A Federal Reserve measure aimed at helping stabilize U.S. markets from the fallout of last week’s coronavirus correction seemed to have the opposite effect, plus more in today’s Closing Bell on Money and Markets.
The Top Story
Despite a 0.5% cut in rates by the Federal Reserve, markets could not capitalize on Monday’s record performance.
In fact, at one point equities markets gave back much of what they gained Monday as coronavirus fears continued to take a toll. The Dow Jones gained 1,293 points on Monday — the largest percentage gain since 2009.
In another twist, the benchmark 10-year Treasury yield fell below 1% for the first time in history. The drop came soon after the Fed announced the rate cut. It rebounded to 1.01% later in the day.
Just happened! The yield on the 10-year US government #bonds just traded at 0.9999%. More to follow. https://t.co/yV6OLL112Y
— Mohamed A. El-Erian (@elerianm) March 3, 2020
The G-7 didn’t assuage fears much earlier, stating it would use policy tools to slow down an economic downturn. The problem was, G-7 leaders provided no clear path on how they would do that.
The mounting losses came as all three indexes hit correction levels — falling at least 10% from their recent record highs — last week.
The Dow fell 2.9%. The S&P 500 fell 2.8% and the Nasdaq Composite lost 3%.
Money and Markets: Closing Bell*
S&P 500: 3,003 (-86 points, -2.8%)
DOW: 25,914 (-788 points, -2.9%)
NASDAQ: 8,684 (-268 points, -3%)
GOLD: $1,636.60 (+$41.80, +2.6%)
BITCOIN: $8,717.13 (-207.22, -2.3%)
U.S. 10-YEAR YIELD: 1.0%
*- as of 4:12 p.m.
A Big Win
In today’s Wall Street Wake-Up, we told you to be on the lookout for Target Corp. (NYSE: TGT). The company reported weak revenue and flat sales in the last quarter. Shares of Target fell 2.9%.
M&A News
Thermo Fisher Scientific Inc. (NYSE: TMO) is acquiring Qiagen NV for more than $43 per share in an all-cash transaction. Qiagen makes tests for various diseases, including cancer.
Yum! Brands Inc. (NYSE: YUM) has acquired leadership training developer Heartstyles. Yum! Brands is the parent company of KFC, Pizza Hut and Taco Bell. Terms of the deal were not disclosed.
Golden Nuggets
Gold futures skyrocketed as equities plummeted Tuesday despite the 50-point cut by the Fed.
The precious metal earned back all of its losses from Friday as futures were up 2.6% to $1,637.20 an ounce.
But gold was not alone. Silver futures also experienced a 2.5% bump in price to $17.15 an ounce. Platinum also climbed 2% to $875.70 an ounce.
While the markets were good to gold, silver and platinum, palladium suffered another day of losses, falling to $2,381 an ounce.
Cannabis Corner
Utah’s first medical cannabis pharmacy opened this week in Salt Lake City.
Dragonfly Wellness opened as the first store since Utah voters and lawmakers approved medical cannabis in the state 15 months ago.
Richard Oborn of the state’s Center for Medical Cannabis said Dragonfly is one of 14 cannabis pharmacies expected to open in Utah this year.
Utah became the 33rd state to approve medical cannabis and started accepting patient applications for cards last week.
Stock Market Update
A new bill introduced in Congress would make e-commerce companies liable for any counterfeit products sold on their websites.
Four House members introduced The Shop Safe Act of 2020, aimed at companies like Amazon.com Inc. (Nasdaq: AMZN) and eBay Inc. (Nasdaq: EBAY), to take preventive measures stopping the sale of knockoffs on their platforms.
“Consumer lives are at risk because of dangerous counterfeit products that are flooding the online marketplace,” Rep. Doug Collins (R-Georgia) said in a statement. “Congress must create accountability to prevent these hazardous items from infiltrating the homes of millions of Americans.”
The rise in counterfeit items was marked in a Government Accountability Office report. That report found that nearly half of the goods sold on e-commerce websites were fake.
Today’s Big Winners:
Trane Technologies PLC (NYSE: TT) +5.4%
Newmont Corp. (NYSE: NEM) +6.2%
Vulcan Materials Co. (NYSE: VMC) +1.7%
NetEase Inc. (Nasdaq: NTES) +3%
eBay Inc. (Nasdaq: EBAY) +2.1%
Today’s Big Losers:
Charles Schwab Corp. (NYSE: SCHW) -8.7%
SVB Financial Group (Nasdaq: SIVB) -8.3%
Mylan NV (Nasdaq: MYL) -6.8%
American Express Co. (NYSE: AXP) -5.1%
Microsoft Corp. (Nasdaq: MSFT) -4.8%
Check back for the most important news and numbers each day after the Closing Bell, only on Money and 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.