Stock market live Tuesday: Stocks fall in volatile session, FANG in the red, retailers surge

The biggest technology stocks halted their recent strong rally and turned sharply lower on Tuesday, putting pressure on the broader market. Stocks traded higher at certain points throughout the day on hopes that the economy will soon reopen, but ultimately the gains didn't hold and stocks finished the day lower. Earnings letdowns and guidance withdrawals amid the pandemic were among the factors hurting investor sentiment.

This is a live blog. Here's what happened.

• S&P closed down 0.52% for its first negative day in three
• S&P is 15.6% below its intraday all-time high of 3,393.52 from Feb. 19
• Dow closed down 0.13% for its first negative day in five
• Dow is 18.49% below its intraday all-time high of 29,568.57 from Feb. 12
• Nasdaq Composite closed down 1.4% for its 1st negative day in 3 and its worst day since Apr 21st
• Nasdaq Composite is 12.5% from its intraday all-time high of 9,838.37 from Feb. 19
• Russell 2K small caps closed up 1.26% for its 5th straight positive day and 5th straight gain above 1% for the first time since Sep 2009
• 7 out of 11 sectors were positive led by Energy up 2.19%

After spending parts of the day in positive territory stocks couldn't hold onto gains and ended the session in the red. The Dow dropped 32 points for a loss of 0.13%, while the S&P 500 and Nasdaq Composite fell 0.5% and 1.4%, respectively. The tech-heavy Nasdaq was dragged lower by a 3% drop in Alphabet, as well as Netflix shares' 4% decline. — Stevens

Former Goldman Sachs president and COO Gary Cohn said on "Closing Bell" that the combination of low interest rates and fear of rising defaults was weighing on bank stocks.

"The margins that you're going to make on lending with interest rates as low as they are are going to be tough. And look, there are going to be a lot of loan loss reserves taken. Remember, the lending business is not a risk-free business, and we get reminded of that every cycle," Cohn said.

Cohn said investment banks could earn revenue as more companies tap the debt markets, but that he was unsure there would be opportunities in the equity markets and the mergers and acquisitions space.

Cohn also said that he didn't think any major banks made significant profits during last week's historic oil plunge, saying he thought they would have already exited that market ahead of the May oil contract expiring. — Pound

The iShares U.S. Home Construction ETF (ITB) jumped more than 7%, and was on track for its fifth straight day of gains. D.R. Horton jumped more than 11%, while Lennar, PulteGroup and KB Home were all up more than 7%. The ITB is up 25% this month, putting it on track for its best month since April 2009. – Francolla, Stevens

With roughly one hour left in the trading session, the Dow was on pace to post its fifth consecutive daily gain as investors cheered the prospects of reopening the economy. The 30-stock average traded about 49  points higher, or 0.2%. It would be the Dow's longest winning streak since January. The S&P 500 gained 0.1% while a decline in the so-called FAANG stocks pushed the Nasdaq Composite lower by 0.8%. —Imbert

Oil alternated between gains and losses in a volatile trading session that at one point saw U.S. crude drop more than 20%.

Traders continue to eye dwindling storage capacity worldwide, although some of the losses were offset by optimism around reopening of economies.West Texas Intermediate futures for June delivery fell 44 cents, or 3.4%, to settle at $12.34 per barrel, while international benchmark Brent crude gained 47 cents, or 2.35%, to settle at $20.46. Earlier WTI had been down more than 20%, touching a session low of $10.07, while also trading as high as $13.69. — Stevens 

The Russell 2000 was running well ahead of other U.S. indexes in the early afternoon, gaining about 1.9%. The index more than doubled the S&P 500 yesterday, gaining 3.96% compared with 1.47% for the large cap index.

But that type of outperformance is usually short-lived, said Frank Gretz, technical analyst at Wellington Shields

"What happened yesterday was the Russell 2000, the small-cap index, was up twice as much as the S&P. Which is very rare, and when that happens, they usually cool off for a couple of weeks," Gretz said. — Pound

The S&P 500's 5% rally over the past week has been led by some of the hardest-hit names during the coronavirus sell-off. PVH Corp. the parent company of Tommy Hilfiger and other brands, is up over 32% in the past week, Expedia Group has rallied over 26% in that time period while Capri Holdings is up nearly 30%. These stocks all took a massive hit as the coronavirus pandemic curbed discretionary and travel spending. They are still sharply lower for the year.

