Monthly Archives: April 2020

Dow futures fall 300 points after Wall Street wraps up best month in three decades

A woman with a facial mask passes the New York Stock Exchange (NYSE) on February 3, 2020 at Wall Street in New York City.

Johannes Eisele | AFP | Getty Images

Stock futures fell sharply on Thursday night as traders pored through the latest batch of big tech earnings after Wall Street wrapped up its best month in decades.

Dow Jones Industrial Average futures traded 300 points lower, or more than 1%. S&P 500 and Nasdaq 100 futures also dropped more than 1%.

Apple reported quarterly earnings that topped analyst expectations, but its revenue growth remained flat on a year-over-year basis. Also, the company did not offer guidance for the quarter ending in June amid uncertainty over the coronavirus outbreak. The tech giant’s stock traded more than 1% lower in after-hours trading.

Amazon, another tech giant, saw its shares tumble 5% in after-hours trading after announcing plans to spend all its second-quarter profits on its coronavirus response. The e-commerce behemoth also posted a first-quarter profit that missed analyst expectations.

Both Apple and Amazon are among the companies that led the S&P 500’s comeback from the late-March lows and were two of the best performers in April. Amazon rallied nearly 27% in April while Apple jumped 15.3%.

“Dependency on a handful of stocks has masked broadly based weakness in the past, and if they falter, could obscure broadly based improvements going forward,” said Willie Delwiche, investment strategist at Baird, in a note.

Wall Street was coming off its biggest monthly surge in over 30 years, with the S&P 500 gaining 12.7% while the Dow advanced 11.1%. It was the third-biggest monthly gain for the S&P 500 since World War II. The Nasdaq Composite closed 15.5% higher for April, logging in its biggest one-month gain since June 2000.

Those gains were driven in part by hopes of a potential treatment for the coronavirus. Earlier in the week, Gilead Sciences said a study of its remdesivir drug conducted by National Institute of Allergy and Infectious Diseases met its primary endpoint.

The number of new infection around the world has also fallen in recent weeks, leading some countries and U.S. states to slowly reopen their economies.

But Phillip Colmar and Santiago Espinosa, strategists at MRB Partners, urged investors to remain cautious.

“The sharp relief rally in equities has now moved ahead of underlying fundamentals, leaving room for near-term disappointments,” they said in a note to clients. “Many authorities are looking to reopen their economies but doing so safely and to near previous output levels will require a series of medical breakthroughs and widespread distribution of the treatment.”

More than 3.2 million virus cases have been confirmed globally, according to Johns Hopkins University, with over 1 million infections in the U.S. alone.

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Stocks making the biggest moves after hours: Amazon, Apple, Western Digital and more

Western Digital hard drives are shown for sale at an Office Depot Inc store in Encinitas, California.

Mike Blake | Reuters

Check out the companies making headlines after the bell.

Amazon — The e-commerce giant’s stock tumbled 5% in extended trading after the company posted its first-quarter financial results. The company reported first-quarter earnings of $5.01 per share, which missed analysts’ estimates of $6.25 per share, according to Refinitiv. Amazon said it had revenue of $75.45 billion, while analysts polled by Refinitiv anticipated $73.61 billion. 

Amazon announced that it is spending all of its second-quarter profits on responding to the Covid-19 pandemic. “If you’re a shareowner in Amazon, you may want to take a seat, because we’re not thinking small,” the company said in its earnings release. Amazon said that under normal circumstances, the company would expect an operating profit of around $4 billion in the second quarter.

Apple — The tech company’s stock whipsawed and fell 2% in extended trading after the company provided its earnings for the second quarter. Apple said revenue from iPhone sales fell 7% from a year ago amid the coronavirus pandemic. The company gave adjusted earnings of $2.55 per share with revenue of $58.31 billion, while analysts expected adjusted earnings of $2.26 per share on $54.54 billion in revenue, according to Refinitiv. 

