Stock market live Thursday: Dow down 130 after sudden midday drop, gold 7-year high, E-Trade surges

There will be bounce back in second quarter despite coronavirus: Strategist
There will be a bounce back in second quarter despite coronavirus: Strategist

This is a live blog. Check back for updates.

4:01 pm: Dow finishes well off the lows, down 130 points

The Dow closed the day down about 131 points, while the S&P 500 and Nasdaq both fell from their record highs. The market experienced a sudden drop around midday, with the Dow slumping 388 points at its low. Some traders attributed the rapid losses to a report that the coronavirus cases surged in Beijing, while others pointed to a momentum unwind trade. The gains in real estate sector gave the broad market some cushion. Also, small-cap benchmark the Russell 2000 index finished the day higher 0.1%. — Li

2:56 pm: Final hour of trading: Stocks off their midday lows

The major averages traded well off their session lows with roughly one hour left in the session. The Dow was down about 160 points, or 0.6%. The S&P 500 and Nasdaq traded lower by 0.6% and 0.8%, respectively. At its low of the day, the Dow fell as much as 388 points. The S&P 500 and Nasdaq fell as much as 1.3% and 1.8%, respectively. — Imbert

2:39 pm: ESG exchange-traded funds see volume spike

Coronavirus may be grabbing the headlines, but ESG (Environmental, Social and Governance)-themed ETFs, particularly clean energy, are seeing very large trading volumes and significant inflows recently: Invesco Solar ETF (TAN), Global X Lithium and Battery ETF (LIT), Invesco Wilderhill Clean Energy ETF (PBW). ESG is not a flash in the pan. —Pisani

2:18 pm: 23 S&P 500 stocks hit record highs, Ford and Viacom reach 52-week lows

Best Buy, Fastenal and Nvidia are among the 23 S&P 500 components that hit all-time highs on Thursday despite the broader market's decline. ViacomCBS and Ford Motor, however, did not fare as well, reaching their respective 52-week lows. Here are some other stocks that climbed to record highs:

Hayes, Imbert

2:10 pm: NYSE advancers outnumber decliners

The major stock indexes may be trading lower, but the number of New York Stock Exchange-listed stocks that are rising is greater than those declining. More than 1,600 NYSE-listed stocks traded higher while just over 1,100 names were declining. —Imbert

1:24 pm: Buffett to become longest-tenured S&P 500 CEO once Les Wexner leaves L Brands

Private equity firm Sycamore Partners will acquire control of Victoria's Secret from its owner L Brands, the companies announced Thursday morning, and L Brands CEO Les Wexner will step down upon the close of the deal. The 82-year-old Wexner has been Chief Executive since 1963 and is the longest-serving CEO of an S&P 500 company. Once Wexner leaves his post, Berkshire Hathaway's Warren Buffett will become the longest-tenured S&P 500 CEO, according to data provided to CNBC from The Conference Board. Buffett's 50 years in charge of Berkshire put him ahead of Alan B. Miller of Universal Health Services (42 years as CEO) and James H. Herbert, II of First Republic Bank (35 years). — Rattner

12:51 pm: The US manufacturing sector is back in business

The American manufacturing recession looks like it could be over judging by reports issued this week. Surveys out of the New York and Philadelphia Fed branches showed a big rebound after the sector had been in contraction for the latter part of 2019. The Philadelphia region report, released Thursday, hit its highest reading in three years. — Cox

12:40 pm: Momentum stocks are leading the sudden sell-off

Momentum stocks collapsed on Thursday, leading the declines in the broad market, while their value counterpart held up amid the turmoil. The iShares Edge MSCI USA Momentum Factor ETF dropped 1.2%, and the iShares S&P 500 Value ETF dipped only 0.5%. This unwind was predicted by JPMorgan's quant guru Marko Kolanovic who warned of a bubble in defensive and low-volatility stocks Wednesday. He reiterated his call to sell out of defensive assets and rotate into cyclical assets such as value stocks. "Bonds, momentum stocks, and low volatility stocks rallied – pushing the valuation spread between defensive and cyclical stocks to a level 2x worse than during the peak of the late-'90s tech bubble," Kolanovic said. "The bubble we are describing is expressed in equity factors ... We caution investors that this bubble will likely collapse, i.e. this time is not 'different.'" Kolanovic added some tech names are trading at "unsustainable valuations" supported by record level of speculative call option activity. Information technology and communication services sectors are the biggest losers Thursday. — Li