There are the other stocks leading the one-week rally and how they are faring for 2020. —Imbert, Rattner

Steve Odland, The Conference Board CEO, said on "The Exchange" that consumers seem to expect a fairly quick economic recovery. Consumer confidence fell to 86.9 in April, down from 118.8 the month before.

However, 40% of consumers said they expect business conditions to be better in six months, up from 18.7% in March. The survey ended on April 17, when ballooning unemployment numbers and predictions of significant declines in GDP growth were widely known.

"These are really stunning numbers, but the consumers think 'hey, we're going to get out of this,'" Odland said.

Odland said governments need to move quickly to allow businesses to open outside of coronavirus hot spots to ensure that the economy avoids a long, protracted recovery. — Pound

Facebook, Amazon, Netflix, Alphabet — The so-called FANG stocks fell as investors appear to be rotating into the riskier bets on reopening the economy like retailers and out of the prior bull market's leaders. Streaming giant Netflix fell nearly 3.5%. Amazon ticked 2.5% lower. Facebook and Google-parent Alphabet both fell about 1%

Merck — Shares of Merck fell nearly 4% to become the biggest loser in the 30-stock Dow after the drug maker cut its 2020 forecast due to the uncertainties from the coronavirus pandemic. "The company has assumed the majority of the negative impact will be in the second quarter," Merck said in a statement. The company did report sales of $12.1 billion in the first quarter, an increase of 11%, driven by strong growth in its cancer-fighting treatment Keytruda.

Keurig Dr Pepper — Shares of the beverage company rose nearly 8% on Tuesday after reporting better-than-expected results for the first quarter. The company said its packaged beverages segment saw volume gains at the end of the quarter as consumers stocked up. The company reported 29 cents in adjusted earnings per share and $2.61 billion in revenue, above the 27 cents of earnings per share and $2.55 billion expected by analysts, according to Refinitiv. Keurig Dr Pepper also reaffirmed its full-year guidance.

Click here to read more about midday movers. — Fitzgerald

Wall Street analysts are sticking by Alphabet but urging investors to use caution when the company reports its first quarter earnings after the bell on Tuesday. "We believe that an OUTPERFORM rating is warranted given valuation upside and an unrivalled collection of high-profile and omnipresent core products and platforms," Wedbush said. Mizuho was a bit more sanguine in its preview note to clients. "We believe the stock will likely be under pressure in the NT due to negative Street revisions and would be buyers on any weakness post the quarter," they said. — Bloom

The economy could take one to two years to rebound to full strength and the Federal Reserve and Congress, having already committed historic sums to fight the coronavirus pandemic, will have to commit trillions more, according to respondents to the CNBC Fed Survey. With the Fed's balance sheet already at an unprecedented $6.45 trillion, the 36 respondents see it rising on average to $9.8 trillion. The additional trillions will be added by the end of the current quarter, the respondents expect. Congress, having already committed about $2.5 trillion, is seen putting in an additional $2 trillion. — Steve Liesman

The biggest mall owner in the U.S. is preparing to open a number of its properties across the country, as states like South Carolina and Georgia start to reopen during the coronavirus pandemic, according to an internal memo that was obtained by CNBC. Simon Property Group is reopening 49 of its malls and outlet centers between May 1 and May 4, the memo said, including Haywood Mall in Greenville, South Carolina, and Lenox Square in Atlanta. — Lauren Thomas

The Dow Jones Industrial Average went negative around 11 am ET on Tuesday. The 30-stock average gave up a 378 point gain from earlier in the session. The Dow last traded down about 50 points. All three major average are in the red. —Fitzgerald 

U.S. equities gave back most of their gains in morning trading as technology giants continued to fall. The Dow Jones Industrial Average, which was up more than 370 points at its high, is now only up about 50 points. The S&P 500 is in the green but the tech-heavy Nasdaq Composite slipped into negative territory. —Fitzgerald 

