Stock market updates Wednesday: Dow down 2,000 this week, Gundlach blames Sanders

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Stocks failed to rebound from deep losses as coronavirus fears continued to grip Wall Street. The Dow finished the volatile session 122 point lower, bringing its week-to-date fall to 2,031 points. The 30-stock benchmark was up 461 points at one point Wednesday, but headlines about the fast-spreading epidemic triggered more selling. The S&P 500 fell another 0.3%, after suffering its first back-to-back 3% losses since 2015. The Nasdaq eked out a 0.3% gain, lifted by a 5.3% rise in Netflix shares and 1.5% gain in Apple, but it is still down more than 6% on the week.—Li

The bond market continues to sound the alarm on the global economy with the the 10-year Treasury yield falling three basis points to 1.304%, just below its last record low reached on Tuesday of 1.307%. It may be hard for equities to rebound with bond yields sending signals that trouble is still ahead. Bank of America fell into the red as bond yields rolled over. —Melloy

Bell Curve Trading's Bill Strazzullo said on CNBC's "Power Lunch" he thought the market had further to fall. He said he would advise investors to watch the Cboe Volatility Index and wait for it to decline before buying back into the market. The index is currently trading at 28.3, and, before this recent pullback, had not closed above 20 since October.
"I'd like to see the VIX back below 20 for at least a week. That would tell me that, given all these factors, the market at least on an aggregate basis is comfortable with them, and we should get back to more normal trading patterns," Strazzullo said. —Pound

With roughly one hour left in the trading session, the Dow was down more than 100 points after rallying 461 points earlier in the day. The S&P 500 also traded lower while the Nasdaq clung on to small gains. The market's initial rally was thwarted by a drop to fresh record lows on the 10-year yield as investors fretted over the possibility of the coronavirus spreading even further. —Imbert

The Russell 2000 slid more than 1% on Wednesday, putting the index less than one percentage point away from correction levels. It's currently trading 9.3% below its 52-week high from Jan. 17. The key number to watch is 1,543.57 – below that, and the index will enter correction territory. The index is on pace for its fourth straight negative session, and its worst week since Dec. 2018. – Stevens, Francolla

Traders are now pricing in a better than even chance that the Federal Reserve cuts interest rates three times this year. Despite recent statements from policymakers that they are content with policy as it stands, the fed funds futures market Wednesday afternoon indicated a 51.6% probability of three moves. Fed Vice Chairman Richard Clarida reiterated the wait-and-see approach in a speech Tuesday, though he noted that officials would "respond accordingly" if conditions change. – Cox

The Dow fell to its low of the day in afternoon trading, falling more than 150 points. The S&P 500 and Nasdaq also hit their session lows. Traders appeared to be buying and selling stocks in volatile fashion as headlines concerning the coronavirus were released. The speed of the moves hinted that it could be computer trading driving the action. —Imbert

The number of stocks trading lower at the New York Stock Exchange was slightly higher than those advancing, FactSet data shows. Just over 1,500 stocks traded lower at the NYSE while around 1,340 names traded higher. This comes even as the major U.S. stock indexes traded slightly higher, recovering some ground from a steep two-day sell-off. —Imbert

Buybacks are definitely helping to support the markets today. In the past two days, buyback activity on the Goldman Sachs buyback desk has increased 250% compared to the 2020 average year to date, according to a source there. —Pisani

CNBC's Jim Cramer says anyone looking to buy Disney should take advantage of Wednesday's pullback. Shares of the company slid more than than 2% in the first day of trading after Bob Iger stepped down as CEO. "If you're going to buy Disney, why wouldn't you start here?" Cramer said on CNBC's "Halftime Report." "Let's say our viewers want to have a 500 share position … How about 100 shares?" Cramer said earlier today that investors should start buying after two days of coronavirus-related declines. - Stankiewicz

"If the stock market reversal is due exclusively to the virus then why is United Healthcare down far more than the S&P? Why is healthcare as a sector broadly not outperforming? Answer to those questions: the market is digesting a better than 50% chance of Bernie Sanders getting the nomination," Jeffrey Gundlach, DoubleLine Capital CEO and Wall Street "Bond King," wrote in an email to CNBC's Scott Wapner on Wednesday. – Fitzgerald

Almost immediately after turning negative, the Dow reversed course to turn positive again, jumping more than 100 points in quick succession as the market digests the latest coronavirus headlines. - Stevens

The Dow turned negative, giving back its earlier gain of 461 points. - Stevens

The 10-year Treasury yield turned lower, hovering near its all-time low, as investors remained on high alert about the deadly coronavirus. The benchmark yield, which moves inversely to price, fell one basis point to around 1.324% around midday. The rate was about 3 basis points higher earlier in the session. Yields erased early gains even after data showed new home sales jumped to the highest level since 2007. - Li

