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Closing Bell: Rate Cut Has No Effect on Markets as Indexes Nosedive

Closing Bell

Not even a massive injection of monetary stimulus from the Federal Reserve could stop a dead cat bounce in the markets as indexes cratered again Monday, plus more in the Closing Bell on Money & Markets.

The Top Story

And things were looking so good on Friday.

All three markets had gains of nearly 10%, closing out a wild week on Wall Street.

But on Monday, markets took away what they gave as all three major indexes fell around 12-13%. Trading was halted for 15 minutes just after the opening bell when the S&P 500 fell 7%. Futures contracts tied to averages hit their “limit down” in premarket trading.

This came a day after the Federal Reserve announced it was dropping interest rates to zero and initiating a $700 billion quantitative easing program — purchasing things like government bonds, T-Bills and government notes.

Even after the stoppage in the morning, markets continued to lose ground, and stocks only continued to fall after U.S. President Donald Trump announced the coronavirus outbreak could last into August 2020. The Dow lost 2,997 points, or 12.9%, while the S&P 500 fell 11.9%. The Nasdaq Composite closed 12.3% lower.

Stock Market Update: Closing Bell*

S&P 500: 2,386 (-11.9%)
DOW: 20,188 (-12.9%)
NASDAQ: 6,904 (-12.3%)
GOLD: $1,503 (-0.8%)
BITCOIN: $4,906.95 (-6.4%)
U.S. 10-YEAR YIELD: 0.74%

*- as of 4:25 p.m.

A Big Win

This morning, your “stocks to watch today” included United Airlines Holdings Inc. (Nasdaq: UAL). The company reported slashing 50% of its capacity and a big drop in current-quarter revenue. Shares of United were down 14.8%.

Moderna Inc. (Nasdaq: MRNA) skyrocketed today — shooting up 24.3% in the afternoon — as the company started clinical trials for its COVID-19 vaccine.

Finally, we told you to watch out for Apple Inc. (Nasdaq: AAPL). The company closed its stores and just got a $1.2 billion fine from a French regulatory agency for antitrust violations. Apple shares dropped 12.8%.

M&A News

Huntsman Corp. (NYSE: HUN) is acquiring specialty chemical manufacturer CVC Thermoset Specialties. Under the terms of the deal, Huntsman will pay $300 million in the all-cash transaction.

Golden Nuggets

Along with equities, precious metals took a beating Monday.

Gold futures fell 1% to trade at $1,501 an ounce. Silver futures were hit particularly hard — falling 12.1% to $12.74 an ounce.

Another precious metal falling hard was platinum. Futures were down 11% in afternoon trading to $661 an ounce. Palladium continued to drop as well, plunging 1.9% to $1,480 an ounce.

Cannabis Corner

Boston-area residents are racing to marijuana dispensaries to stock up on cannabis in the event of a coronavirus quarantine.

According to WGBH, one dispensary in Brookline has halted all walk-in orders due to the high volume of customers. Representatives of the New England Treatment Access store said they are cleaning the store every night and daily in response to concerns over the coronavirus.

The state’s Cannabis Control Commission said that treatment centers offering patient delivery can expand their services, but patients can still only buy up to a 60-day supply.

Airlines Seeking $50 Billion in Government Aid

The travel industry has taken a beating over the last two months thanks to the coronavirus.

As a result, airlines have pulled guidance for the next quarter and the year as ticket sales continue to fall.

Now, U.S. airlines are in talks with federal officials to get nearly $50 billion in financial assistance — more than three times the size of the bailout provided to the industry after the Sept. 11 attacks.

According to The Wall Street Journal, the aid package could include government-backed loans, cash grants and relief from taxes and fees.

“We don’t see the airlines failing, but if they get into a cash crunch we’re going to try to help them,” National Economic Council Director Larry Kudlow told reporters at the White House on Monday. Kudlow said “lots” of airlines had reached out seeking assistance.

“We’re in touch about their balance sheets and their cash flow,” he said.

Today’s Big Winners:

Conagra Brands Inc. (NYSE: CAG) +9.7%

American Airlines Group Inc. (Nasdaq: AAL) +11.2%

Clorox Co. (NYSE: CLX) +2%

Today’s Big Losers:

MGM Resorts International (NYSE: MGM) -33.5%

L Brands Inc. (NYSE: LB) -27.7%

Capri Holdings Ltd. (NYSE: CPRI) -30.7%

Wynn Resorts Ltd. (Nasdaq: WYNN) -24.4%

Boeing Co. (NYSE: BA) -23.8%


Check back for the most important news and numbers each day after the Closing Bell, only on Money & Markets.

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