The stock market rebounded from Tuesday's late-session sell-off as investors grew more hopeful that the U.S. economy can continue to reopen after the coronavirus-induced shutdown.
Stocks rose on Wednesday with the S&P notching its highest close since March 6 as investors continue to cheer economies reopening. The Dow rose 369 points for a gain of 1.52%. The S&P 500 climbed 1.67%, while the Nasdaq Composite gained 2.08%. For the week the major averages are all up more than 3%. Tech names continued to lead markets higher as Facebook and Amazon rose to record levels, while names that have been among the hardest hit – such as Las Vegas Sands, MGM Resorts and Norwegian Cruise Line – all finished the session in the green. Energy was the top-performing S&P 500 sector, gaining nearly 4%, as a jump in oil prices boosted names in the industry. –Stevens
Shares of Disney, SeaWorld Entertainment and NBC-parent company Comcast jumped 3%, 9% and 2%, respectively, on Wednesday, ahead of the companies presenting their re-opening plans to the Orange County, Florida task force on Thursday. The theme parks must get the green light from Florida Gov. Ron DeSantis before they can reopen. – Stevens
With about an hour left in the trading session, the major averages were on pace to notch sharp gains as bets on the economy reopening mounted. The Dow jumped 360 points, or 1.5%, while the S&P 500 advanced 1.6%. The Nasdaq Composite gained 1.9%. Facebook and Amazon led the gains, jumping to record highs. —Imbert
Oil moved higher on Wednesday as demand continues to improve, and as data showed a surprise decrease in U.S. inventory for the week ending May 15. West Texas Intermediate, the U.S. oil benchmark, jumped 4.79%, or $1.53, to settle at $33.49 per barrel. International benchmark Brent crude gained $1.10 to settle at $35.75 per barrel. Data from the U.S. Energy Information Administration showed that for the week ending May 15 inventory dropped by 5 million barrels. According to estimates from FactSet, analysts had been expecting a build of 1.8 million barrels. The EIA's report also showed that U.S. production is now 1.6 million barrels per day below the March high of 13.1 million bpd. – Stevens
The Federal Open Market Committee released minutes Wednesday from its most recent meeting, which concluded April 29 with the FOMC voting to keep the benchmark interest rate in a range between 0% and 0.25% and not move it until a recovery is firmly in place. The decision to hold the rate at a historically level came as central bank officials noted the excessive damage the virus was doing to the economy and the potential for damage ahead. "Participants commented that, in addition to weighing heavily on economic activity in the near term, the economic effects of the pandemic created an extraordinary amount of uncertainty and considerable risks to economic activity in the medium term," the minutes said. —Cox, Pound
JPMorgan's widely-followed strategist Marko Kolanovic said that political fallout from the coronavirus is emerging as a "new and significant risk." The firm pointed to the U.S. Senate's bill focused on oversight of Chinese companies – passed on Wednesday – as evidence of growing geopolitical tensions. Meantime, the firm said that data supports continued re-opening of economies, and that the overall market outlook remains "positive." –Stevens
The $20 billion auction of the 20-year Treasury bonds on Wednesday was met with decent demand. The yield on the 20-year note came to 1.220%, compared with 0.69% for the 10-year and 1.41% for the 30-year bill. This marked the first time in 34 years that the Treasury has issued a 20-year bond. The move is an effort to fund a record level of borrowing the government will need to do this year to support the economy through the coronavirus pandemic. –Li
In addition to Facebook and Amazon, several other stocks in the S&P 500 have hit all-time highs on Wednesday, including:
Analog Devices — Shares of the semiconductor stock rose more than 8% following its earnings that beat Wall Street's expectations. Analog Devices reported earnings per share of $1.08, topping the $1.03 per share forecast by analysts, according to Refinitiv.
Western Digital – Shares of the data storage company jumped more than 5% after Cowen reiterated its outperform rating on the stock. The firm said the company looks set to report improving demand fundamentals, as well as higher growth and higher profitability as it shifts the focus of its business.
Urban Outfitters — Shares of Urban Outfitters tanked nearly 9% after the apparel retailer reported a wider-than-expected quarterly loss. The company also expects a 60% decline in same-store sales for the current quarter as the pandemic continues to hammer the industry.
Harley-Davidson — Shares of the motorcycle company rallied 7.7% Wednesday after a Wall Street Journal report said Harley-Davidson is reopening its factories this week at reduced production and a more limited assortment of bikes.