Shares of major U.S. banks rose on Tuesday in early trading on hopes that if the economy reopens faster-than-expected, banks will take fewer credit losses as borrowers catch up on payments. Shares of Bank of America jumped nearly 5%. JPMorgan and Goldman Sachs both rose more than 2%. Citigroup jumped 4% and Wells Fargo gained about 3.5%. — Melloy, Fitzgerald 

Shares of oil tanker stocks traded higher on Tuesday amid ongoing fears that worldwide crude storage will soon reach capacity. Nordic American Tankers led the group higher, jumping more than 13% and bringing its return over the last month to 102%. Teekay Corporation rose more than 3%, while Scorpio Tankers traded modestly higher. - Stevens

Jim Cramer said on "Squawk on the Street" that all public companies should pull guidance due to the uncertainty around the economy caused by the coronavirus pandemic. Many companies, including 3M on Tuesday morning, have withdrawn full-year guidance because of uncertainty about how long major swaths of the economy will be shutdown. Cramer said some of the companies may also take the chance to stop giving guidance even in future quarters, similar to how Berkshire Hathaway operates. "This is the greatest opportunity for these companies to say, you know what, I'm done giving guidance. I'm going to go the Warren Buffett way," Cramer said. — Pound

Weakness in the so-called FANG stocks capped the market's gains on Tuesday. Investors in recent days appear to be rotating into the riskier bets on reopening the economy like retailers and out of the prior bull market's leaders — Facebook, Amazon, Netflix and Google-parent Alphabet — which have held up well during the pandemic. All four tech giants were down again on Tuesday. The biggest loser on Tuesday was streaming giant Netflix, which fell nearly 3%. — Melloy

Oil turned positive in mid-morning trading Tuesday, reversing a more than 20% loss earlier in the session as reopening of economies outweighed fears about dwindling storage capacity worldwide. West Texas Intermediate futures for June gained 61 cents, or 4.7%, to trade at $13.31 per barrel, while international benchmark Brent crude traded $1.11, or 5.4%, higher at $21.08. Earlier WTI had been down more than 20%, touching a session low of $10.07. Tuesday's jump is a sharp reversal to Monday's trading session, which saw WTI tumble 24.56%. – Stevens

Shares of retail stocks led the market higher for a second day as hopes that a partial reopening of the economy will save the battered industry. Shares of Gap and JCPenney both surged more than 10% in early trading. Nordstrom and L Brands rose 6.5% and 7.8%, respectively. Apparel company PVH soared 11.5%, bringing its week-to-date gain to nearly 30%. Discount retailers also saw sharp increases. Dillard's rose 10.5% and Ollie's Bargain Outlet jumped more than 5%. Dollar Tree and Dollar General rose 2.8% and 1.2%, respectively. — Fitzgerald 

• Morgan Stanley upgraded Quest Diagnostics to overweight from equal weight.
• UBS downgraded Johnson & Johnson to neutral from buy.
• Guggenheim downgraded Roku to neutral from buy.
• Compass Point downgraded Square to sell from neutral.
• Jefferies downgraded Ferrari to underperform from hold.
• Benchmark upgraded IMAX to buy from hold.
• Wells Fargo upgraded Six Flags to equal weight from underweight.
• Citi downgraded Regeneron to neutral from buy. — Bloom

U.S. equities rose at the opening bell on Tuesday — adding to Monday's gains — fueled by hopes of a partial reopening of the economy. The Dow Jones Industrial Average jumped 350 points, or 1.5%. The S&P 500 rose 1.4% and the Nasdaq Composite gained 0.97%. — Fitzgerald

Treasury Sec. Steve Mnuchin said on "Squawk Box" that loans for more than $2 million or more through the Payroll Protection Program will undergo a "full audit" before they can be forgiven. "We're going to do a full audit of every loan over $2 million. This was a program designed for small businesses. It was not a program that was designed for public companies that had liquidity," Mnuchin said.Mnuchin said that the borrowers, not the banks who serviced the loan, will be liable if the audit finds that they received a loan they should not have.— Pound

