The Dow Jones Industrial Average today slipped after a downturn in healthcare and energy stocks.
Despite several positive earnings reports and a slate of merger proposals, the S&P 500 dipped on the day.
Let's look at the final numbers on Friday for the Dow, S&P 500, and Nasdaq:
Dow Jones: 18,145.57; -16.78; -0.09%
S&P 500: 2,141.15; -0.19; -0.01%
Nasdaq: 5,257.40; 15.57; 0.30%
Now, here's a look at today's most important market events and stocks, plus a preview of Friday's economic calendar.
DJIA Today: Markets Slide as New York Fed Cuts Growth Expectations
The Dow Jones fell 16 points on a choppy day of trading. Concerns about the U.S. economy emerged again today after the New York Federal Reserve downgraded its forecasts for GDP growth during the second half of 2016. The NY Fed cut its Q3 GDP expectation from 2.3% to 2.22%, while it slashed its Q4 GDP growth rate from 1.56% to 1.4%.
On the global front, the Chinese yuan slumped to a six-year low against the U.S. dollar. Markets are increasingly worried about the flight of capital from the yuan into other currencies. The dollar continues to climb as markets increasingly anticipate that the Federal Reserve will hike interest rates in December. The rising dollar hit a seven-month high and battered gold prices and silver prices in recent weeks.
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How much is the price of silver right now? Find that answer, right here.
The price of crude oil today ticked higher after Russian energy officials reiterated their support to join OPEC in its efforts to cap production and support crude prices. Still, a rising U.S. dollar limited gains from the news. In addition, Baker Hughes Inc. (NYSE: BHI) announced its weekly rig count and said that the number of platforms increased for the eighth consecutive week. The WTI crude oil price today added 0.4%, while the Brent crude oil price gained 0.7%.
Crude prices experienced their fifth-straight weekly gain.
But the big story today was news that AT&T Corp. (NYSE: T) has engaged in advanced talks to purchase Time Warner Inc. (NYSE: TWX). Shares of TWX rallied nearly 9.5% on the news, although doubts have already spread. 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.
Top Stock Market News Today, Oct. 21, 2016
- In other deal news, shares of Reynolds American Inc. (NYSE: RAI) rallied more than 13% on news that cigarette giant British American Tobacco Plc. (NYSEMKT: BTI) has made a $47 billion offer to purchase the 58% of the company that it doesn't currently own. Shares of BTI stock fell more than 7% on the news.
- Shares of Microsoft Corp. (Nasdaq: MSFT) hit an all-time high. The stock rallied more than 5% after the company topped Wall Street earnings expectations on Thursday. 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 General Electric Co. (NYSE: GE) fell more than 1.6% after the firm slashed its quarterly forecast. The company beat analysts' earnings-per-share (EPS) expectations by $0.01; however, the company fell short of revenue expectations.
- Shares of McDonald's Corp. (NYSE: MCD) also reported strong earnings in pre-market hours on Friday. Shares gained more than 3% after the fast-food giant reported per-share earnings of $1.62 on top of $6.42 billion in revenue. Wall Street expected an EPS of $1.48 on top of $6.29 billion.
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Tuesday's U.S. Economic Calendar (all times EDT)
- Chicago Fed National Activity Index at 8:30 a.m.
- Louis Federal Reserve Bank President James Bullard speaks at 9:05 a.m.
- PMI Manufacturing Index Flash at 9:45 a.m.
- 4-Week Bill Announcement at 11 a.m.
- 3-Month Bill Auction at 11:30 a.m.
- 6-Month Bill Auction at 11:30 a.m.
- Chicago Federal Reserve President Charles Evans speaks at 1:30 p.m.
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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.