Click here to check out more movers. –Li
Wednesday's rally briefly pushed the S&P 500 above its 100-day moving average of 2,975.50. That marks the first time since late February that the broader market average surpassed that moving average. If the S&P 500's gains hold, it would be the index's first close above the 100-day average since Feb. 24. The index has since fallen slightly below that mark. —Imbert, Francolla
Shares of companies based in China fell after the U.S. Senate passed a bill that would increase oversight of Chinese companies. Shares of e-commerce giant Alibaba have fallen about 1.5% since shortly before noon, but the stock is still positive for the day. Shares of Baidu are down 0.2% for the day after gaining ground earlier in the session. —Pound
More than 87% of apartment households had paid full or partial rent payments as of May 13, according to the National Multifamily Housing Council. The reading was above the 85% who paid rent through April 13, but down from 89.8% in the first two weeks of May 2019. "In sum, the story that 'everyone is falling behind on their payments' is not correct," Deutsche Bank chief economist Torsten Slok said in a note. "In fact, we are seeing an improvement in the rent payment profile from April to May." —Pound
Shares of the retailer were trading about 0.4% higher for the day, losing an earlier jump after reporting earnings. CEO Marvin Ellison said on a conference call with investors that he expected sales growth to slow later in the year. The stock is now about 4% below Wednesday's intraday high of $122.69 per share. "We don't anticipate we're going to see negative comps, but we do anticipate that we're going to see sales start to moderate at some point in the latter part of this quarter and the back half of this year," Ellison said. —Pound, Feuer
Around midday, the major averages were sharply higher as investors cheered more states reopening their economies. The Dow was up about 400 points, or 1.7%, while the S&P 500 advanced 1.9%. The Nasdaq Composite traded 2.2% higher. —Imbert
Cowen said it sees "higher growth and higher profitability" in chip market Western Digital as the company is successfully shifting costs to its storage business. "The last 2 years WDC has eliminated $800MM/year of costs, repositioned product lines toward value-maximization and made actionable investments in silicon and nearline hard drisk drive's that collectively have improved WDC's competitive position," the analyst said. "We remain at Outperform on WDC as the company has now passed the bottom of the NAND cycle, which should facilitate WDC to report improving demand fundamentals over our investment horizon." Shares of the company are up 5% in early trading.— Bloom
Mark Zuckerberg announced Tuesday Facebook Shops, a new e-commerce feature that allows businesses to easily list their products on Facebook and Instagram and Wall Street is bullish on the social media's new initiative. "We have long viewed FB as the 'rent' to the digital economy and a core component of the online retail ecosystem," AB Bernstein told clients. Bernstein said Facebook Shops could unlock a $1.3 trillion market. Morgan Stanley said Facebook's leading reach can make Facebook a competitor to Amazon and Alphabet.
Deutsche Bank echoed this sentiment. "We see the broader deployment of more advanced eCommerce solutions meaningfully expanding the potential revenue opportunity beyond our initial estimate from a year ago that Instagram Checkout could be a $10B revenue in a bull case," Deutsche Bank told clients. — Fitzgerald
CNBC's Jim Cramer said on "Squawk Box" that the economic restrictions on retailers during the coronavirus crisis have caused permanent damage to smaller retailers. "Walmart is essential. Walmart's the biggest grocer in the country. So they deserve all the greatness they have ... they're a good citizen," Cramer said. "But at the same time, the government was, I thought, a bad actor in the sense that they let some big guys become even bigger." — Pound
JPMorgan raised MercadoLibre's price target to $1000 from $800 on Wednesday morning and said the Argentine e-commerce company was benefiting from the impacts of the coronavirus. "The e-commerce segment clearly benefits from the social distancing policies adopted to fight the COVID-19 pandemics, closing non-essential retail, and should benefit from faster adoption of ecommerce in the region, currently at c. 5% of retail vs 12% for the US and 20%+ for China," the analyst said. The stock is up 3.5% in early trading.— Bloom
Both Facebook and Amazon clinched all-time highs less than 30 minutes into the regular trading session Wednesday as each surged to its highest intraday price on record. E-commerce giant Amazon rose 1.5% to $2,489.80 per share while Facebook advanced 4.2% to $226.59 per share. Netflix, which hit an intraday record of $458.97 per share on Tuesday, traded just under that benchmark. Amazon, Facebook and Netflix are up 30.5%, 53.4% and 25.6% since March 23, the day the S&P 500 bottomed amid the springtime sell-off. — Franck
Odeon analyst Dick Bove upgraded JPMorgan Chase to buy from hold and initiated a $105.75 price target on the stock. The price target represents a 19.3% upside from Tuesday's close of $88.67 per share. "There is an incredible amount of money around. These funds have created a number of money-making opportunities for bankers," Bove said in a note. This makes "JPMorgan Chase an attractive investment at this time despite the probability that the company will suffer reversals in its loan portfolios. The creation of trillions of dollars will result in higher earnings for those banks that are able to capture the new funds and put them to use." —Imbert, Bloom
Wall Street analysts continue to get bullish on the prospects of a coronavirus vaccine. Morgan Stanley raised its price target on Moderna to $90 from $37 and said it sees a "65% probability" of success. "We now assume Moderna will sell ~1.5B doses of its COVID vaccine during the pandemic period and ~150M annual doses during the endemic period," the firm said. A report out Tuesday from Stat News said did not provide enough data regarding the effectiveness of its potential coronavirus vaccine. Shares of the company are down 3% in morning trading.— Bloom
