Markets

Stock market live Tuesday: Dow falls nearly 800, Fed rate cut backfires, 10-year below 1%

The Fed just enacted a surprise interest rate cut to combat coronavirus outbreak—Here's what five experts say investors should watch now
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The Fed just enacted a surprise interest rate cut to combat coronavirus outbreak

It was a volatile session for stocks, with the Dow moving between triple digit gains and losses. The Federal Reserve announced an emergency rate cut of 50 basis points – its first unscheduled cut since the financial crisis – and while Chairman Jerome Powell said the economy remains "strong," stocks sold off as some on the Street wondered if things are worse than they might seem.

  • Dow session high: +381.27 points
  • Dow session low: - 997.04 points

Here's the latest:

4:19 pm: Market sell-off by the numbers

  • S&P closed down -2.81% for its 8th negative day in 9
  • S&P is 11.5% below its intraday all-time high of 3,393.52 from Feb. 19
  • Dow closed down -2.94% for its 8th negative day in 9
  • Dow is 12.35% below its intraday all-time high of 29,568.57 from Feb. 12
  • Sectors: 11 out of 11 sectors were negative led by tech down -3.79%
  • 7 out of 11 sectors closed in correction levels
  • Energy closed 32.48% below its April 23rd 52-wk high of 507.26 in bear market levels
  • Financials closed 13.82% below its Jan 2nd record close
  • Industrials closed 13.68% below its Feb 12th record close
  • Tech closed 12.55% below its Feb 19th record close
  • Materials closed 11.43% below its 52-wk high close
  • Consumer Discretionary closed 11.69% below its Feb 19th record close
  • Communication Services closed 11.14% below its Feb 19th 52-wk high close
  • US 10-year note hit a record low of 0.906%

4:03 pm: Stocks plummet in volatile session 

Stocks finished the day sharply lower, marking a reversal from Monday's surge which saw all the major averages post their largest point gain in history. The Dow fell 785 points, or 2.94%, while the S&P 500 and Nasdaq fell 2.8% and 3%, respectively. Earlier in the session stocks rallied after the Federal Reserve announced an emergency 50 basis point rate cut, but markets couldn't hold onto the gains and stocks moved lower throughout the day. At the session low, the Dow dropped 997.04 points. The yield on the U.S. 10-year Treasury also broke below 1% for the first time ever as investors piled into the so-called safe haven asset. - Stevens

3:46 pm: Stock swings weigh on traders' psyche

The crazy market volatility is starting to wear on the psyche of market traders. The Dow has moved more than 1,000 points intraday in four of the last six sessions. "The market has become uninvestible," Joe Zicherman from Stadium Capital told CNBC's Bob Pisani. "You cannot manage money on an active basis when the Dow is up 1,000 one day, and then down 1,000 the next day." Another active trader said he was simply reducing the size of his portfolio: "I'm bringing down my gross," he said. "I'm shrinking my long and short positions." That "de-grossing," as traders refer to it, will ultimately serve to reduce market volatility down the road, but for the moment the head spinning trading, and the inability to correctly interpret the Fed's moves (ahead of the curve? Needlessly wasting bullets?) has traders anxious and nervous. - Pisani

3:29 pm: Former Fed governor Mishkin praises rate cut

Frederick Mishkin, who served as a Fed governor from 2006 to 2008, praised the central bank's emergency rate cut on "Closing Bell," saying that the cut was proactive and shows that the Fed has learned some of the lessons from the financial crisis. "The Fed understands that even before the data actually shows that there is a problem, that this shock is going to effect the economy in a negative way. You've got to get out ahead of it. So in this case, I think the messaging was spot on and I think the action was spot on as well," Mishkin said.  — Pound

3:02 pm: Final hour of trading

Heading into the final hour of trading stocks are sharply lower, although off the worst levels of the day. The Dow is down 671 points, or 2.5%, while the S&P 500 and Nasdaq have shed 2.3% and 2.6%, respectively. Bank stocks and tech names are dragging the market lower. Real estate is the only S&P sector currently in the green. - Stevens

