Stocks are pulling back again after three strong sessions that had, at one point, seen the Dow and S&P bounce 20% from their lows seens on Monday. Even if the 3% to 4% declines seen across the averages hold into the close, stocks will have had a very strong week as the $2T stimulus plan that has been passed by the Senate, and appears headed toward approval in the House, has given investors some hope that individuals and businesses may be able to weather the financial hardships presented by the COVID-19 pandemic. Meanwhile, the U.S. now has the most confirmed COVID-19 cases in the world as it has jumped ahead of Italy and China.
ECONOMIC EVENTS: In U.S. data, personal income climbed 0.6% in February, with spending rising 0.2%. The final University of Michigan consumer sentiment report for March revealed a downwardly-revised drop to a three-year low of 89.1. The preliminary reading had been 95.9, and that was already down sharply from a two-year high reading of 101.0 in February.
Meanwhile, the latest data from the Johns Hopkins Whiting School of Engineering shows there are now 558,502 confirmed cases of COVID-19 and 25,251 deaths due to the disease. Also, the 86,012 confirmed cases in the U.S. place it ahead of China, Italy and Spain in terms of being the country with the highest case count.
TOP NEWS: General Motors (GM) and Ford (F) are bearing the brunt of the president's frustration as both automakers were instructed to speed up production of ventilators in a series of tweets. President Donald Trump said that "as usual with 'this' General Motors, things just never seem to work out. They said they were going to give us 40,000 much needed Ventilators, 'very quickly'. Now they are saying it will only be 6000, in late April, and they want top dollar. Always a mess with Mary B." He then added that GM "must" start making ventilators "now" and Ford should "get going on ventialtors, fast," while making an unclear reference to invoking the Defense Production Act.
Shares of cruise lines are among the worst performers on the S&P as it becomes clearer that they will not qualify for aid under the roughly $2T coronavirus stimulus package headed for a House vote later today. The aid package approved by the Senate and now headed for the House limits aid to U.S.-incorporated companies with a majority of workers based in the U.S., which are two criteria that effectively exclude major cruiseship operators including Carnival (CCL), Norwegian Cruise Line Holdings (NCLH) and Royal Caribbean (RCL).
MAJOR MOVERS: Among the noteworthy gainers was Colgate-Palmolive (CL), which rose 2% after SunTrust analyst William Chappell upgraded the stock to Buy on his thesis that COVID-19 will not only improve global hygiene today but "permanently alter" consumers' hygiene practices. Also higher was Gamestop (GME), which advanced 1% after reporting quarterly results.
Among the notable losers was HanesBrands (HBI), which slid 12% after the company announced that it is drawing down $630M on its revolving credit facility "as a precautionary measure to increase balance sheet flexibility during the COVID-19 global pandemic." Also lower was BGC Partners (BGCP), which fell 27% after the company said it expects to reduce its quarterly dividend to 1c per common share. Raymond James analyst Patrick O'Shaughnessy downgraded BGC Partners two notches, to Market Perform from Strong Buy, stating that he was "surprised by and concerned with" the decision to slash the firm's quarterly dividend as he said that the cut, combined with drawing down the firm's revolver, makes him question whether there are risks to BGC's business model that he had not previously considered.
INDEXES: Near midday, the Dow was down 858.97, or 3.81%, to 21,693.20 , the Nasdaq was down 273.13, or 3.50%, to 7,524.41 , and the S&P 500 was down 93.36, or 3.55%, to 2,536.71 .
General Motors
-1.26 (-5.59%)
Ford
-0.165 (-3.14%)
Carnival
-3.075 (-17.28%)
Royal Caribbean
-6.77 (-16.66%)
Norwegian Cruise Line
-3.48 (-22.17%)
Colgate-Palmolive
+1.56 (+2.45%)
GameStop
+0.02 (+0.45%)
Hanesbrands
-1.12 (-12.53%)
BGC Partners
-0.91 (-27.96%)