12:15 pm: El-Erian says markets 'underestimate what a big demand and supply shock' the coronavirus poses

Economist Mohamed El-Erian, while refusing to speculate on the direct cause of Thursday's sudden market drop, did say that he thinks investors are not taking the impact of the coronavirus on companies seriously enough in general. "This coronavirus issue is big. It will affect a lot companies, not just those with direct exposure to China," the Allianz chief economic advisor and ex-Pimco CEO told "Squawk Alley." "The markets have tended to underestimate what a big demand and supply shock this is." — Belvedere

12:12 pm: Speculative trades are unwinding as Virgin Galactic and Plug Power shed more than 4%

What a difference a day makes. Shares of speculative stocks Tesla, Plug Power and Virgin Galactic all slid more than 3% in midday trading Thursday. The leg lower follows a frenzy of trading activity on Wednesday that saw shares of Virgin Galactic and Plug Power spike 23.27% and 17.94%, respectively, as retail investors got in on the trade, and social media users took to popular sites like Reddit to discuss the surging stocks. Earlier in the session, Virgin Galactic gained more than 13%, breaking $40 and hitting a new high, before reversing gains and dropping into negative territory. — Stevens

11:48 am: Traders pointing to coronavirus fears for sell-off

Multiple traders pointed CNBC to a story on the website of the Global Times, which is a tabloid under the People's Daily, the official newspaper of the Communist Party of China. The story noted a sharp rise in coronavirus infections at a single Beijing hospital. The timing does not match up with the recent sell-off, however, as this story was posted a few hours ago. Still, the story taps into the fears investors have right now about the coronavirus possibly spreading in the capital city. Traders these days are more apt to sell first and figure out the facts later. — Melloy

11:33 am: Stocks keep going lower

The Dow's losses are now greater than 300 points and it's still not clear what is driving the move, other than possible technical analysis factors triggering quantitative selling. The Dow went from down 200 points to negative 370 points in the span of just a couple of minutes. Traders contacted by CNBC so far have no good reason behind the move. Big liquid name like Microsoft are falling with 'MSFT' now down more than 2%. Melloy

11:15 am: Shares move quickly to lows of the day

Stocks moved rapidly to the lows of the day. It was unclear of the catalyst though shares of Intel (down 3%) and Goldman Sachs (down 2%) are leading the way. The Dow is now down 150 points. — Melloy

10 am: Copart shares plunge after earnings miss

Vehicle auction company Copart was one of the worst performers in the S&P 500 in early trading after missing estimates for its fiscal second quarter. Shares of the company fell roughly 11% to under $93 per share after reporting adjusted earnings per share of 65 cents and $575.1 million of revenue. Wall Street analysts expected 66 cents per share and $576.1 million of revenue, according to FactSet. Copart's vehicle sales fell by nearly $3 million compared with the same period last year. — Pound

9:52 am: Gold hits 7-year high as investors pile into the safe haven trade

Gold rose 0.5% to $1,621.60 per ounce on Thursday, its highest level since Feb. 15, 2013. The metal is on pace for its sixth straight positive day, and eighth positive week in nine. As the coronavirus outbreak continues, investors fearing a

slowdown in

global growth are piling into so-called safe haven trades such as gold. — Francolla, Stevens

9:41 am: Virgin Galactic pops on heavy volume

Shares of Virgin Galactic rose as much as 5% as investors continued to trade the stock at a breakneck pace. More than 10 million shares of Virgin Galactic changed hands in the first five minutes of Thursday trading, according to FactSet, more than half the stock's daily average volume. — Sheetz