Stocks opened Wednesday's session with solid gains, continuing a volatile week for Wall Street. The Dow Jones Industrial Average climbed 315 points at the open, while the S&P 500 gained 1.2% boosted by a 3% jump in Lowe's shares. The Nasdaq Composite rose 1.3%, sitting just 5.3% below its record high in February. — Li
President Donald Trump took a tough stance on China over the handling of the coronavirus, saying in a tweet Wednesday morning that it was the "incompetence of China" that caused "this mass Worldwide killing." Stock futures came off their highs following the comment amid worries Trump could take a harder line with China on trade and other economic matters because of the virus. Trump had threatened to terminate the "phase one" trade deal if China fails to meet its purchase commitments. Top trade negotiators talked over the phone earlier this month and agreed to follow through their trade obligations. –Li
Luckin Coffee's stock plunged 38% in premarket trading after it began trading for the first time in more than a month.Trading of the Chinese coffee chain's stock on the Nasdaq exchange was halted for pending news on April 7, just days after the company disclosed that its chief operating officer fabricated its 2019 sales. There is no time limit for how long a stock can be halted for pending news.On Tuesday, Luckin said that it had received a notice from the Nasdaq that the stock would be delisted. The company has requested a hearing, and the stock will remain listed on the exchange until a Nasdaq panel decides on an outcome. —Lucas
Two stocks bucked the trend of dividend cut last night and raised their quarterly payouts to investors. Defense contractor Northrop Grumman declared a quarterly dividend of $1.45 per share, up 10% from the previous quarter. The company's shares were flat in premarket trading. Clorox raised its quarterly dividend to $1.11 per share from $1.06, and its stock rose 1.4% in premarket trading on light volume. —Pound
Oil moved higher on Wednesday as growing demand continues to support prices. West Texas Intermediate, the U.S. benchmark, rose 1.9% to $32.58 per barrel, while international benchmark Brent crude traded 2.3% higher at $35.46 per barrel. With worldwide economies reopening, people are once again hitting the road. Producers have also cut back on output, so while there's still an imbalance in the market, the balance is beginning to shift. Traders are looking ahead to data released by the U.S. Energy Information Administration later this morning for a read on the health of the industry. Analysts are expecting the data to show a build of 1.8 million barrels for the week ending May 15, according to estimates from FactSet. —Stevens
Mark Newton, managing member at Newton Advisors, told clients that further market gains are still likely even after a sudden drop late Tuesday. "The late day weakness did nothing to take away from the bullish structure that resulted from Monday's breakout," Newton said. "We look to be at a juncture where the worst performing laggards of this year have begun a sharp counter-trend rally and can play catchup. I expect this to last into late week/early next." Newton added that, unless the S&P 500 breaks down to 2,860, "this dip should be buyable for a push to 3020-30." The S&P 500 closed at 2,922.94 on Tuesday. —Imbert
The Treasury is bringing back 20-year bonds, last issued in 1986, in a bid to extend the length of time it has to pay off its record level of borrowing to support the economy through the coronavirus pandemic. A $20 billion auction will be held at 1 p.m. ET on Wednesday. Analysts expect the new issue to be met with good demand as the 20-year note is particularly appealing to foreign investors, pension funds and insurers, who look for longer duration holdings to match their liabilities. –Li, Domm
Investors will learn more about the mindset of the Federal Reserve when minutes are released from the central bank's last meeting. The Federal Open Market Committee held its benchmark borrowing rate near zero following a meeting that ended April 29. In addition, the FOMC pledged to keep policy steady "until it is confident that the economy has weathered recent events and is on track to achieve its maximum employment and price stability goals." Markets had been looking for a bit firmer of a commitment to when the Fed would consider tightening policy again. The meeting summary will come out at 2 p.m. ET. –Cox
Shares of Target gained about 1% during Wednesday's premarket trading after the company's first quarter earnings results showed that digital sales jumped 141% year-over-year. Overall, Target's same-store sales grew by 10.8% as people shopped at the big box retailer amid the pandemic. But sales of higher-margin items, such as apparel, dropped, hitting the company's bottom line. For the quarter the big-box retailer earned 56 cents per share, down from $1.53 a year earlier, while revenue rose 11.3% to $19.62 billion. CEO Brian Cornell said that coronavirus-related expenses, such as higher wages, has risen to about $500 million. —Stevens
Shares of home improvement retailer Lowe's jumped more than 5% in premarket trading after the company said its first-quarter same-store sales surged 11.2% even amid the Covid-19 outbreak. For the company's first quarter, ended May 1, Lowe's reported net income rose to $1.34 billion compared to earnings of $1.05 billion one year ago. CEO Marvin Ellison said he was pleased with strong online demand, with Lowes.com sales increasing 80% during the quarter. —Franck
U.S. stock futures were sharply higher on Wednesday morning as the market's volatility this week keeps investors on their toes. Dow Jones Industrial Average futures were up 253 points, or 1.1%. S&P 500 and Nasdaq 100 futures both gained 1%. Wednesday's move up comes after a sharp decline in the previous session that snapped a three-day winning streak. Sentiment was lifted Wednesday in part by strong earnings from Lowe's. —Imbert
—With reporting from Maggie Fitzgerald, Jeff Cox, Yun Li, Jesse Pound, Patti Domm, Michael Bloom, Will Feuer and Amelia Lucas.
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