Dow Jones Industrial Average Today Climbs as Kuwaiti Oil Prices Stabilize

Money Morning Contributor
Font Size:

Dow Jones Industrial Average
Dow Jones Industrial Average News, 4/19/2016: Global markets pushed even higher on Tuesday as oil prices stabilized.

Despite news that Saudi Arabia and a large number of other crude producers couldn’t reach a deal to freeze output, crude received an unexpected bounce from an unlikely source. Oil workers in Kuwait have gone on strike, and the pressure from the shutdown has sidelined roughly 1.5 million barrels of crude. This represents more than half of the nation’s daily production levels.

But don’t expect this strike to last very long. Like every other nation in the region, Kuwait depends significantly on oil production in order to finance its government operations.

We’ll explain how to prepare for what happens next below.

Here’s today’s top stock market news, stocks to watch, ways to profit and economic calendar for April 19, 2016.

What’s Moving the Dow Jones Industrial Average Today: Kuwait Oil Strike Supports Crude Prices

Dow Jones futures projected a 53-point gain on the backs of a solid rally from European stocks and the Nikkei. European shares hit a three-month high as oil prices stabilized due to the Kuwait oil strike.

Don’t make this popular mistake: Wall Street has soured on automakers. But it’s missing an incredible opportunity with this carmaker. This company’s pre-emptive strategy could mean a 41% surge in its stock…

Here’s a breakdown of why the Dow is climbing higher this morning.

  • First up, this is an extremely busy day of earnings reports. Despite lowered expectations for S&P 500 companies to release their worst quarterly figures since 2009, the Dow just rallied above 18,000 for the first time since July 2015.
  • WTI crude oil prices were up more than 1%, while Brent crude also ticked up more than 1.2%. The Kuwait oil strike is supporting prices right now after the collapse of the Doha oil talks. However, one shouldn’t expect this strike to last too long given the sector’s importance to the broader Kuwaiti economy. Investors may want to prepare for another bout of oversupply. That’s because the collapse of the Doha oil talks means that each of the countries that participated – like Saudi Arabia and Russia – will shift their focus back to their own self interest. Russia has already said it plans to increase production. This will help fuel a daily oversupply level in excess of 1 million barrels higher than global demand, leaving the international markets awash in crude oil.
  • The minimum wage debate continues to dominate the political discussion as the 2016 election season approaches. Today, retailer Target Corp. (NYSE: TGT) announced plans to boost its minimum wage to $10 per hour. The decision has been made to match a similar decision made by rival Wal-Mart Stores Inc. (NYSE: WMT) earlier this year. As our Chief Investment Strategist Keith Fitz-Gerald explains, raising wages can be a difficult proposition for companies. You want to own stocks with strong cash flow and profit margins to absorb a universal hike in wages, as evidenced with the two retail companies. Keith has one such stock for you to consider
  • On the economic front, a light economic calendar features the monthly update on domestic housing starts. We might see a slight decline in housing starts, but permits are likely to gain more attention. A rise in permits would indicate future activity and could help offer a boost to the housing market’s recent cool down.

Now here’s your list of top stocks to watch in today’s market, plus today’s economic calendar:

Companies to Watch in the Stock Market Today

  • It’s a market of ever-shrinking expectations for the financial sector. This morning, Goldman Sachs Group (NYSE: GS) beat first-quarter profit expectations, but revenue levels collapsed by 40% compared to the same time last year. Goldman has experienced four-consecutive quarterly profit declines as its investment banking and bond trading have faced greater volatility in the markets.
  • We’re still keeping our eye on Yahoo! Inc. (Nasdaq: YHOO) and the self-imposed deadline it set for companies to offer competitive bids. Yahoo’s assets apparently are all up for grabs, which would include its Internet business, its stake in Alibaba Group Holding Ltd (NYSE: BABA), and Yahoo Japan. Although 40 companies looked at Yahoo’s books, it’s not clear that much interest had been generated. According to various reports, Yahoo received bids from Yellow Pages owner YP Holdings, private-equity giant TPG, and Verizon Comm. Inc. (NYSE: VZ).
  • Look for the Johnson & Johnson (NYSE: JNJ) stock price to hit a record high at the open of the markets after the consumer goods maker beat expectations and boosted its 2016 earnings outlook. JNJ stock was up more than 1% after reporting strong demand for its pharmaceutical goods. The company did say that a strong U.S. dollar and exposure to weak economic activity in Venezuela tempered its full potential over the last three months.

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

  • Housing Starts at 8:30 a.m.
  • Redbook at 8:55 a.m.
  • 4-Week Bill Auction at 11:30 a.m.

The rise of super PACs and “dark money” organizations is undermining the democratic power of you: the average American voter. Watch the video to learn more about how “dark money” has changed the rules of American politics forever.

This Penny Stock Will Double Your Money – And Save A Dying U.S. Industry: It’s not easy to find a truly compelling penny stock, which is why this one is such a remarkable find. Not only is this green energy stock capable of a gain of 100% or more, it’s just now rolling out technology with the potential to rescue the struggling coal industry. But this 21st century success story has only just begun, making now the perfect time to buy this stock… Read More…

Follow Money Morning on Facebook and Twitter.

About Money Morning: Money Morning gives you access to a team of ten market experts with more than 250 years of combined investing experience – for free. Our experts – who have appeared on FOXBusiness, CNBC, NPR, and BloombergTV – deliver daily investing tips and stock picks, provide analysis with actions to take, and answer your biggest market questions. Our goal is to help our millions of e-newsletter subscribers and visitors become smarter, more confident investors.To get full access to all Money Morning content, click here.

Disclaimer: © 2016 Money Morning and Money Map Press. All Rights Reserved. Protected by copyright of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including the world wide web), of content from this webpage, in whole or in part, is strictly prohibited without the express written permission of Money Morning. 16 W. Madison St. Baltimore, MD, 21201.

Money Morning