9:35 am: Dow drops 60 points at open after Clarida downplays rate cut odds

Stocks opened modestly lower across the board to start Thursday's session as UnitedHealth dragged the Dow into negative territory. Equities came under pressure in premarket trading following Federal Reserve Vice Chairman Richard Clarida's comments to CNBC that threw cold water on the prospects of a future interest rate cut, which investors had been pricing in. E-Trade led the S&P 500 higher after Morgan Stanley said it's agreed to buy the brokerage for $13 billion. L Brands, ViacomCBS were among the biggest losers. — Franck

8:47 am: Futures hit their lows following Clarida comments

Stock futures fell to their lows of the day after Federal Reserve Vice Chairman Richard Clarida told CNBC's Steve Liesman that traders expecting a rate cut could be off. "Market pricing on rate cuts is a little tricky," Clarida said, noting that he prefers to look at economists' forecasts over futures markets on Fed rates. Clarida noted the majority of economists do not expect a rate easing soon from the Fed. Fed futures are pricing in about a 50% chance of a rate easing by the Fed through June, according to the CME Group's FedWatch tool. Dow futures were last down 90 points after being down around 40 points before the Clarida interview. — Imbert

8:39 am: Here are the biggest calls on Wall Street on Thursday

CNBC Pro subscribers can read more here. — Bloom

8:29 am: Virgin Galactic 'overdue' for correction, Morgan Stanley says

Shares of Virgin Galactic vaulted 310% in the past three months and Morgan Stanley says the space tourism stock is due for "a bit of a breather here." The firm added that "a modest correction is overdue, and frankly, healthy, in our opinion." Despite the warning, Virgin Galactic shares rose 2% in premarket trading. — Sheetz

8:25 am: Domino's Pizza surges after earnings

Shares of Domino's Pizza rose more than 17% during Thursday's premarket trading after the company reported fourth quarter earnings that topped analyst expectations. For the quarter the company earned $3.13 per share, compared to consensus estimates of $2.98 per share, according to FactSet. Revenue came it at $1.15 billion, exceeding the expected $1.12 billion. — Stevens

8:22 am: Zillow Group jumps 14% as revenue beats estimates

Shares of Zillow Group gained more than 14% ahead of Thursday's open after the company reported revenue of $944 million for the fourth quarter. According to estimates from FactSet, analysts had been calling for $814.6 million in sales. In the same quarter a year earlier, the company reported $365.3 million in revenue. As the online real estate company moves into buying and selling homes, the company said it earned $603 million in its homes segment. — Stevens

8:19 am: L Brands slides 14% as Sycamore Partners says it will acquire majority stake in Victoria's Secret

Private equity firm Sycamore Partners will acquire 55% of Victoria's Secret for roughly $525 million, while L Brands will retain the remaining 45%, the companies announced Thursday. L Brands founder, Les Wexner, will step down as CEO and chairman of L Brands, though he will stay on its board. —Stevens

8:15 am: Morgan Stanley to acquire E-Trade for $13 billion

Morgan Stanley has agreed to buy E-Trade in a $13 billion all-stock deal, the companies said on Thursday. The investment bank will pay $58.74 a share in stock for E-Trade, and the deal is expected to close in the fourth quarter of 2020. The takeover is set to bring together $3.1 trillion in client assets. Morgan Stanley shares fell more than 4% in premarket trading. E-Trade shares jumped about 23% to $55.16. —Li

8:11 am: Stock futures fall, S&P 500 and Nasdaq to slip from record highs

Stock futures are falling on Thursday as Wall Street is set to take a breather following a record-setting session. S&P 500 and Nasdaq 100 futures both indicate declines of 0.2% at the open. Dow Jones Industrial Average futures were down 43 points. The S&P 500 and Nasdaq hit record highs in the previous session, led by a rally in tech shares. However, lingering worries over the coronavirus tempered sentiment on Thursday. —Imbert

— With reporting by Bob Pisani, Christopher Hayes, Jesse Pound, Thomas Franck, Michael Sheetz, Michael Bloom, Matt Belvedere, Nate Rattner, Jeff Cox and John Melloy.

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