Gilead Sciences — The pharmaceutical company saw its stock drop 2% in extended trading after it reported first-quarter earnings. Gilead said it had earnings of $1.68 per share excluding some items with revenue of $5.55 billion, while analysts estimated earnings of $1.57 per share on revenue of $5.45 billion, according to Refinitiv. The company also said it can produce more than 140,000 rounds of its remdesivir coronavirus treatments by the end of May, and can make 1 million rounds of the antiviral drug regimen by the end of this year. 

United Airlines — The airline’s stock climbed 1% in extended trading after the company published financial results for the first quarter. United Airlines said it had a loss of $2.57 per share excluding some items on revenue of $7.98 billion. Analysts polled by Refinitiv estimated a loss of $3.47 per share and revenue of $8.22 billion. 

Western Digital — The data storage company’s stock plunged 10% in extended trading after the company released its third-quarter earnings. Western Digital reported earnings of 85 cents per share excluding some items, while analysts polled by Refinitiv anticipated earnings of 93 cents per share. The company’s revenue of $4.18 billion was in line with analysts’ estimates, according to Refinitiv. Western Digital said it expects a headwind in the fiscal fourth quarter from physical store closures caused by the coronavirus pandemic, according to a company statement.

Visa — Shares of the credit card company fell 1% in extended trading after Visa announced its second-quarter financial results. The company reported adjusted earnings of $1.39 per share and said it had revenue of $5.85 billion. Wall Street expected revenue of $5.75 billion, according to Refinitiv.

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Wells Fargo will no longer accept applications for home equity lines of credit

A Wells Fargo logo is seen at the SIBOS banking and financial conference in Toronto

Chris Helgren | Reuters

Wells Fargo, one of the largest home lenders in the U.S., is stepping away from the market for home equity lines of credit because of uncertainty tied to the coronavirus pandemic.

The bank informed its mortgage personnel of the news Thursday in a conference call, according to a source, and the move was confirmed by company spokesman Tom Goyda.

“Wells Fargo Home Lending will temporarily stop accepting applications for all new home equity lines of credit after April 30,” Goyda said in an emailed statement. “The decision to temporarily suspend the origination of new HELOCs reflects careful consideration of current market conditions and the uncertainty around the timing and scope of the anticipated economic recovery.”

Banks have been retreating from loans tied to housing as the coronavirus pandemic impacts home values and the creditworthiness of borrowers. Earlier this month, JPMorgan Chase said it was dropping HELOCs. 

The bank said the HELOC suspension will “continue until our analysis of market conditions indicates that it is appropriate to resume the responsible extension of HELOCs to homeowners.” Goyda said. 

This story is developing. Please check back for updates.

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Stock market live updates: Dow drops 200, Tesla jumps 3%, best month since 80s

Stocks fell on the final trading day of April as economic data weighed on investor sentiment. Jobless claims have now topped 30 million over the last six weeks, and data showed a plunge in consumer spending and personal incomes in March. All the major averages are still up double digits for the month, however, and the Dow and S&P 500 are on track for their best month since the 1980s. Optimism has been driven by hopes that economies will gradually begin to reopen, as well as by positive results from a Gilead Sciences drug trial for a coronavirus treatment.

This is a live blog. Here’s the latest:

11:03 am: S&P heads for third-best month since World War II

Despite Thursday’s losses, the S&P 500 remained on track to post one of its best monthly performances since World War II. The broader market average is up about 13% in April. That would be its biggest one-month gain since January 1987 and third-biggest monthly jump since the Second World War. — Imbert, Rattner

10:45 am: Stocks are headed for their best month in decades, yet most of Wall Street hates this rally

As encouraging as the market comeback this month has been, Wall Street has little faith in it. A leveling out of coronavirus hospitalizations, rising hopes for a treatment and a partial reopening of the economy sparked a steep rebound this month, with the S&P 500 popping more than 13%, on track for its best month since 1987 and its third best month ever since World War II.

