Markets

DJIA Index Gains 27 Points After Fed Minutes Released

MoneyMorning.com Report - For April 8, 2015, here's how the stock market did today, the top stock market news, and stocks to watch based on today's market moves...

How Did the Stock Market Do Today?

Dow: 17,902.51, +27.09,+0.15%

S&P 500: 2,081.90, +5.57,+0.27%

Nasdaq: 4,950.82, +40.59,+0.83%

The DJIA Index added 27 points Wednesday following a busy day of earnings reports and the release of minutes from the Federal Open Market Committee (FOMC) meeting in March.

The S&P 500 Volatility Index (VIX), the market's fear gauge, dipped 5.21% on the day.

Top Stock Market News Today

  • The markets were volatile after the release of the March FOMC meeting minutes . The minutes revealed a divergence in thought between members of the central bank. Several stated that recent economic data warrant a rate hike in June, while others cited recent strength in the U.S. dollar as a reason to delay a hike. June is viewed as the earliest that the central bank could tighten monetary policy and raise interest rates for the first time in six years.
  • This afternoon, both New York Fed President William Dudley and Fed Governor Jerome Powell proposed the possibility of a rate hike sooner than expected. In contrast, yesterday Minneapolis Fed President Narayana Kocherlakota, one of the bank's most notable doves, said the Fed should wait until the second half of 2016 before raising interest rates, then raise them gradually to 2% by the end of 2017.
  • Big news in the automotive sector: Electric car manufacturer Tesla Motors Co. (Nasdaq: TSLA) announced today it will immediately stop selling its current Model S vehicle. The car was its primary base model over most of the company's history. The company's stock rose nearly 3% on news that it will soon introduce a new vehicle with all-wheel drive and a longer battery life.
  • The M&A ball kept rolling this afternoon with the largest energy deal in at least a decade . This morning, Royal Dutch Shell (NYSE: RDS.A) announced plans to purchase rival BG Group Plc. (OTCMKTS ADR: BRGYY) for 47 billion pounds ($70.2 billion). Near-zero interest rates and uncertain economic horizons are pushing companies to grow through acquisitions rather than through organic efforts. The Shell deal will help the company close the gap on global market leader ExxonMobil Corp. ( XOM ), and it creates the world's largest independent producer of liquefied natural gas.
  • Following the closing bell, Alcoa Inc. ( AA ) reported first-quarter earnings in a move that officially kicks off earnings season. Alcoa reported earnings per share of $0.28 per share, beating analyst expectations of $0.26 per share. Revenue rose 6.7% to $5.82 billion, less than the $5.94 billion analysts had forecast.

Stocks to Watch: LULU, RAD, MYL, AAPL, ETSY

  1. Stocks to Watch No. 1, LULU: Shares of Lululemon Athletica Inc. (Nasdaq: LULU) rose 3.46% this afternoon on news that the company received an upgrade from investment firm Sterne Agee ahead of its first-quarter earnings report. The firm raised its target price to $77, an 11.4% premium from today's levels. The firm cited the yoga-gear maker's improved business processes, stronger board execution, and the industry knowledge of its newly appointed CFO as its primary reasons for the upgrade.
  2. Stocks to Watch No. 2,RAD: Shares of Rite Aid Corp. ( RAD ) jumped more than 2% today on news that the drug retailer bested fourth-quarter earnings expectations. The firm announced quarterly earnings of $1.84 billion, or $1.79 a share.
  3. Stocks to Watch No.3, ETSY: The Etsy IPO date has been set for Thursday, April 16. The company will list on the Nasdaq under the ticker "ETSY." This is one of the most hyped tech IPOs of 2015. In fact, the Etsy's could be the largest technology IPO from a New York-based company since barnesandnoble.com spun off Barnes & Noble Inc. (NYSE: BKS) in 1999. With the Etsy IPO date quickly approaching, here's everything you need to know about the deal - including whether or not you should buy Etsy stock when it starts trading...
  4. Stocks to Watch No. 4, AAPL: Shares of Apple Inc. (Nasdaq: AAPL) slipped 0.33% on news of a rare stock downgrade for the technology giant. This morning, Societe Generale SA (OTCMKTS ADR: SCGLY) announced it had downgraded the company over new concerns about its smartphone sales prices and negative effects of a rising U.S. dollar in recent months. The investment bank's analyst moved the stock to a hold and maintained a price target at $130. Apple was also hit today by a number of poor reviews for its pending Apple Watch product. Reviewers complained about low battery life and slower apps.
  5. Stocks to Watch No.5, MYL: The deals keep coming in the white-hot biotech sector. Shares of Mylan NV (Nasdaq: MYL) surged 14.76% on news that the generic drug manufacturer offered $29 billion in cash and stock for Perrigo Co. ( PRGO ). Shares of PRGO jumped 18.39% on the day. Aside from the strong financial and increased savings the two companies could realize after a merger, the two companies would boost access in generic drugs to consumers, Mylan said in a statement.

How to Make Money in the Stock Market Today

Every day we give investors a "tip of the day" to find their best profits. Today's tip comes from Money Morning Tech Expert Michael A. Robinson:

Turn market volatility to your advantage and earn more money on your investments by using a buying strategy called split entries.

The stock market has been volatile over the last several months. And we'll be dealing with this choppiness for the foreseeable future.

But you can turn these choppy markets into huge profits by using a tool called "split entries."

Here's how it works. Instead of buying your standard amount of a stock, you divide your entries into at least two tranches.

For example, say you want to invest in a company called Ultimate Tech Inc. at $50 a share. Start by investing half of your standard stock purchase at the current market price. In this case, 100 shares would cost you $5,000, but you cut that in half, starting with $2,500.

As soon as that market order fills, you put in what's known as a "lowball limit order." That's an order to purchase shares when they fall to a specified price.

I usually set mine at a 20% discount from my original entry price, but use your best judgment in each individual case.

In this case, you'd buy a second round of Ultimate Tech at $40 a share. When the stock falls to that price, your order automatically fills and you now have an average cost of $45, a 10% discount from your original order.

Now let's say Ultimate rallies all the way to $60. Based on your average price of $45, you have cumulative gains of 25%. Your original order has gains of 16.6%.

But your second half has earned twice as much - 33.3%.

This is a great way to bake extra profits into your portfolio when markets are volatile.

Go here for more profit tips and stock picks from Michael Robinson...

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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