DJIA Index Rallies Triple Digits Ahead of Fed Meeting

The DJIA Index surged 228 points Monday, a day ahead of the Federal Open Market Committee's second meeting of the year. The cause? A weakening dollar abated concerns about its impact on corporate earnings abroad.

Today our Chief Investment Strategist Keith Fitz-Gerald joined FOX Business' "Varney & Co." to give his take on Elon Musk's tweet about Tesla Motors Inc. (Nasdaq: TSLA) and where he thinks TSLA stock is headed next...
Today's Scorecard:

Dow: 17,997.42, +228.11, +1.29%  

S&P 500: 2,081.19, +27.79, +1.35%

Nasdaq: 4,929.51, +57.75, +1.19% 

What Moved the Markets Today: U.S. manufacturing output slipped last month for the third consecutive period, a sign the economy grew slower than expected in the first quarter. The worrisome data will likely affect tomorrow's Fed meeting on monetary policy, but may encourage the broader markets that interest rates will not be raised for some time.

Oil prices were again the big story today, as both WTI crude and Brent crude slid on oversupply concerns and news of progress between the United States and Iran on their nuclear program talks. Any deal would end economic sanctions and allow more oil to flow to the international markets. Brent crude, priced in London, slipped 2.6% to $53.23 per barrel. WTI crude, marked in New York City, fell 3.4% to settle at $43.35 per barrel, a six-year low.

Now, check out the other top market stories - plus get our new profit tip for investors:

  • You're Out of Here: Today's largest percentage decliner on the S&P 500 was Avon Products Inc. (NYSE: AVP). Shares fell 5.7% this afternoon on news that the company will be removed from the S&P 500 by the S&P Dow Jones Indices. Avon will be replaced by apparel maker Hanesbrands Inc. (NYSE: HBI) after the close of March 20. Shares of HBI rose more than 3.4% on the news.
  • Downgraded: Shares of Netflix Inc. (Nadsaq: NFLX) slipped nearly 4% after the company received a price downgrade from Evercore ISI. The bank slashed its price target from $450 to $380. Evercore justified the downgrade on rising competition in the streaming video space. The firm says Netflix will need to invest significantly to expand its audience and that international growth will offer some very steep challenges in the years ahead.

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  • Going Private: Shares of Life Time Fitness Inc. (NYSE: LTM) surged more than 5% on news that private-equity firm TPG and Leonard Green & Partners plan to take the company private. According to terms of the deal, the private equity firm will purchase the fitness company for $2.8 billion. Life Time Fitness operates 114 large gyms across the United States and Canada.
  • Tweeting Tales: Shares of Tesla Motors Inc. (Nasdaq: TSLA) jumped 3.72% on the day. Its CEO said on Twitter that the company is about "to end range anxiety" about electric vehicles. The stock also rose after it denied reports that it plans to slash its salesforce in China.
  • Biotech Boom: Shares of Valeant Pharmaceuticals International Inc. (NYSE: VRX) gained 2.49% this afternoon on news it raised its buyout offer for Salix Pharmaceuticals Ltd. (Nasdaq: SLXP) to $10.96 billion. Salix accepted the $173 per share offer, effectively knocking Valeant rival Endo International Plc. (Nasdaq: ENDP) out of the bidding process. Shares of Salix were up nearly 2% on the day.
  • An Apple a Day: Shares of Apple Inc. (Nasdaq: AAPL) were up 1.1% this afternoon on news that the company expects to top sales of 54 million iPhone units in the second quarter, according to projections from Morgan Stanley (NYSE: MS) and Barclays Plc. (NYSE ADR: BCS). That is a 24% increase over the same period last year.

Money Morning Tip of the Day: Don't let Dow Jones changes dictate your stock decisions. Getting dumped from the Dow is not always as bad as it sounds.

Most of the mainstream financial media is frothing over what Apple Inc. (Nasdaq: AAPL) will do for the Dow Jones Industrial Average. It will replace AT&T Inc. (NYSE: T) on the index March 18.

But a look at how Dow stocks do after changes to the index shows us that AT&T is headed for a rise.

You see, when you compare the performance of previous Dow Jones rejects with the stocks that replaced them, on average the rejects come out ahead.

A 2008 Pomona College study looked at this effect using data from 1928 to the end of 2005.

They found that Dow Jones rejects collectively gained 175% in the five years after they were removed from the index, while new members gained just 65%.

What's behind this?

At work here is a basic statistical phenomenon called regression to the mean. A series of unusually high or low measurements will over time move closer to the average.

"Regression to the mean suggests that companies taken out of the Dow may not be as bad as their current predicament indicates and the companies that replace them may not be as terrific as their current record suggests," the Pomona study says.

The weight of the evidence means Dow rejects don't have to be dumped for your portfolio - subject to due diligence, of course.

To read more about what happens to stocks when they are added to or removed from the Dow, go here: Don't Dump Dow Jones Industrial Average Stocks Just Because the Index Did