2:47 pm: Financial stocks under pressure

The SPDR S&P Bank ETF (KBE) is down more than 4%, and on pace for its worst daily performance since March 2019, and is on track for its seventh negative session in eight. The SPDR S&P Regional Banking ETF (KRE) is also down more than 4%, and on track for its worst day since Dec. 2018. - Stevens, Francolla

2:06 pm: All major averages down more than 3%, Dow sinks more than 900 points

Losses accelerated in late afternoon trading, with the Dow falling more than 950 points, or 3.6%. The S&P 500 and Nasdaq are down 3.3% and 3.6%, respectively. - Stevens

1:50 pm: Stocks sink to session lows

As the yield on the U.S. 10-year Treasury broke below 1% for the first time ever, stocks fell to fresh session lows. The Dow plummeted more than 750 points, giving back more than half of Monday's gains. The S&P 500 and Nasdaq are down 2.6% and 2.8%, respectively. - Stevens

1:45 pm: 10-year Treasury yield falls below 1% for the first time

The 10-year Treasury yield broke below 1% for the first time ever in the wake of an emergency rate cut by the Federal Reserve to combat the economic effects of the spreading coronavirus. The yield on the benchmark 10-year Treasury note fell more than 7 basis points to a record low 0.997%. The yield on the 30-year Treasury bond was also at a record low of 1.601%. - Li

1:26 pm: Stocks fall to session lows, Dow plummets more than 600 points

Stock losses accelerated in early afternoon trading. The Dow is down 657 points, or 2.3%, while the S&P 500 and Nasdaq are down 2% and 2.2%, respectively. The plunge follows an emergency rate cut from the Federal Reserve.  - Stevens

1:10 pm: Bank of America is predicting additional rate cuts

"We think the Fed will cut further, delivering another 50bp of cuts in H1. The timing of those cuts is challenging due to the uncertain outlook for economic data, markets, and the virus," Bank of America strategists led by Michelle Meyer wrote in a note to clients following the Fed's emergency cut. "Our baseline is that the Fed will cut another 25bp at the upcoming meeting on March 18th followed by a 25bp cut in April. The Fed seems committed to frontloading cuts, acting aggressively and forcefully. The market is also pressuring the Fed by pricing in over a 70% probability of a March cut; the Fed won't fight it." - Stevens

12:34 pm: El-Erian says Fed's mixed signals on need for rate cut highlights 'massive communication problem' 

Economist Mohamed El-Erian said the Federal Reserve's explanation for its emergency interest rate cut exposed a "massive communication problem." The 50-basis point cut signals the coronavirus is "an emergency situation," the chief economic advisor at Allianz said on CNBC's "Halftime Report." But on the other hand, he noted the central bank also said the fundamentals of the U.S. economy remain strong, suggesting it was an "insurance cut." "This is a no-win situation for policy makers," he said. - Stankiewicz

12:29 pm: Dow back in correction territory

After the Dow surged 1,294 points on Monday the index exited correction territory, but the move appears to have been short-lived. With Tuesday's more than 300-point decline the index is back in correction territory, or more than 10% below its recent high. - Stevens

12:21 pm: SPY volume already surpasses 30-day average

The SPDR S&P 500 ETF Trust (SPY), a widely traded ETF that tracks the broader U.S. stock average, has already seen larger-than-normal volume. By midday, the ETF had traded more than 130 million shares. That's well above its 30-day average volume of 103.4 million. The volume spike comes after the Fed cut rates by 50 basis points in an effort to stem an economic slowdown from the coronavirus. — Imbert, Francolla

12:15 pm: Just how rare is an unscheduled rate cut?

