The market rout continued Wednesday with the Dow Jones Industrial Average falling into bear market territory after the World Health Organization declared the coronavirus, or COVID-19, a pandemic, plus more in today’s Closing Bell on Money & Markets.
The Top Story
It’s no longer a question of “if” a bear market will set into U.S. stocks, but rather a question of “how long will it last?”
Equities took another solid beating Wednesday after the World Health Organization officially declared the coronavirus a pandemic.
Sell-offs ensued as Wall Street mounted morning losses with ever-steeper declines throughout the day. The Dow ended up losing 1,464 points, officially dropping it 20.3% below its record high of 29,551 set Feb. 12.
The S&P 500 was not far behind, closing down 4.9% on the day and 19.2% from its previous closing record on Feb. 19 — putting it squarely in the crosshairs of a 20% decline and bear market territory.
The Nasdaq finished 4.7% down, putting it 19% below its record high close, also on Feb. 19.
Money & Markets: Closing Bell*
S&P 500: 2,728 (-5.3%)
DOW: 23,601 (-5.9%)
NASDAQ: 7,911 (-4.7%)
GOLD: $1,635 (-1.5%)
BITCOIN: $7,849.45 (-1%)
U.S. 10-YEAR YIELD: 0.858%
*- as of 4:15 p.m.
A Big Win
As we mentioned this morning, PepsiCo Inc. (Nasdaq: PEP) is acquiring energy-drink maker Rockstar Inc. for $3.85 million. It’s the first major acquisition for Pepsi CEO Ramon Laguarta since he took over the beverage producer in 2018.
Express Inc. (NYSE: EXPR) shares moved 2% higher during the day after it reported beating quarterly earnings and revenue estimates. The company did forecast a larger loss for the current quarter.
Going three for three today, we also told you about Fiat Chrysler Automobiles NV (NYSE: FCAU) temporarily shuttering its plants in Italy due to the spread of the coronavirus in that country. Shares of Fiat Chrysler were down 3.2% in the afternoon.
M&A News
PepsiCo Inc. (Nasdaq: PEP) is acquiring energy-drink maker Rockstar Inc. for $3.85 million. It’s the first major acquisition for Pepsi CEO Ramon Laguarta since he took over the beverage producer in 2018.
Golden Nuggets
Even precious metals weren’t immune from Wednesday’s sell-off as gold futures also took a hit. It looked promising early in the day as gold rose following rate cuts from the Bank of England.
In the afternoon, gold prices sank 1.3% to $1,638 an ounce and silver dipped 1.5% to $16.69 an ounce.
Other precious metals were hammered as platinum fell 0.5% to $864.50 an ounce while palladium trimmed 4.1% to $2,215.20 an ounce.
Cannabis Corner
Members of the Oglala Sioux Nation have voted to legalize medical and recreational marijuana use on their reservation in South Dakota.
If the results stand, the tribe will be the only one in the United States to create a cannabis market in a state where it is otherwise illegal.
Under the initial plans, the tribe will have its own production and retail operations. However, it will issue licenses to outside retailers and collect taxes on those sales.
South Dakota, as a state, is voting on the legalization of medical and adult-use marijuana in November.
Stock Market Update
As markets continued to nosedive Wednesday, the Federal Reserve increased the amount of money provided to banks for lending to $175 billion.
The New York Fed said it’s raising the top level of money it provides in overnight lending from $150 million.
On top of the increase to overnight cash, the Fed will also extend its two-week repo of at least $45 billion. It’s also adding a one-month term repo of at least $50 billion.
Today’s Big Winners:
(as of 3:15 p.m. EDT)
Gilead Sciences Inc. (Nasdaq: GILD) +0.8%
Citrix Systems Inc. (Nasdaq: CTXS) +0.5%
Today’s Big Losers:
(as of 3:15 p.m. EDT)
Apache Corp. (NYSE: APA) -25%
Norwegian Cruise Lines Holdings Ltd. (NYSE: NCLH) -23.7%
Boeing Co. (NYSE: BA) -17%
Align Technology Inc. (Nasdaq: ALGN) -12.1%
Expedia Group Inc. (Nasdaq: EXPE) -11.6%
Check back for the most important news and numbers each day after the Closing Bell, only on Money & Markets.
Don’t forget about “Marijuana Markets: a POTcast,” featuring the biggest cannabis news and investment notes from Banyan Hill’s Anthony Planas, here on Money and Markets each Saturday morning.