The Dow has given back a large portion of its early gains and is now up just 61 points, or 0.2%, as the U.S. Food and Drug Administration said the coronavirus is on the cusp of a becoming a pandemic. The S&P 500 is up 0.2% and the Nasdaq is up 0.5%. - Stevens

Around midday, the major U.S. stock averages were trading sharply higher as they recovered some of the steep losses suffered in the previous two sessions. The Dow is up more than 300 points, or 1.2%. The S&P 500 and Nasdaq are also up more than 1% each. Those gains come after the S&P 500 had its worst two-day stretch in more than four years. —Imbert

Frank Gretz, a technical analyst at Wellington Shields, said he doesn't think the market has reached a bottom yet and is not a believer in this morning's rally. "I never like to see the market open higher when it's been in a downturn. I'd rather see them hit them at the beginning and then rally in the afternoon," Gretz said. "So I'm a little skeptical about today on that basis. I'm a little skeptical because I don't think we're quite to all the extremes we need in terms of making a bottom, but we're getting there." — Pound

Moderna surged more than 20% to hit an all-time high, after gaining 27.8% just on Tuesday. The rally came after the biotech company said it had shipped a coronavirus vaccine to U.S. government researchers for study. Moderna is hoping for a clinical trial by the end of April. The company went public on Dec. 7, 2018 at $23 per share and is up 26% from its IPO price. —Francolla, Li

Shares of Apple popped more than 3% in morning trading, continuing the stock's rebound out of correction territory. Apple through Tuesday was down 12% from its recent high on worries about the impact of the coronavirus on its quarterly revenue. Shares of streaming platform Netflix rallied more than 5%, after dropping more than 2% on Tuesday. –Fitzgerald

Canaccord Genuity's Tony Dywer weighed in before the market open on the potential for a pop like the one we are seeing Wednesday. "Expect pop then [a] test of the low. We have seen this before – maybe not the COVID-19 virus – but an event that puts global growth into question and creates an extreme selloff," wrote Dywer in a note. "The recent history of such dramatic market swoons reinforces our view the market is likely to see a sharp oversold rally that could be relatively significant but ultimately temporary." — Melloy

Bank of America does not think it's quite time to step in just yet. Savita Subramanian, the firm's chief U.S. equity and quant strategist, said she's "still neutral, but if correction continues, buy" in a note. Subramanian is maintaining her S&P 500 3,300 year-end target, which is about 4% higher from where it is now. But the strategist notes that technical factors and supply chain disruptions from the coronavirus suggest the washout has a little further to go. She also said that the Treasury market is pricing in 50 basis points of Fed rate cuts this year.— Melloy

CNBC's Jim Cramer said he is now less negative about the coronavirus and suggested investors put cash to work Wednesday. "I came into this thing hating things. I don't hate them as much," he said, citing the recent comments about a potential vaccine from Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases. "Let's say you have 20% cash, you're not going to put 1% to work?" Cramer said. — Stankiewicz

The Dow quickly added to its gains in morning trading, now up 315 points, rebounding from a brutal sell-off earlier this week. Big tech is leading the comeback, with Microsoft and Netflix rising 2.2% and 3.2%, respectively. Apple rose 1.4%, after dipping into correction territory in the previous session.— Li

The Dow climbed about 150 points at the open, recovering a fraction of the losses from this week's monster stock rout. The 30-stock benchmark plunged 1,900 points in just two days amid increasing fears about the coronavirus. The S&P 500 posted back-to-back losses of more than 3%, suffering its biggest two-day drop since 2015. Traders will look for more updates on the epidemic for signal, including a briefing from President Donald Trump this evening.— Li

• HSBC downgraded Nike to hold from buy
• Argus upgraded Domino's Pizza to buy from hold.
• SunTrust downgraded D.R. Horton, PulteGroup, & KB Home to hold from buy.
• Baird named Capital One as a fresh pick.
• Jefferies downgraded SmileDirectClub to hold from buy.

