Dow Jones Industrial Average Pulls Back from Record Highs as Rising Interest Rates Rattle Investors

The Dow Jones Industrial Average fell over 80 points this morning as rising interest rates upset investor sentiment. Interest rates are pushing higher around the globe, increasing borrowing costs in a world already swimming in debt.

This morning, the 10-year Treasury bond hit its highest level since July 2011. The 30-year bond is at its highest rate since October 2014. Investors anticipate that the U.S. Federal Reserve will raise interest rates at least one more time in 2018.

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

Index Previous Close Point Change Percentage Change
Dow Jones 26,828.39 54.45   0.20%
S&P 500 2,925.51 2.08     0.07%
Nasdaq 8,025.09 25.54   0.32%

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

The Top Stock Market Stories for Thursday

  • Positive economic data pressed the 10-year Treasury bond to its highest levels in seven years. Hiring data published yesterday topped expectations, and the markets believe that Friday's official jobs report will see unemployment fall and wage growth increase. On Wednesday, ADP reported that private payrolls increased by 230,000 last month, a figure that shattered consensus expectations of 168,000.
  • The Irish Data Protection Commission has launched a probe into a hack of Facebook Inc. (NASDAQ: FB) that breach affected up to 50 million accounts. Facebook could potentially have to pay a $1.6 billion fine should the commission rule that it failed to safeguard user information.
  • dow jones industrial averageAs we reported on Monday, General Electric Co. (NYSE: GE) announced that its CEO John Flannery will be stepping down. The announcement brings a tumultuous year for him at the helm to a close. Yesterday, Money Morning Associate Editor Alexander Bird dug under the hood of General Electric and Flannery's tenure. The outcome: GE's financial problems are even worse than you can imagine. Here's what you need to know about GE stock and how you can profit from the company's announcement.

Stocks to Watch Today: STZ, AMZN, BKS

  • Constellation Brands Inc. (NYSE: STZ) leads today's list of companies reporting earnings. The spirits giant reported earnings per share of $2.87 on top of $2.30 billion in revenue. Those figures topped consensus expectations of $2.58 on top of $2.25 billion. The company also announced it had increased its 2019 fiscal guidance.
  • Inc. (NASDAQ: AMZN) is generating some negative press this morning. The e-commerce giant had announced an hourly wage hike for its workers on Tuesday. However, as we dig deeper into the announcement, it turns out that the firm has eliminated monthly bonuses and stock awards from its hourly employees. In addition, Bloomberg is reporting that Chinese equipment manufacturer Super Micro may have allowed microchips that could be used for spying into equipment run in Amazon Web Services. Amazon has denied the report.
  • In deal news, Barnes & Noble Inc. (NYSE: BKS) shares popped 18% on news that the firm is exploring a potential sale. According to reports, the firm has received interest from several parties, including the firm's chair, Leonard Riggio, who developed Barnes & Noble's modern franchise in 1971. Shares of BKS stock had been off about 18% since January as the firm continues to struggle against Amazon and faces a difficult retail environment.
  • Look for other earnings reports from Costco Wholesale Corp. (NASDAQ: COST), International Speedway Corp. (NASDAQ: ISCA), and Sky Solar Holdings Ltd. (NASDAQ: SKYS)

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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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