Here Are 3 Hot Things to Know About Stocks Right Now

  • The Dow Jones Industrial Average finished sharply lower Wednesday as dismal data on U.S. factory activity sparked concerns for a global recession.
  • Johnson & Johnson (JNJ) shares rose after the consumer healthcare company reached a $20 million settlement in Ohio that keeps the company out of a federal trial linked to the nation's opioid crisis.
  • Stitch Fix (SFIX) tumbled after the online clothing retailer beat fiscal fourth-quarter earnings expectations but issued a weaker-than-expected revenue forecast for the first quarter. Stitch Fix is Real Money's Stock of the Day.

Wall Street Overview

Stocks finished sharply lower Wednesday, posting their worst day since August 23, as dismal data on U.S. factory activity and a weak jobs report sparked concerns for a global recession caused by the trade war between Washington and Beijing.
 
The Dow Jones Industrial Average ended down 494 points, or 1.86%, to 26,078, the S&P 500 dropped 1.79%, and the Nasdaq slid 1.56%. The Dow has fallen more than 900 points in two days.
 
Tech stocks were walloped, with the Nasdaq Technology Sector Index falling 1.6% and such companies as Cisco Systems ( CSCO) , Intel ( INTC) , and Apple ( AAPL) all losing ground.
 
"Worries over the global slowdown continue to build," Ryan Detrick, Senior Market Strategist for LPL Financial. "Then throw in impeachment discussions and protests in Hong Kong, and we have a sell first and ask questions later market on our hands," he said. "October is known for being one of the most volatile months and after two days, it is living up to that reputation."

Detrick said that the U.S. consumer "remains quite strong and the consumer makes up nearly 70% of GDP. This makes the services number and jobs data out the next two days all the more important."

The Institute for Supply Management's manufacturing index in September fell to its lowest level since 2009, with export orders tumbling amid the protracted trade dispute with China and employment contracting as plants and facilities were idled and investment stalled.

"While in the first half of September, global economic numbers improved slightly, recession fears returned in earnest since then," said Gorilla Trades strategist Ken Berman. "The odds of another rate cut by the Fed are on the rise again, and the declining Treasury yields reversed some of the encouraging trends that started last month."
 
In addition, private employers added 135,000 jobs during September, payroll firm Automatic Data Processing said, missing economists' average forecast of a gain of 142,500 and also below the revised 157,000 private jobs tallied up by ADP in August.
 
Politics worked its way into the discourse on a day where Democratic presidential hopeful Bernie Sanders was hospitalized and treated for an artery blockage. President Donald Trump weighed in on the turmoil, blaming the current impeachment investigation for the stock market's fall.
 
"All of this impeachment nonsense, which is going nowhere, is driving the Stock Market, and your 401Ks down," Trump wrote. "But that is exactly what the Democrats want to do. They are willing to hurt the Country, with only the 2020 Election in mind!"
 

All of this impeachment nonsense, which is going nowhere, is driving the Stock Market, and your 401K's, down. But that is exactly what the Democrats want to do. They are willing to hurt the Country, with only the 2020 Election in mind!

— Donald J. Trump (@realDonaldTrump) October 2, 2019

"Markets overreact to everything now-everyone should know by now that tariffs were going to slow growth and harm global manufacturing," Jamie Cox, managing partner for Harris Financial Group, said. "The fact that it showed up in US ISM this month should be of no surprise to anyone. Additionally, the Bernie Sanders news put the spotlight on an ever growing negative threat to markets, tax policy, and basically anything that matters financially -- an Elizabeth Warren nomination for President. Add in a little impeachment and you get the perfect recipe for a sell off."

Nevertheless, Cox added, "the bond market isn't signaling panic and we'll likely find calm waters very soon."

Johnson & Johnson ( JNJ) shares rose 1.6% to $132.00 after the consumer healthcare company reached a $20 million settlement in Ohio that keeps the company out of a federal trial linked to the nation's opioid crisis.
 
Stitch Fix ( SFIX) fell 10.8% to $17.89 after the online clothing retailer beat fiscal fourth-quarter earnings expectations but issued a weaker-than-expected revenue forecast for the first quarter. Stitch Fix is Real Money's Stock of the Day.
Florida Attorney General Ashley Moody said in a statement that the state joined the U.S. Department of Justice and 10 other states in backing the proposed $26.5 billion merger of T-Mobile ( TMUS) and Sprint ( S) . T-Mobile shares were down 2.3% to $76.41, while Sprint was down 3% to $5.98.
 
Shares of Lennar ( LEN) climbed 3.8% to $57.82 after the homebuilder beat Wall Street's third-quarter earnings expectations amid an ongoing revival in demand for new homes.

Exxon Mobil (XOM) shares fell 2.6% to $67.15 as the biggest U.S. oil company warned investors that lower crude prices would clip its quarterly profits.

E*Trade (ETFC)  fell 3.6% to $35.20, while rival online brokers continue to fall as investors re-priced the retail stock-trading sector following Charles Schwab's  (SCHW) move Tuesday to eliminate commissions.

Ford (F) said third-quarter car sales fell 3.8%, not as bas as analysts' consensus estimate of a 6.1% decline. The company's truck segment was the lone unit to increase sales in the quarter, up 8.8% to 309,920. Ford shares were down 3.3% to $8.61.

General Motors (GM) reported that third-quarter sales rose 6.3% from a year earlier to 738,638 vehicles, led by the GMC and Buick brands. A strike against the automaker is in its third week, as contract talks between the company and the United Auto Workers continue. Shares were down 4% to $34.68.

Oil prices were lower Tuesday after the Energy Information Administration reported an inventory increase of 3.1 million barrels for the week ended Sept. 27, higher than estimates that called for a rise of 1.57 million barrels.

Brent crude contracts were down $1.32 to $57.57 a barrel, while West Texas Intermediate contracts, which are more tightly linked to U.S. gas prices, were off $1.01 to $52.61 a barrel.

In addition, the American Petroleum Institute reported late Tuesday that U.S. crude supplies fell by 5.9 million barrels for the week ended Sept. 27

Johnson & Johnson, Apple and Cisco are holdings in Jim Cramer's Action Alerts PLUS member club . Want to be alerted before Jim Cramer buys or sells JNJ? Learn more now.

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