A crash in business activity coupled with more dismal first-quarter earnings reports pushed stocks downward, plus more in today’s Closing Bell on Money & Markets.
The Top Story
Wall Street continued to slide after U.S. sales plunged 8.7% in March and manufacturing output dropped by the most in more than 74 years due to the novel coronavirus outbreak.
Adding to investors’ mounting misery was another string of poor first-quarter earnings reports. Bank of America Corp. (NYSE: BAC) and Citigroup Inc. (NYSE: C) fell 6.4% and 5.6% respectively, as they joined JPMorgan Chase & Co. (NYSE: JPM) and Wells Fargo & Co. (NYSE: WFC) in reporting a slump in first-quarter profits.
“Wall Street right now has this big tug-of-war between hope and reality,” said Larry Adam, chief investment officer at Raymond James. “We’re talking about hope we get beyond COVID-19, but in the meantime, we get the reality of some of these numbers that highlight some concerns about the consumer.”
The S&P 500 energy sector slumped 4.6% as oil prices sank after reports suggested persistent oversupply and collapsing global demand. West Texas Intermediate crude dropped 1.2% to $19.86 a barrel while Brent crude fell 6.4% to $27.69 a barrel.
The banking subsector fell 5.9%, as the biggest U.S. lenders set aside billions of dollars to prepare for an expected flood of loan defaults as the coronavirus pandemic all but halted business activity. Flight from risky assets also hit Treasury yields.
The Dow Jones fell 1.8%. The S&P 500 fell 2.2%, and the Nasdaq Composite was off 1.4%.
Stock Market Update: Closing Bell*
S&P 500: 2,783 (-2.2%)
DOW: 23,504 (-1.8%)
NASDAQ: 8,393 (-1.4%)
GOLD: $1,745.10 (-1.3%)
BITCOIN: $6,755 (-2.2%)
U.S. 10-YEAR YIELD: 0.62% (-0.122)
*- as of 4:22 p.m.
A Big Win
In this morning’s Opening Bell, we told you to watch Teledoc Health Inc. (NYSE: TDOC) after the company said it expects a $50-million increase in Q1 revenue and a 70% growth in visits compared to Q1 2019. Shares of Teledoc were up 9.2% in afternoon trading.
JCPenney Co. Inc. (NYSE: JCP) shares tanked by 26.3% on news it is exploring bankruptcy after closing all 850 of its department stores because of the coronavirus spread. The prevailing concern with the company is its ability to make upcoming debt payments.
Thanks to a 54% increase in adult-use cannabis sales in its third quarter, shares of Aphria Inc. (NYSE: APHA) moved 3.5% higher. The company reported revenues of $55.6 million — a 65% increase from the previous quarter.
Golden Nuggets
Precious metals suffered a big pullback despite equities markets moving down as investors booked profits from the recent surge.
Gold futures fell 1.3% to trade at $1,745.10 an ounce. Silver took a significant hit as futures were down 3% to $15.64 an ounce.
Platinum dropped nearly 2% to $804.10 an ounce while palladium was off 1.6% to $2,149.80 an ounce.
Cannabis Corner
Forced store closures have trimmed nearly $2 million worth of cannabis sales per day in Massachusetts, according to Marijuana Business Daily.
Gov. Charlie Baker ordered recreational stores to close on March 24, just as marijuana sales were 19% higher than the three-month average.
Before the coronavirus outbreak, it was estimated that 2020 marijuana sales in Massachusetts would be between $575 million and $700 million.
Small Business Stimulus Funds Could Run Out Any Day
While the federal government hasn’t provided any official figures, CNBC reported the $350 billion Payroll Protection Program could be tapped out any day now.
More than 1.3 million loans have been approved at a value of more than $296 billion, according to sources.
The PPP was part of a $2.2 trillion coronavirus stimulus package approved by Congress last month. The bill also included direct payments to individuals.
Small businesses also have the ability to apply for six months of payment relief on certain types of existing loans through the Small Business Administration.
Today’s Big Winners:
Netflix Inc. (Nasdaq: NFLX) +3.2%
Boeing Co. (NYSE: BA) +3.5%
Activision Blizzard Inc. (Nasdaq: ATVI) +3.8%
Today’s Big Losers:
L Brands Inc. (NYSE: LB) -10.3%
Cintas Corp. (Nasdaq: CTAS) -7.2%
Walgreens Boots Alliance Inc. (Nasdaq: WBA) -6.3%
Check back for the most important news and numbers each day after the Closing Bell, only on Money & Markets.