Dow Jones Industrial Average Falls 208 Points on Mixed Earnings

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For Jan. 25, 2016, here’s the top stock market news and stocks to watch based on today’s market moves…

How Did the Stock Market Do Today?dow jones industrial average

Dow Jones: 15,885.22; -208.29; -1.29%

S&P 500: 1,877.08; -29.82; -1.56%

Nasdaq: 4,518.49; -72.69; -1.58%

The Dow Jones Industrial Average fell 208 points today (Monday) as oil prices continued to weigh on the global economy and a slate of mixed earnings reports left traders with a mixed feeling about corporate profitability. Shares of McDonald’s Corp. (NYSE: MCD) hit an all-time intraday high and offered the strongest boost to the Dow Jones after the company reported strong quarterly earnings and a 5% hike in same-store sales. Meanwhile, shares of Halliburton Co. (NYSE: HAL) were the biggest drag as the oil field service giant suffered a weak quarterly report due to falling profitability in the North American energy sector.

The CBOE Volatility Index (VIX) – Wall Street’s fear gauge – jumped 8.4%.

On the economic front, the business activity in Texas continues to worsen. The general business activity index from the Dallas Federal Reserve for January hit a six-year low. The official reading was -34.6 – far below economists’ expectations. A far-reaching slowdown in industrial production complemented an already worsening situation in the energy sector, a core driver of growth in the Fed district. Following the announcement, markets are increasingly focused tomorrow when the Fed Open Market Committee kicks off its first meeting on monetary policy of the year. Following last month’s meeting, during which the central bank raised interest rates for the first time since 2006, investors do not anticipate that Janet Yellen and company will make any changes to policy.

Money Morning Members: Keep reading for more on why the Dow Jones Industrial Average plunged more than 200 points today. For those new to Money Morning, sign up to keep reading – it’s completely free…

Top Stock Market News Today

  • Stock Market Today: All 10 major S&P sectors were in the red this afternoon with energy stocks leading the way. Crude oil prices fell again on concerns of oversupply on the global markets. This morning, Iraq’s oil ministry announced the nation had hiked its December output to all-time highs, while Indonesia’s OPEC governor said he does not expect the world’s largest oil cartel to reduce its record output any time soon. March WTI crude prices fell by 5.8% to settle at $30.34. Meanwhile, Brent crude – priced in London – dipped 5.2% to close at $30.50 per barrel. Shares of Chevron Corp. (NYSE: CVX) and Exxon Mobil Corp. (NYSE: XOM) were off 3.2% and 3.3%, respectively. Shares of ConocoPhillips (NYSE: COP) fell more than 9% after the company announced plans to slash its dividend by 75%. Here’s a thorough recap of oil’s disastrous session today.
  • Tax Inversion Time: The U.S. Treasury Department continues to hit American companies with the third-highest marginal corporate tax rate in the world, which drives companies abroad. The latest tax inversion comes today. Tyco International Plc. (NYSE: TYC) announced plans to merge with Johnson Controls Inc. (NYSE: JCI). The deal will provide Johnson Controls shareholders with 56% of the new firm and roughly $3.9 billion in cash. The new firm would also be headquartered in Ireland, where Tyco currently resides.
  • On Tap Tomorrow: On Tuesday, the Fed Open Market Committee will kick off its first meeting on U.S. monetary policy of the year. Companies set to report quarterly earnings include Apple Inc. (Nasdaq: AAPL), Johnson & Johnson (NYSE: JNJ), VMWare Inc. (NYSE: VMW), Coach Inc. (NYSE: COH), AT&T Inc. (NYSE: T), Procter & Gamble Co. (NYSE: PG), United States Steel Corp. (NYSE: X), and Lockheed Martin Corp. (NYSE: LMT).

Stocks to Watch: TWTR, SF, F, HAL, BHI

  • Stocks to Watch No. 1, TWTR: Shares of Twitter Inc. (NYSE: TWTR) fell 4.6% after CEO Jack Dorsey announced via social media that four leading executives are leaving the company “voluntarily.” The company will also soon announce two new board members in the near term. This is an incredible turnover rate for the social media company, as 13 of the 18 executives that were part of Twitter’s analyst day last year have departed from the company in the last 12 months. The company’s stock also received a downgrade from investment firm Stifel Financial Corp. (NYSE: SF). After today’s loss, here’s what you can expect next from TWTR stock.
  • Stocks to Watch No. 2, F: Shares of Ford Motor Co. (NYSE: F) were off 1.3% on news the U.S. auto manufacturer announced plans to pull out of the Japanese and Indonesian markets. The firm said it sees no logical path to boost sales growth or to sustain long-term profitability. Neither market is considered large by any means, as the firm only sold 6,100 vehicles in Indonesia and 5,000 in Japan last year. However, the decision is part of a broader sign that the automotive market is struggling to find growth in a strong-dollar environment.
  • Stocks to Watch No. 3, HAL: Shares of Halliburton Co. (NYSE: HAL) were off more than 3% after the company announced a loss in the fourth quarter. The firm said it was hurt by a downturn in the global energy sector and falling revenue from its North American business. The company is in the process of purchasing its rival Baker Hughes Inc. (NYSE: BHI) in a deal worth $35 billion. However, the deal is facing an increasing number of regulatory concerns.

What Investors Must Know This Week

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