Negative Earnings Reactions, Oil Too Much for Dow Jones Industrial Average

How Valeant Tried to Prove Jim Chanos Wrong

Oct 25, 2016 at 4:28 PM
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The Dow Jones Industrial Average (DJIA) explored both sides of breakeven, as stocks reacted to a mixed bag of blue-chip earnings. However, the day's price action eventually resolved to the downside, pressured by negative earnings reactions for Dow components 3M Co (NYSE:MMM) and Caterpillar Inc (NYSE:CAT). In addition, falling oil prices weighed on stocks, while traders also digested a bigger-than-expected drop in consumer confidence this month and a slight increase in home prices in August. 

Continue reading for more on today's market, including:

The Dow Jones Industrial Average (DJIA -18,169.27) dropped 53.8 points, or 0.3%. Of the 11 Dow winners, Procter & Gamble Co (NYSE:PG) managed the biggest win, gaining 3.4%, while Home Depot Inc (NYSE:HD) shed the most of the 19 decliners, losing 3.5%.

The S&P 500 Index (SPX – 2,143.16) also fell, ending 8.2 points, or 0.4%, lower, while the Nasdaq Composite (COMP – 5,283.40) shed 26.4 points, or 0.5%.

The CBOE Volatility Index (VIX – 13.46) tacked on 0.4 points, or 3.4%.

Closing Indexes Summary October 25
NYSE and Nasdaq Stats October 25


5 Items on Our Radar Today

  1. Low commodity prices and falling demand prompted Caterpillar to cut its full-year sales forecast for the fourth time, warning investors that next year could be more of the same. While CAT stock pulled back as a result, it found support atop the previously resistant $84 level. (Bloomberg)
  2. Google Express, an online order delivery service, has expanded its services to customers in an additional 13 states. With 50 merchant partners, Google Express is Alphabet Inc's (NASDAQ:GOOGL) attempt to compete with Amazon.com, Inc.'s (NASDAQ:AMZN) rapidly expanding delivery service, in a market that is attracting a wealth of competition. (USA Today)
  3. One analyst thinks investors have "underappreciated the impressiveness" of this drugmaker.
  4. MGM Resorts International (NYSE:MGM) option players are hoping on an end-of-week bounce.
  5. The Wall Street rookie attracting big analyst attention.

Corporate Earnings October 25
Unusual Options Activity October 25

Data courtesy of Trade-Alert

Commodities:

December-dated crude futures fell 56 cents, or 1.1%, to $49.96 per barrel -- closing south of the $50 level for the first time in a week -- amid concerns about a possible wrench in plans to curb global output and speculation over rising domestic crude inventories.

December-dated gold gained $9.90, or 0.8%, to $1,273.60 per ounce -- the highest close since Oct. 3 -- as the U.S. dollar retreated from its earlier advance. Additionally, the malleable metal got a boost from elevated demand out of India, as people prepare for this month's celebration of Diwali and Dhanteras.

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