Dow Jones Today Stages Recovery as Italian Political Fears Continue to Shake Markets

The Dow Jones today rose 110 points as investors took stock after yesterday's broad sell-off. On Tuesday, the Dow dropped 391 points after the Italian Parliament failed to form a coalition government over the weekend. Italy, Europe's third-largest economy and eighth-largest globally, has faced increasingly volatile economic conditions in recent years as the nation's embrace of the single European market and common currency has cooled.

Markets are also reacting to reports that the White House intends to move forward with tariffs on roughly $50 billion of Chinese goods. The development comes on the heels of an announcement made by U.S. Treasury Secretary Steven Mnuchin, in which he stated that further trade sanctions against China would be put on hold.

Here are the numbers from Tuesday for the Dow, S&P 500, and Nasdaq:

Index Previous Close Point Change Percentage Change
Dow Jones 24,361.45 -391.64 -1.58%
S&P 500 2,689.86 -31.47 -1.16%
Nasdaq 7,396.59 -37.26 -0.50%

Now here's a closer look at today's Money Morning insight, the most important market events, and stocks to watch.

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The Top Stock Market Stories for Wednesday

  • The euro fell to a 10-month low Tuesday night as concerns about geopolitical problems in Italy and Spain rattled global markets. A sharp rise in Italian borrowing costs fueled a surge of investors piling into safe-haven assets like the U.S. dollar and gold. Today, Italy is going to test its financial resilience by attempting to sell about $7 billion in bonds to the global markets. Recent political instability has rattled investor confidence in the euro and several other countries within the European Union that face uncertain political and economic futures.

dow jones industrial average

  • On Tuesday, the Trump administration said it would press ahead with 25% tariffs on roughly $50 billion in Chinese goods. As U.S. Trade Secretary Wilbur Ross prepares to head to Beijing to discuss trade this week, the Trump administration is demanding that China address ongoing theft of U.S. intellectual property.
  • Ahead of Friday's jobs report, Automatic Data Processing (NYSE: ADP) reported that private jobs increased by 178,000 during May. That figure was actually 12,000 behind what the markets were anticipating. Job growth appears to be slowing down as the firm also revised its jobs figure for April downward, from 204,000 new positions to 163,000.

Three Stocks to Watch Today: KORS, HP, KMI

  • Michael Kors Holdings Ltd. (NYSE: KORS) stock was off 3.2% in pre-market hours after the company reported earnings before the bell. The luxury retailer reported earnings per share (EPS) of $0.63, a figure that topped Wall Street expectations of $0.60. The firm also beat revenue expectations and reported an increase in same-store sales. However, the firm's earnings forecast for the year ahead came in lower than expectations, a factor that pushed its stock lower on Wednesday morning.
  • Shares of HP Inc. (NYSE: HP) were up slightly after the company raised its full-year outlook and topped Wall Street earnings expectations on Tuesday. The company cited stronger demand in desktops and notebooks for its financial performance. The firm matched EPS expectations of $0.48. However, revenue came in at $14.0 billion, a figure that easily beat forecasts of $13.59.
  • The Canadian government announced plans to purchase the Trans Mountain pipeline from Kinder Morgan Canada Ltd. (NYSE: KML) for $3.5 billion. The Canadian government said that the deal was the only way to ensure that the long-awaited project could proceed. The pipeline runs from the Alberta oil sands to a port all the way in British Columbia along the Pacific Ocean. The pipeline is designed to give Canadian crude greater access to international markets and to help press prices higher.
  • Look for additional earnings reports from Dick's Sporting Goods Inc. (NYSE: DKS), Box Inc. (NYSE: BOX), Analog Devices Inc. (NYSE: ADI), DSW Inc. (NYSE: DSW), PVH Corp. (NYSE: PVH), Guess? Inc. (NYSE: GES), and Movado Group Inc. (NYSE: MOV).

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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.

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