The Federal Reserve announced an emergency rate cute of 50 basis points as the coronavirus outbreak continues to roil global markets. This is the first time since the financial crisis in 2008 that the Fed has implemented an unscheduled rate cut. - Stevens

11:50 am: 10-year Treasury yield nears 1%

The 10-year Treasury yield is threatening to break 1% for the first time ever after the Fed slashed rates. The yield on the benchmark 10-year Treasury note fell more than 5 basis points to a record low of 1.026%. The yield on the 30-year Treasury bond was also at a record low of 1.633%. The dive in bond yields is hurting bank stocks and raising concerns about the health of the overall economy. — Melloy

11:49 am: Fed cut is wrong approach to fight virus, former Morgan Stanley economist says

Stephen Roach, the former chief economist at Morgan Stanley and the former chairman of Morgan Stanley Asia, said on "Squawk on the Street" that the Federal Reserve rate cut is not the right tool to help the economy during the coronavirus outbreak. "I really think they're like a fish out of the water here. They have no idea how to contain or even to understand what may be about to happen in the public health area or the U.S. economy's response to that," Roach said. — Pound

11:47 am: Cramer says Fed rate cut makes him more nervous about COVID-19 

CNBC's Jim Cramer said the Federal Reserve's emergency rate cut on Tuesday makes him more concerned about the economic risks from the coronavirus. "It's great that the Federal Reserve recognizes that there's going to be weakness, but it makes me feel, wow, the weakness must be much more than I thought," Cramer said on "Squawk on the Street." Cramer also said he's increasingly worried about how small and medium-sized businesses would be impacted by the outbreak. - Stankiewicz

11:46 am: Target drops more than 3% after first revenue miss in 3 years

Shares of Target slid more than 3% after the company reported mixed results for the fourth quarter. Adjusted earnings per share came in at $1.69 which was ahead of the $1.65 analysts polled by Refinitiv had been expecting, although the retailer's $23.40 billion in revenue missed estimates of $23.50 billion. This was the first time in 3 years that the company missed revenue estimates, and the same-store sales growth of 1.5% was the weakest in more than 2 years. - Stevens

11:34 am: 'Panicky move' by Fed?

"Listening to Jay Powell and it's evident that the key goal of sharply cutting rates was to ease financial conditions due to the acknowledgment that rate cuts are not a vaccine to the virus," wrote Peter Boockvar, chief investment officer at Bleakley Advisory Group. But "financial conditions only ease if market participants are confident enough to take risk, but because of the huge economic unknowns right now still, investors will remain risk averse thus diluting the impact of this move.... As for encouraging higher consumer and business confidence, this type of panicky move, when the Fed has only 4 more rates to cut, I believe does the exact opposite." - Melloy

11:25: Dow falls 500 points

Following Fed Chair Powell's press conference, stock losses accelerated. The Dow is now down more than 500 points, or nearly 2%. The S&P 500 is down 1.7%, and the Nasdaq has shed 1.5%. Today's fall is a sharp contrast to Monday, when the Dow surged 1,294 points. - Stevens

11:21 am: Powell says 'never going to consider any political considerations whatsoever'

"It's very important that people understand that we will always make our decisions based on the thinking we have, based on what we learn from our outreach to businesses, non-profits and educational institutions that we get every cycle from our reserve banks. We are always going to make our decisions in the interest of American people to carry forward and achieve our mandates. We are never going to consider any political considerations whatsoever," Fed Chair Powell said. - Li

11:15 am: Markets 'functioning in an orderly manner'

"The economy continues to perform well … Financial markets are functioning in an orderly manner… We, the supervisors, will be working with banks to assure they work with their borrowers … I can imagine us doing those sorts of things but those things are not upon us at the moment," Powell said. - Li

11:12 am: U.S. economy is 'strong'

Fed Chair Powell said that amid the coronavirus outbreak, and despite the decision to implement an emergency rate cut, the fundamentals of the U.S. economy remain strong.  - Stevens

11:08 am: Powell says the Fed saw 'a risk to the outlook for the economy and chose to act'

Federal Reserve Chairman Jerome Powell held a news conference Tuesday following the central bank's decision to cut overnight interest rates by half a percentage point. The move took the Fed's benchmark rate to a target range between 1%-1.25% and was the first intermeeting action since December 2008, during the financial crisis.

