Dow Drops 300 Points on Troubling China Headlines

Oil prices slumped after an EIA report on U.S. crude production

Jan 22, 2019 at 4:29 PM
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The Dow dropped triple digits out of the gate on signs of a slowing global economy. Disappointing housing data here at home and sinking oil prices only added to the risk-off backdrop, with panic-selling setting in on mid-afternoon headlines indicating the U.S. has turned down China's offer to meet ahead of next week's high-level trade talks. However, National Economic Council Director Larry Kudlow denied those reports, helping stocks pare their losses in the final hour of trading. Nevertheless, the Dow was down more than 300 points at the close, with the S&P 500 and Nasdaq also closing sharply lower -- and all three indexes snapping their four-day win streaks.

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

  • Why Ford stock losses could accelerate this week.
  • Citi thinks this healthcare stock will implode.
  • Gap stock was downgraded after this bear signal flashed.
  • Plus, options ran hot on this downgraded Chinese stock; a sinking metals stock; and pre-earnings bears target U.S. Steel.

The Dow Jones Industrial Average (DJI - 24,404.48) was down 462 points at its session low, before paring its loss to 301.9 points, or 1.2%. Twenty-six Dow stocks closed lower, led by a 3.2% plunge for Caterpillar (CAT). McDonald's (MCD) paced the four advancers with its 1.1% gain.

The S&P 500 Index (SPX - 2,632.90) shed 37.8 points, or 1.4%, while the the Nasdaq Composite (IXIC - 7,020.36) gave back 136.9 points, or 1.9%.

The Cboe Volatility Index (VIX - 20.80) jumped 3 points, or 16.9%, for its highest close since Jan. 7.

Closing Indexes Jan 22

NYSE and Nasdaq Jan 22

5 Items on our Radar Today

  1. Stanley Black & Decker (SWK) said it expects its full-year adjusted per-share profit to arrive between $8.45 to $8.65, lower than analysts estimate. And even though the toolmaker reported a fourth-quarter adjusted earnings beat, SWK stock plunged 15.5%. (MarketWatch)
  2. The U.S. Department of Justice said it will seek extradition of Huawei's Chief Financial Officer Meng Wanzhou, claiming the Chinese tech firm violated Iran sanctions. The exec was arrested in Canada in early December. (Reuters)
  3. This downgraded Chinese stock saw heavy options trading.
  4. This aluminum stock took a big hit on a failed M&A efforts.
  5. Analysts and options traders targeted U.S. Steel ahead of earnings.

Corporate Earnings Jan 22

unusual options acvtivity Jan 22

Data courtesy of Trade-Alert

Trade Tensions Boost Gold Prices

Oil prices fell after the Energy Information Administration (EIA) said U.S. crude shale production will rise next month. While February crude settled $1.23, or 2.3%, lower at $52.57 per barrel, March-dated crude -- the now front-month contract -- shed $1.03, or 1.9%, to close at $53.01 per barrel.

Gold prices got a lift from the troubling U.S.-China trade headlines, though a strengthening dollar kept gains in check. February-dated gold added 80 cents to settle at $1,283.40 an ounce.

 

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