Stocks end higher for second consecutive day amid stimulus hopes
The Dow had its first back-to-back winning sessions in nearly two months a day after the blue chip index jumped by more than 11% for its best single day performance since 1933. The other major averages also gained following Senate leaders' deal on a $2 trillion stimulus package. The legislation will provide direct financial checks to many Americans, drastically expand unemployment insurance, offer hundreds in billions in loans to both small and large businesses, and provide health care providers with additional resources as the virus spreads, according to The Wall Street Journal, although full details of the package are still being revised and Congress will still need to pass the measure. House Republicans are falling in line behind the Senate stimulus plan and are willing to allow quick passage of the plan, according to a source that spoke to CNN.
ECONOMIC EVENTS: In U.S. data, durable goods orders increased 1.2% in February. The FHFA house price index rose 0.3% to 284.4 in January.
Meanwhile, the latest data from the Johns Hopkins Whiting School of Engineering shows there are now 454,398 cases of COVID-19 and 20,550 deaths. In New York, which has become the "epicenter" of the outbreak in the U.S., Governor Andrew Cuomo said 30,811 people have tested positive, 12% are currently hospitalized, and 3% of positives are ICU patients.
TOP NEWS: Shares of U.S. airlines surged after U.S. legislative leaders and the Trump administration reached a deal over an estimated $2T stimulus bill aimed at mitigating the economic impacts from the coronavirus outbreak, which includes a $50B package for the U.S. airline and cargo industry. Following the news, Deutsche Bank analyst Michael Linenberg upgraded to Buy from Hold shares of American Airlines (AAL), Alaska Air (ALK), Delta Air Lines (DAL), JetBlue (JBLU), Southwest (LUV), Spirit Airlines (SAVE) and United Airlines (UAL), and upgraded Hawaiian Holdings (HA) to Buy from Sell, saying he believes the stimulus package will support the sector at least through 2020, "and that is even after assuming a draconian outlook for air travel demand for the remainder of the year."
Of note, United Airlines said that it expects a 52% overall domestic schedule reduction and an international schedule cut of 90% for the month of April.
Boeing (BA) shares jumped 24.4% after news of the stimulus agreement, with the Washington Post reporting that the package includes a $17B federal loan program for businesses deemd "critical to maintaining national security." While the provision does not mention the planemaker by name, two sources told the Post that the provision was crafted largely for Boeing's benefit.
Meanwhile, shares of Facebook (FB) were almost 3% lower after the social media giant said in a blog post last night that it has seen a weakening in its ads business in countries taking aggressive actions to reduce the spread of COVID-19. Following the announcement, SunTrust analyst Youssef Squali cut his price target on the shares to $230 from $265, saying that while visibility on the turnaround timing is "poor," he expects Facebook to emerge from the crisis thanks to the growing user engagement, its effectiveness for advertisers, and its "excellent" financial position.
CVS Health (CVS) was in focus after it announced that it is waiving cost-sharing and copays for inpatient hospital admissions related to COVID-19 for Aetna's commercially insured members.
In other COVID-19 news, UnitedHealth (UNH) shares rose 6.7% after the company said that a study led by UnitedHealth Group Research & Development and OptumCare clinicians has demonstrated that a simple, self-collected test is as effective in identifying COVID-19 infections as the current clinician-collected test.
Meanwhile, the Nikkei Asian Review reported that Apple (AAPL) is preparing to potentially postpone the launch of its first 5G iPhone as the COVID-19 pandemic threatens demand and disrupts the product development schedule.
MAJOR MOVERS: Among the noteworthy gainers was Apollo Commercial (ARI), which surged 75% after it said it is "well-prepared" to function remotely amid the coronavirus pandemic. Also higher was Two Harbors (TWO), which rose 79.3% after it suspended its first quarter common stock and preferred stock dividends.
Among the notable losers was WWE (WWE), which fell just under 12% after Loop Capital downgraded the stock to Sell from Hold, saying that a "transformative deal" for the company is not coming. Additionally, WWE's CEO Vince McMahon is selling part of his stake in the company through Morgan Stanley at $38 per share, with Loop analyst Alan Gould saying it amounts to about 15% of McMahon's holdings. Also lower was CenturyLink (CTL), which slid over 9% after Citi analyst Michael Rollins downgraded the stock to Sell from Neutral.
INDEXES: The Dow rose 495.64, or 2.39%, to 21,200.55, the Nasdaq fell 33.56, or 0.45%, to 7,384.30, and the S&P 500 advanced 28.23, or 1.15%, to 2,475.56.