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Dow Jones Industrial Average Moving Today Ahead of FOMC Meeting

Money Morning Contributor

For January 26, 2015, here’s the top stock market news and stocks to watch…

dow jones industrial average
Stock Futures Today

Futures for the Dow Jones Industrial Average for today (Tuesday) forecasted a five-point gain ahead of a very busy day of earnings reports and the Federal Reserve’s first meeting of the year. In addition, oil prices pushed above $30 per barrel on hopes that OPEC and non-OPEC members could reach an agreement to reduce the global glut in crude supply.

On Monday, the Dow fell 208 points as oil prices continued to weigh on the global economy and earnings reports left traders with a mixed feeling about corporate profitability. On the economic front, business activity in Texas continues to worsen. The general business activity index from the Dallas Federal Reserve for January hit a six-year low with an official reading far below economists’ expectations. A slowdown in industrial production complemented an already worsening situation in the energy sector, a core driver of growth in the Fed district.

Top News in the Stock Market Today

  • The Stock Market Today: On Tuesday, the Fed Open Market Committee will kick off its first meeting on U.S. monetary policy of the year. Meanwhile, keep an eye on house prices for November with the release of the S&P/Case Shiller house price index. Finally, an important consumer confidence report for January will be released by the Conference Board. Economists expect the reading to remain unchanged this month despite the sharp market selloff witnessed over the first few weeks.
  • Oil Outlook: Crude oil prices were up this morning thanks to a rise in optimism over a possible deal between OPEC and non-OPEC producers to address a major global supply glut. OPEC has long pushed for non members to make concessions and cut production. Although Russia has refused to comply, Iraq’s oil minister has hinted there may be flexibility for an agreement between both sides. March WTI crude prices climbed 1.1% to settle at $30.68. Meanwhile, Brent crude gained 1.1% to rise to $30.85 per barrel.

Earnings Outlook: AAPL, VMW, JNJ, COH, T, PG, X, LMT, FCX

Earnings Report No. 1, AAPL: After the bell, Apple Inc. (Nasdaq: AAPL) will report fiscal Q1 2015 earnings. The technology giant is expected to report earnings per share (EPS) of $3.24 on $76.41 billion in revenue, but Apple is under pressure from weakening demand for its iPhone 6 and iPhone 6S products. Investors are also on edge regarding the company’s exposure to China. Despite the cloudy forecasts for AAPL stock, here’s the case why Apple will defy analyst expectations.

Earnings Report No. 2, JNJ: Shares of Johnson & Johnson (NYSE: JNJ) are up 0.3% after the company announced EPS of $1.44 on revenue of $17.81 billion in its Q4 2015 earnings report. Wall Street expected that the company would report an EPS of $1.42 on $17.93 billion in revenue. The company has seen a decline in its medical devices business, and it recently announced plans to slash 3,000 jobs as part of a broader effort to reduce annual savings by roughly $1 billion.

Additional companies reporting quarterly earnings include VMWare Inc. (NYSE: VMW), Coach Inc. (NYSE: COH), AT&T Inc. (NYSE: T), Procter & Gamble Co. (NYSE: PG), United States Steel Corp. (NYSE: X), Lockheed Martin Corp. (NYSE: LMT), 3M Inc. (NYSE: MMM), and Freeport-McMoRan Copper & Gold (NYSE: FCX).

Stocks to Watch: GS, CAT, AA, HBAN, FMER

  • Stocks to Watch No. 1, GS: Shares of Goldman Sachs Group Inc. (NYSE: GS) fell more than 3.6% on Monday due to broad weakness in the financial sector and the volatility of the stock. Overall, shares of the iconic Wall Street bank are now down more than 16% in January. The company also made news yesterday by downgrading shares of Caterpillar Inc. (NYSE: CAT)
  • Stocks to Watch No. 2, AA: Shares of Alcoa Inc. (NYSE: AA) were on the move this morning on news that hedge fund Elliott Management Corp. has boosted its position in the manufacturer to 7.4%. The fund said that it supports the commodity manufacturer’s plans to spin off its parts-making division from its core business.
  • Stocks to Watch No. 3, HBAN:  This morning, Huntington Bancshares Inc. (Nasdaq: HBAN) announced plans to purchase Firstmerit Corp. (Nasdaq: FMER) in a cash-and-stock deal worth roughly $3.4 billion.

Today’s U.S. Economic Calendar (all times EST)

  • Redbook at 8:55 a.m.
  • FHFA House Price Index at 9 a.m.
  • S&P Case-Shiller HPI at 9 a.m.
  • Consumer Confidence at 10 a.m.
  • Richmond Fed Manufacturing Index at 10 a.m.
  • State Street Investor Confidence Index at 10 a.m.
  • 4-Week Bill Auction at 11:30 a.m.
  • 2-Year Note Auction at 1 p.m.

What Investors Must Know This Week

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