Treasury Secretary Steven Mnuchin said Tuesday he was surprised that the Los Angeles Lakers took a loan designed to help small businesses weather the coronavirus pandemic. "I'm not a big fan of the fact that they took a $4.6 million," Mnuchin told CNBC's "Squawk Box." "I think that's outrageous." The Lakers were the second most-valuable team in the National Basketball Association entering 2020, with a valuation of $4.4 billion, according to Forbes. —Imbert

Shares of Merck fell 2.4% in premarket trading on Tuesday after the drug maker cut its 2020 forecast due to the uncertainties from the coronavirus pandemic. "The company has assumed the majority of the negative impact will be in the second quarter, with a gradual return to normal operations beginning late in the second quarter and extending through the third quarter, with a full return to normal operations in the fourth quarter," Merck said in a statement. The company did report sales of $12.1 billion in the first quarter, an increase of 11%, driven by strong growth in its cancer-fighting treatment Keytruda. Merck reported adjusted quarterly profit of $1.50 per share, above the $1.22 earned in the same quarter a year ago.– Li

While the Street is focused on oil storage reaching capacity, there are a number of other factors that could send oil prices back into negative territory. The Chicago Mercantile Exchange recently raised its margin requirements for forward oil contracts, which could trigger selling when key levels are reached. Additionally, S&P Dow Jones Indices said that all of its commodity indices will roll out of the June oil contract and into July, joining the United States Oil Fund which is also rolling out of the June contract. On Tuesday West Texas Intermediate, the U.S. benchmark, traded 8.8% lower at $11.66 per barrel, while international benchmark rose 28 cents to trade at $20.27. – Stevens

Dow-member Pfizer gained more than 2% in the premarket on the back of better-than-expected earnings for the first quarter. The company posted a profit of 80 cents a share, topping a Refinitiv estimate of 73 cents per share. Pfizer also reaffirmed its full-year earnings guidance. However, the company's total sales dropped 8% on a year-over-year basis as Pfizer works to find a coronavirus vaccine. —Imbert

Data compiled by BofA Securities showed the bank's clients were net sellers of U.S. equities last week for the first time in four weeks. Overall, they sold more than $1.3 billion in equities last week as the major averages posted their first weekly decline in three. Tech stocks had the biggest outflows, with BofA Securities clients taking $752 million from the sector. Consumer discretionary had an outflow of $223 million. —Imbert, Bloom

Shares of multinational industrial conglomerate 3M rose 3.5% in premarket trading Tuesday after the company said a surge in sales in its personal safety equipment helped grow first-quarter revenues. 3M, the lead producer of key N95 masks, said the Covid-19 outbreak forced it to double global global respirator output to 100 million per month since the beginning of 2020. It reported adjusted per-share earnings of $2.16 on sales of $8.08 billion, growth of 2.7% on a year-over-year basis. —Franck

Caterpillar experienced a sales drop of 21% in the first quarter as the coronavirus pandemic disrupted demand in the construction and mining sectors. The industrial giant on Tuesday reported revenues of $10.6 billion in the first quarter, compared with $13.5 billion in the first quarter of 2019. Caterpillar posted adjusted earnings per share of $1.60 in the first quarter, compared with $3.25 per share in the same quarter a year ago. The company said it is not providing a financial outlook for 2020 at this time given the "continued global economic uncertainty" due to the pandemic. – Li

U.S. stock futures pointed to another strong day of gains as traders increased bets on the reopening of the U.S. economy. Dow Jones Industrial Average futures were up more than 300 points, or 1.4%. S&P 500 and Nasdaq 100 futures were up 1.3% and 1.1%, respectively. Alaska, Georgia, South Carolina, Tennessee and Texas are among the states that have let some businesses resume operations. Wall Street was coming off a strong rally on Monday, with the Dow surging more than 350 points. Oil was lower again, but off the worst levels of the overnight session. — Imbert

With reporting from Yun Li, Jesse Pound, Tom Franck, John Melloy, Michael Bloom and Nate Rattner.

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