However, a lack of an all-clear on the pandemic front, coupled with worrisome technical and sentiment indicators, lead many Wall Street pros to believe the market is getting way ahead of itself.”Beware of the oddity in this bear rally,” Andrew Lapthorne, global head of quantitative research at Societe Generale, said in a note Thursday. “Given the overall negative undertone from the economic challenges ahead, the dramatic reversal of global markets after the pandemic lows is more puzzling.” — Li

10:27 am: Here are Thursday’s biggest analyst calls of the day, including DraftKings, Facebook & Southwest 

  • BMO initiated Moderna as outperform.
  • Loop downgraded Dollar General to hold from buy.
  • Morgan Stanley initiated DraftKings as overweight.
  • Canaccord downgraded Shopify to hold from buy.
  • Pivotal upgraded Facebook to hold from sell.
  • Stifel upgraded Southwest Airlines to buy from hold.
  • Stephens resumed coverage of Brinker as overweight.

CNBC PRO subscribers can read more here. — Bloom

10:14 am: Shell’s dividend cut casts doubts on US majors, adds to negative market mood

Investors take what comfort they can in the dividends of big oil majors, like Exxon Mobil and Chevron. So Royal Dutch Shell’s dividend cut — its first since World War II — was unnerving for investors in the sector. The stocks of both Exxon and Chevron sagged Thursday morning after a week of gains. Both majors report earnings Friday, and dividend comments will be closely watched. Shell cut its dividend 66% to $0.16 per share. Its stock plummeted more than 11%. With energy stocks under pressure with this year, Exxon’s yield is 7.4% and Chevron’s was at 5.5%. — Domm

10:10 am: Consumers cut back most ever on services, and are saving most since 1975 

Consumer spending on services fell the most ever in March, and Americans also saved their income at the highest rate since 1975.

Overall consumer spending fell 7.5% in March, the steepest decline in records that go back to 1959. Within that number, spending on services fell by 9.5%, the worst ever for a sector that was about 69% of consumer spending in February. Consumers make up about 67% of the economy. The worst decline previously was a 1.3% drop in services spending in September, 2001 after 9/11. The number was barely negative during the Great Recession, with a 0.3% decline in February, 2009.

“There’s nothing close. It’s the worst in history,” said Diane Swonk, chief economist at Grant Thornton. While Americans stopped spending, they also saved more — 13.1% of their income. The savings rate in March was the highest since the 17.3% in May, 1975 and rivals the level in the early 1980s recession, she said. — Domm

10:04 am: S&P 500 facing technical pressure near 3,000 level

Strategist Michael Shaoul pointed out in a note the S&P 500 is facing resistance around the 3,000 level after the average’s relentless rally this month. “This level can be expected to combine selling pressure from investors looking to lighten portfolios at attractive levels with pressure from systematic investors to flip to long positions if resistance is overcome,” Shaoul, chairman and CEO of Marketfield Asset Management, wrote in a note to clients. “Given the massive gains seen in April a straightforward “punch through” looks like a tall order, particularly since a lot of medical progress and economic recovery has already been discounted by the market.” —Imbert

9:55 am: ‘Did someone blow up?’ asks Cramer

Stocks moved higher on Wednesday with many of the names that have been hardest hit by the pandemic – such as cruise lines, airlines and retailers – rebounding, which led CNBC’s Jim Cramer to question if the rally was simply hedge funds covering short positions. “We seemed to have a big short squeeze last night … did someone blow up?” he asked Thursday. “There was no real explanation other than perhaps short covering given the beaten they’ve taken,” added CNBC’s David Faber. Norwegian Cruise Line has surged 41% this week, while Royal Caribbean Cruises and Carnival Corp are each up more than 25% on the week. For the year, however, they are all down more than 60%. Airlines were another group leading the rally, with Untied, America and Delta all up more than 12% this week. Much like the cruise lines, however, they’ve posted steep losses for the year, with all three down more than 55%. – Stevens

9:30 am: Stocks drop as jobless claims weigh

Stocks opened in the red on the final day of April trading, in what’s otherwise been an overall strong month of stocks. The Dow dropped 264 points for a loss of 1%, the S&P 500 shed 0.7%, while the Nasdaq Composite was flat. Jobless claims, which have now topped 30 million over the last six weeks, weighed on markets, as did a plunge in consumer spending and personal incomes in March. – Stevens

