Stock market news, July 30, 2014: U.S. markets failed to rally this morning despite news that the U.S. economy grew by 4% in the second quarter and Automatic Data Processing reported that private-sector employers added 218,000 jobs in July. Despite optimism over the headline figure of 4% growth, more than 50% of this figure was attributed to rising inventory levels.
The markets remained mixed until the afternoon, awaiting announcement from the conclusion of the two-day Federal Open Market Committee (FOMC) meeting. The Dow Jones turned into the red, losing more than 40 points after the U.S. Federal Reserve said it would cut bond purchases again, but offered little insight into future rate hikes. The Fed acknowledged that inflation had risen closer to its annual target of 2%, but said that long-term inflation is expected to remain stable.
Here's the scorecard from today's trading session:
Dow: 16,880.36, -31.75 (-0.19%)
Nasdaq: 4,462.90, +20.20 (+0.45%)
S&P 500: 1,970.07, +0.12 (+0.01%)
Now, here are the top stock market news stories from today:
- Banks Behaving Badly: Shares of Bank of America Corp. (NYSE: BAC) were up 1.5% despite news that a federal judge has ordered the bank to pay $1.27 billion after a jury determined the company was liable for fraud in its Countrywide mortgage business. The emphasis was on a program called the "High-Speed Swim Lane," or HSSL, which placed an emphasis on churning out as many mortgage loans as possible and bypassing important safety checks in the risk management process. According to reports, the bank defrauded Freddie Mac and Fannie Mae out of $2.96 billion by using this HSSL process.
- Big Buy-Side Play: Pharma-giant AstraZeneca Plc. (NYSE ADR: AZN) announced plans to purchase the rights to Almirall's (OTCMKTS: LBTSF) respiratory drug offerings in a deal worth up to $2.1 billion. The company is boosting its respiratory business after it rejected multiple takeover bids by rival Pfizer Inc. (NYSE: PFE) during the second quarter.
- Merger Mania: While U.S. investors appear focused on the post-Labor Day decision by regulators on whether to approve the proposed merger between Sprint Corp. (NYSE: S) and T-Mobile US (NYSE: TMUS), another deal is looking likely south of the border. Spanish telecom giant Telefonica S.A. (NYSE ADR: TEF) is reportedly in talks to purchase Mexican rival Iusacell, the nation's third-largest mobile carrier, in a deal valued at $4 billion, according to The New York Times. Here's a way for investors to start profiting from the Sprint/T-Mobile merger today...
- Argentina on the Brink: Officials in Argentina are attempting to obtain more time from a U.S. court or reach an agreement with bondholders by the end of the day to avert the nation's second default in just 13 years. Such an event would make it even more difficult for Argentine companies to obtain capital and build business in the debt-strapped nation. The rush to avoid default comes just weeks after a number of hedge funds beat the government in court over the full payment of bond agreements dating back to 2001.
- Stocks to Know: Shares of United States Steel Corp. (NYSE: X)popped more than 20% today thanks to a second-quarter loss that still beat Street expectations. Meanwhile, Humana Inc. (NYSE: HUM) slumped by more than 5% after the company reported its second-quarter profits plummeted 18%.
Now our experts share some of the most important investment moves to make based on today's market trading - for Money Morning Members only:
- Put These Investing Classics on Your Vacation Reading Short List: As we move into August, we're hitting prime vacation season. If you're like Money Morning Executive Editor Bill Patalon, you want to use that time to catch up on your reading. Consider including a business book or two on that list. The time invested will have a long-term payoff. Here's a list of Bill's current favorite investment books...
- This Miracle Material Is Our Secret Weapon in the Coming Energy War: China and Russia's $400 billion natural gas deal was one of the first shots in their energy war against the United States and Europe. But Defense & Tech Specialist Michael A. Robinson discovered one company's products that are a big part of the technology that provides our best defense in this coming war. And that makes this a "defense" technology we can feel proud about profiting from...
- A Clear Way to Profit from a Graying Population: The Baby Boom generation, which includes everyone born from 1946 through 1964, is now entering retirement age (65) at a rate of 10,000 per day. Naturally, the more seniors there are, the more demand there will be on the medical community for better and safer therapies, and more ways to profit from this trend...