the stock rally of American Express Co. (NYSE: AXP). Shares of the credit card giant rallied more than 9% after the company easily beat earnings expectations.
On Thursday, the Dow Jones slipped 40 points after a sharp decline in telecommunications stocks and energy stocks. Telecom stocks plunged after Verizon Communications Inc. (NYSE: VZ) reported weaker than expected earnings.
Thursday's Stock Market Numbers:
Dow Jones: 18,162.35; -40.27; -0.22%
S&P 500: 2,141.34; -2.95; -0.14%
Nasdaq: 5,241.83; -4.58; -0.09%
What's Ahead for the Dow Jones Industrial Average Today
The Dow Jones Industrial Average projected a 45-point loss in pre-market hours as oil prices fell thanks to an increasingly strong U.S. dollar. Concerns about the British sterling and the ongoing Brexit fueled a flight to the U.S. dollar.
Oil prices were sliding this morning as investors continue to speculate on the future success of OPEC's production cuts. The WTI crude oil price today fell 0.5%, while the Brent crude oil price dipped 0.4%.
But the big story in pre-market hours is the huge merger speculation posted in a report by Bloomberg. According to a report from the news agency, AT&T Inc. (NYSE: T) is in talks to merge with Time Warner Inc. (NYSE: TWX). The owner of DirecTV is aiming at expanding its reach across the country through cable markets. Shares of TWX stock rallied more than 5% in pre-market hours. Meanwhile, the T stock price slipped about 1.8%. The deal would face significant regulatory scrutiny, but it's just the latest sign that firms are looking to megamergers in order to drive growth. Although the markets have been resilient over the last eight years, companies are relying less and less on organic growth and boosting stock prices through mergers, acquisitions, and stock buybacks.
Stocks to Watch Today, Oct. 21, 2016
- Once again, Wells Fargo & Co. (NYSE: WFC) is back in focus. That's because Sen. Elizabeth Warren (D-MA) has the company back in her crosshairs. Warren had a role in pushing former CEO John Stumpf to resign over the company's ongoing fake account scandal. At one point, she even referred to him as "gutless." But Warren isn't done with the "too big to fail" bank. In fact, she's now questioning the integrity of the company's new CEO Timothy Sloan and wants to know if he had any knowledge of the firm's bad incentive schemes. These schemes fueled thousands of former employees to create millions of fake accounts and siphon millions of dollars from the bank's customers. Money Morning Capital Wave Strategist Shah Gilani says that he wasn't surprised by this scandal given the rotten core of Wells Fargo's culture.
- In earnings news, Microsoft Corp. (Nasdaq: MSFT) hit a new all-time high in pre-market hours after the firm easily beat Wall Street earnings expectations on Thursday. Shares of MSFT stock popped more than 6% this morning after the firm reported another surge in demand for its cloud-based computing services. The company reported earnings per share of $0.76, beating consensus expectations of $0.68. Microsoft also reported quarterly revenue of $22.3 billion, a figure that topped Wall Street forecasts by about $600 million.
- Shares of Nintendo Co. Ltd. (OTCMKTS ADR: NTDOY) are on the move the morning after the gaming company unveiled a revolutionary new system. The new gaming console is called Switch. It allows players to enjoy games on both mobile and home consoles. The firm released a trailer for the Switch console on Thursday, and it's gaining a ton of interest from investors.
- Look for additional earnings reports from McDonald's Corp. (NYSE: MCD), General Electric Co. (NYSE: GE), Honeywell International Inc. (NYSE: HON), Royal Caribbean Cruises Ltd. (NYSE: RCL), Moody's Corp. (NYSE: MCO), and SunTrust Banks Inc. (NYSE: STI).
Today's U.S. Economic Calendar (all times EDT)
- Federal Reserve Governor Daniel Tarullo speaks at 10:15 a.m.
- Baker Hughes Inc. (NYSE: BHI) Rig Count at 1 p.m.
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.