9:08 am: Consumer spending drops in March

U.S. consumer spending dropped 7.5% in March, compared with a year earlier, as Americans stayed home in an effort to slow the spread of the coronavirus. The slowdown in spending also came as personal incomes dropped 2% in March, according to the U.S. Bureau of Economic Analysis. – Stevens, Schoen

8:45 am: Jobless claims top 30 million over the past 6 weeks

The Labor Department reported another 3.84 million Americans filed for unemployment benefits last week, bringing the total number to more than 30 million in a six-week period. The jump in unemployment claims wiped out the job gains made since the financial crisis as businesses are forced to shut down due to the coronavirus pandemic. “Bottom line … it’s like banging your head against the wall and then having a headache,” said Peter Boockvar of Bleakley Advisory Group in a note. “We don’t need to analyze why you have a headache, only how long it lasts. The claims number will continue to come down as more people start to go back to work in coming weeks and months.” —ImbertCox

8:38 am: Tesla shares jump following earnings

Tesla shares gained 8% during Thursday’s premarket trading after the electric vehicle maker posted a profit for the third straight quarter. In the first quarter the company earned $1.24 per share, ex-items, on $5.99 billion in revenue. Wall Street was expecting an adjusted loss of 36 cents per share and revenue of $5.9 billion for Q1, according to a survey of analysts by Refinitiv. However, estimates varied widely and comparing Tesla’s actual results with estimates isn’t straightforward, given the difficulty of predicting the impact of the coronavirus. —Stevens, Kolodny

7:41 am: Facebook shares jump on ad revenue ‘stability’

Shares of the social media giant jumped more than 8% in the premarket after the company reported “stability” in its ad revenue after a decline in March. Facebook said its March ad revenues dropped sharply amid the coronavirus pandemic, but noted it stabilized in the first few weeks of April. The company’s overall revenues for the first quarter beat expectations. “The COVID impact, while negative, is less severe for FB (25 points of decel) than peers such as Google search, Snap or Twitter, showing strength of FB’s news feed auction,” writes BofA Securities analyst Justin Post. —Imbert

7:40 am: Oil prices jump on optimism surrounding economies reopening

Oil prices jumped on Thursday, extending Wednesday’s surge, on optimism that economies might soon begin to reopen. West Texas Intermediate crude futures climbed $2.36, or 15.7%, to $17.43 per barrel. The U.S. benchmark surged 22% on Wednesday. Brent was up 11.4%, or $2.57 at $25.11 a barrel in light trading, with the June contract expiring on Thursday, having posted a 10% gain on Wednesday. Oil also rose after data showed a smaller-than-expected build in U.S. stockpiles, as well as an announcement from Norway’s oil minister that the country would curb production for the first time in 18 years in an effort to help shore up prices. –Stevens

7:32 am: Weekly jobless claims expected to hit 3.5 million

The unprecedented swelling of the unemployment ranks continued last week, with first-time jobless claims expected to hit 3.5 million when the Labor Department releases its latest count Thursday at 8:30 a.m. ET. If that’s accurate, it would take the running six-week total close to 30 million as the economic freeze brought about by the coronavirus continues. The only bright side is that the level of filing appears to have peaked from the nearly 6.9 million who filed the week of March 28. –Cox

7:30 am: Stock futures flat, on pace for best month in decades

U.S. equity futures were mainly flat on Thursday as market participants digested strong technology earnings and awaited jobless claims. The Dow Jones Industrial Average futures implied an opening gain of around 70 points. S&P 500 and Nasdaq-100 futures also pointed to gains at the open. 

Stock surged on Wednesday, with the Dow rising more than 500 points. The rally was helped by hopes of a coronavirus treatment from Gilead and commentary by the Federal Reserve that the central bank will take any measures necessary to support the economy. Equities were also helped by strength in technology stocks, like Alphabet, which jumped more than 5%. The S&P technology sector closed in positive territory for the year.  

Thursday is the last trading day if April. The S&P 500 is on track for its biggest one-month gain since 1974. The Dow is on pace for its best month since 1987. — Fitzgerald 

– With reporting from Patti Domm, Jeff Cox, Michael Bloom, Yun Li and Lora Kolodny.

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