Your Wednesday Market Blip 12/9/15

Your Wednesday Market Blip 12/9/15

The Dow closed the day lower in a wild session which saw an opening triple digit gain followed by a triple digit dump before closing at 17,492 off 75 points. Trading volume was higher. The Dow continues to trade at support levels amid oil price uncertainty and interest rate jitters.
Costco reported sales and earnings today and the numbers missed estimates. Total revenue grew by 1.3% and net income fell 1% thanks in part to cheaper gas prices and a strong US dollar. System wide comp store sales fell 1% with Canadian stores dropping 9% and other international locations falling 5%. Comp store sales in the US were up 2%. Adjusting for the low gas prices and strong US dollar, Costco said it would have posted same store sales closer to the 6% range.
Kinder Morgan announced last night that it would cut its common dividend by 75% and redirect the money toward financing capital projects. The dividend cut means that Kinder Morgan will go from $1 billion in excess cash flow to about $4 billion in excess cash flow which is enough to fund capital projects without having to issue more equity or debt. The market cheered the news and sent shares higher. This was a case of giving up current dividends in order to capture cheap assets and build for the future.
DuPont and Dow Chemical are in advanced talks to merge in a mega deal that is estimated at $120 billion. Both stocks were higher on the news. The plan is for the two companies to merge and then split into 3 parts being agriculture, materials and specialty stocks.
Oil prices rebounded early in the day when a drop in crude stockpiles was reported but then turned lower when another report showed a surprise 5 million barrel increase in distillate inventories. Sharon “Iron Woman” Stark of D.A. Davidson said "I think that the market's looking at oil and really just waiting for the Fed to make their move next week," WTI crude closed the day at $37.25 a barrel off .77%.