"What changed really was … over the course of the last couple of weeks we've seen a broader spread of the virus. We've seen it began to spread a bit here the United States. For us, what really matters is … the risk to the economy, and we saw a risk to the outlook for the economy and chose to act," he said. - Li, Stevens

10:50 am: Evercore ISI on the rate cut

"Our best guess is that if incoming information relating to the virus and its impact on the US and global economy remains adverse the Fed will deliver another couple of 25bp rate cuts in the coming meetings before assessing in June whether the outlook is starting to stabilize or recessionary dynamics are starting to take hold," wrote Evercore ISI's Krishna Guha and Ernie Tedeschi. - Melloy

10:48 am: Citi on the rate cut

"The action is if anything a bit earlier and larger than what economist consensus and markets had expected, which should be positive for risk assets," wrote Citi's Andrew Hollenhorst. "Moreover, it will be viewed as likely to be followed by accommodation from other central banks globally."

"We would not be surprised by additional easing in March or April," Citi added. - Melloy

10:45 am: In tweet President Trump calls for more rate cuts

President Trump urged the Federal Reserve to take additional action, writing in a tweet "more easing and cutting!"

Tweet

10:44 am: Homebuilders rise after rate cut

Major homebuilder stocks spiked on Tuesday morning after the Federal Reserve's surprise rate cut. Shares of Lennar gained 4.8%, while PulteGroup, D. R. Horton and KB Home were all trading more than 3% higher.  — Pound

10:27 am: Dow rises more than 100 points in volatile session 

In a volatile trading session that's seen the Dow whiplash between triple-digit gains and losses, the major averages are once again higher as the Street digests the Federal Reserve's emergency rate cut. The Dow is up 111 points, or 0.4%, while the S&P and Nasdaq are each up 0.6%. – Stevens

10:20 am: Stocks give back gains, Dow falls triple digits

Stocks rallied immediately after the Federal Reserve announced an emergency rate cut, but the major averages quickly gave back those gains to turn negative once again. The Dow is now down 100 points. – Stevens

10:12 am: Bank stocks under pressure

Bank stocks came under pressure as the Federal Reserve announced a rate cut. Financials is the only negative S&P 500 sector, with JPMorgan, Wells Fargo and Bank of America each down more than 1%, while Morgan Stanley, Goldman Sachs and Citigroup are also trading lower. Tech stocks, however, are getting a boost. Apple, Netflix, Alphabet and Amazon are all up more than 1%. – Stevens

10:00 am: Fed cuts rates by 50 basis points

Stocks jumped with the Dow up nearly 200 points after the Federal Reserve said it was cutting rates by half a percentage point to combat the coronavirus slowdown. – Stevens

9:58 am: Stock losses accelerate

The major average are all down more than 1%, with the Dow falling more than 350 points at the low. – Stevens

9:54 am: Transports still in correction

Despite Monday's stock surge, transport stocks are still feeling the pain. All 20 components in the Dow Transportation Average are in correction territory, or more than 10% below recent highs. – Francolla, Stevens

9:35 am: Dow falls triple digits

After opening higher, the Dow quickly reversed course, and is now down more than 200 points. – Stevens

9:32 am: Stocks open flat as Street hopes for action from the Fed

Stocks opened little changed as investors continue to hope for stimulus from the Federal Reserve, despite the G-7's disappointing statement that didn't outline any specific actions. The Dow Jones Industrial Average fell 25 points, or 0.09%, while the S&P 500 and Nasdaq were down 0.3% and 0.13%, respectively. – Stevens

9:08 am: Here are Tuesday's biggest analyst calls

  • JMP upgraded Tesla to outperform from market perform.
  • Deutsche Bank upgraded UPS to buy from hold.
  • Wells Fargo lowered its price target on Disney to $155 from $180.
  • Needham added Uber to its conviction list.
  • Bank of America downgraded Anheuser-Busch InBev to neutral from buy.
  • Piper Sandler upgraded Advanced Micro Devices to overweight from neutral.

CNBC PRO subscribers can read more here– Bloom

8:49 am: Dow set to drop more than 200 points as NYC school reportedly closes due to coronavirus

After briefly rallying off the worst levels of the day, U.S. stock futures extended declines and are now pointing to a triple digit loss. The Dow is set to open more than 200 points lower after a New York City high school reportedly closed due to a suspected