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In Dow Jones news today, the Dow fell despite a positive round of economic data.
Healthcare stocks led the Dow's decline after President Donald Trump proposed a series of budget cuts in funding for medical research and a massive uptick in regulatory costs for the sector.
According to President Trump's budget, the administration wants to reduce spending at the National Institute of Health by 20%. The budget plan also calls for double the amount of regulatory fees to the U.S. Food and Drug Administration from $1 billion to $2 billion in 2018.
The news sent biotech stocks reeling. The iShares NASDAQ Biotechnology Index (ETF) (Nasdaq: IBB) fell more than 1%. Shares of Biogen Inc. (Nasdaq: BIIB) fell nearly 5% and was one of the largest weights on the Nasdaq, although the Nasdaq did barely finish in positive territory for the day. Meanwhile, shares of AbbVie Inc. (NYSE: ABBV) fell nearly 1% and weighed on the Dow.
Let's look at the numbers from Thursday for the Dow, S&P 500, and Nasdaq:
Dow Jones: 20,934.55; -15.55; -0.07%
S&P 500: 2,381.38; -3.88; -0.16%
Nasdaq: 5,900.76 +0.71; +0.01%
Now, here's a look at today's most important market events and stocks, plus a preview of Friday's economic calendar.
DJIA Today: Dow Drops After President Trump Announces Budget Cuts
The Dow Jones dropped 15 points after President Trump announced his budget cuts. Investors also continue to weigh the U.S. Federal Reserve's decision to increase interest rates.
But while everyone is talking about the Trump budget, the real threat to the post-election rally is happening with the debate over the Affordable Healthcare Act. Markets have roared higher since President Trump teased his new tax plan on Feb. 9, which promised to slash corporate taxes by 25%. But with Congress now racing to replace the Affordable Care Act, Money Morning Capital Wave Strategist Shah Gilani worries that could make investors question whether or not the tax cuts will actually come. Here's Shah's latest insight on what could happen next.
In economic news, U.S. homebuilding increased in January thanks to the construction level of single-family houses increasing to a nine-year high. Meanwhile, the number of Americans filing for unemployment benefits fell sharply. The strength of the labor market was one of the primary reasons why the U.S. central bank proceeded with a rate hike Wednesday.
Crude oil prices fell even though the Energy Information Administration announced a surprise decline in weekly crude inventory levels. The inventory report alleviated many concerns about a global supply glut. In addition, the interest rate hike boosted the value of the dollar, which helped push crude prices downward.
The WTI crude oil price today fell 0.12%, while Brent crude gained 0.8%.
But the big story is the price of gold.
Gold prices added more than 2.1% after economists accused the Federal Reserve of being dovish about its monetary policy. According to the talking heads, Fed Chair Janet Yellen did very little to convince the markets that the central bank had any plans to accelerate the tightening of monetary policy in the months ahead. Gold prices are very sensitive to rising interest rates, as a stronger dollar tends to reduce the value of the precious metal.
Gold prices are expected to continue to rise in the months ahead thanks to a number of outside factors that aren't controlled by U.S. monetary policy. We expect gold prices to hit at least $1,400 by the end of 2017. While that would be a 13.6% gain, Money Morning Resource Specialist Peter Krauth has a way to make 50% -- even 82.1% on rising gold prices.
It all starts with owning some of the top gold mining stocks.
Stock Market News and Top Stocks to Watch Today: March 16, 2017
- Shares of Tesla Inc. (Nasdaq: TSLA) added 2.4% after CEO Elon Musk announced he had purchased $25 million in TSLA common stock. The deal came the same day that the firm reported a $250 million offering of common stock and $750 million in convertible senior notes. The company says that it aims to "strengthen its balance sheet and further reduce any risks associated with the rapid scaling of its business due to the launch of Model 3."
- In earnings news, shares of Oracle Corp. (NYSE: ORCL) gained nearly 6.2% after the cloud-computing giant topped Wall Street earnings and revenue expectations after the bell Thursday. The tech giant reported earnings per share (EPS) of $0.69, a figure that topped Wall Street expectations of $0.62. The firm also reported revenue of $9.274 billion, beating consensus expectations of $9.23 billion.
- After the bell, look for additional earnings reports from Adobe Systems Inc. (Nasdaq: ADBE), Omeros Corp. (Nasdaq: OMER), and MannKind Corp. (Nasdaq: MNKD).
Friday's U.S. Economic Calendar (all times EDT)
- Industrial Production at 9:15 a.m.
- Atlanta Fed Business Inflation Expectations at 10 a.m.
- Consumer Sentiment at 10 a.m.
- Leading Indicators at 10 a.m.
- Baker Hughes 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.