CNBC Pro subscribers can read more here. — Bloom

In the last two sessions the Dow has shed 6.59% — its worst two-day performance since Feb. 2018 — but history shows that two day drops of this magnitude are typically a sign that negative sentiment has become too extreme, too quickly. Looking at performance over the last 30 years, data analytics tool Kensho found that following a drop of more than 6% over two consecutive sessions, 75% of the time the index rallied over the next two weeks, and 88% of the time it rallied over the following month. Outside of the financial crisis, the Dow was higher one month later in every single instance. — Stevens

Shares of Apple are flat in premarket trading after the tech giant dipped into correction territory on Tuesday. Shares have slid 10.98% in the last week as the rising number of coronavirus cases outside of China has spooked investors. In the last four trading sessions Apple has erased $140 billion in market value. Earlier in February the company said it does not expect to meet its prior revenue guidance due to the impact from the coronavirus. — Stevens

Futures on the Dow Jones Industrial Average now rose 100 points, indicating a near 150-point higher open. Stock attempt to come back from its worst two-day rout since 2015. The S&P 500 posted its first back-to-back losses of more than 3% in more than four years, while the Dow has tumbled 1,900 this week on coronavirus fears. — Li

President Donald Trump tweeted on Wednesday he will hold a news conference Wednesday at 6 p.m. to address concerns over the coronavirus outbreak. His tweets came after The Washington Post reported Trump was furious that the stock market was being battered by worries over the coronavirus. —Imbert

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Bank stocks are trading slightly higher as Treasury yields climb from the low levels seen in the previous session. Bank of America and JPMorgan Chase are up 0.2% and 0.4%, respectively, in the premarket. Citigroup and Morgan Stanley are gaining 0.3%. The 10-year Treasury yield is trading at 1.364% after falling to a record low on Tuesday. Lower yields put pressure on banks' profit margins. —Imbert

One of the few beneficiaries of the two-day selloff: huge trading volume. CME (futures) reported record volumes yesterday. CBOE (options, VIX) saw the heaviest day of trading in VIX futures since October 2018, according to Piper Sandler. NYSE volume was 50% higher than normal. Watch market maker Virtu, up 11% this month, which benefits during periods of high trading and volatility. —Pisani

The 10-year Treasury yield climbed on Wednesday, after sinking to an all-time low as investors sought the safety of U.S. government debt amid heightened fears about the fast-spreading coronavirus. The benchmark yield, which moves inversely to price, rose three basis points to 1.359%. The 2-year yield, however, hit a low of 1.157% on Wednesday, its lowest level since Feburary 2017. The short-duration rate is the most sensitive to Federal Reserve's monetary policy expectations. Traders have increasingly priced in a rate reduction at the central bank's April meeting. —Li

UBS notes that the 7% decline in the S&P 500 in three days is the 25th worst since 1950. Strategist Keith Parker believes that stocks are likely to remain volatile over the coming weeks as coronavirus cases outside of China increase, companies lower earnings forecasts and U.S. election primaries cause uncertainty. "Valuation is supportive and growth in Q2 is expected to rebound, but risks remain," the strategist wrote in a note. Parker is advising clients to buy quality and momentum stocks, which tend to outperform in the two months following volatility shocks. —Melloy

Disney shares fell as analysts tried to make sense of Bob Iger's move into the executive chairman role with Bob Chapek taking over as CEO. "This is negative for DIS as DIS's EPS weakness is riskier without Iger's value-creating track record," Needham analyst Laura Martin said. "There is never a great time for succession announcements, but this one is likely to cause particular consternation with investors," Wells Fargo analyst Steven Cahall said. CNBC PRO subscribers can read more here. —Bloom

Shares of Disney fell more than 2% during Wednesday's premarket trading after the company said that CEO Bob Iger would step down, effective immediately, and assume the role as executive chairman. Bob Chapek, who most recently served as chairman of Disney parks, experiences and products, will become the company's new CEO. He will be the seventh CEO in Disney's nearly 100-year history. "I obviously have huge shoes to fill," Chapek told CNBC's Julia Boorstin on "Closing Bell" Tuesday. "Bob's legacy in the company is just profound. I think my role is not to take the strategic pillars he's so well established over the last 15 years and continue to work on those and implement those in the marketplace, most importantly our direct-to-consumer initiatives, but at the same time look around the corner for what disruption might be going on in the marketplace that would necessitate a fresh look at those things." —Stevens

South Korea reported 169 new coronavirus cases overnight, bringing the country's total to more than 1,100. The number of coronavirus cases in Italy has broken above 300, with some being reported outside of the original epicenter in the north. Meanwhile, China confirmed 406 new cases along with 52 deaths. —Imbert

U.S. stock futures are flat on Wednesday as investors try to recover some ground following steep back-to-back losses. Dow Jones Industrial Average futures are up 11 points, indicating a gain of 64 points at the open. Trading was volatile. The S&P 500 is coming off its worst two-day slide in four years while the Dow posted consecutive losses of more than 800 points for the first time ever on Tuesday. Investors around the world have been dumping stocks in favor of bonds amid concerns over a possible economic slowdown due to the coronavirus. —Imbert

With reporting from John Melloy, Bob Pisani, Kevin Stankiewicz, Yun Li, Jesse Pound, Maggie Fitzgerald, Jeff Cox and Gina Francolla.

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