Stocks began the trading day with solid gains, then took a leg higher after Senator Bernie Sanders announced he will suspend his presidential campaign, clearing the way for Joe Biden to secure the Democratic nomination and set up a show down between the former Vice President and President Donald Trump. Later in the day the Fed released the minutes of its emergency rate cut meeting, which showed that its committee members see 0% rates being maintained until the impact of the COVID-19 crisis has passed.
ECONOMIC EVENTS: In U.S. central bank news, minutes from the March 15 Federal Reserve meeting showed that the FOMC members believed that actions taken in response to the spread of COVID-19 could have significant effects on borrowers. The committee members also said, according to the minutes, that members wanted 0% rates until the U.S. economy weathers recent events and that a 50 basis point cut is a "clear signal" of the economic significance of the coronavirus.
In White House news, Bloomberg reported that the Trump administration is working on plans to reopen the U.S. economy that depend on testing considerably more Americans for the coronavirus than has been possible to date.
In coronavirus news, New York State Governor Andrew Cuomo reported the highest single day death toll for the state, reporting 779 deaths. Cuomo said that the state is "flattening the curve," even though the death rate is climbing. Meanwhile, the latest data from the Johns Hopkins Whiting School of Engineering shows there are now 1,475,976 confirmed cases of COVID-19 and 86,979 deaths due to the disease.
TOP NEWS: McDonald's (MCD) reported that its global comparable restaurant sales declined 3.4% in the first quarter, while its U.S. same-store sales rose 0.1%. After a strong start to the quarter, global comparable sales declined 22.2% in March, including a 13.4% decline in the U.S., as pandemic restrictions took hold. Consistent with many of its peers, McDonald's withdrew its 2020 and long-term guidance, which was a decision that BMO Capital analyst Andrew Strelzik said was "not surprising given current uncertainty."
The Wall Street Journal reported that Amazon (AMZN) is suspending its Amazon Shipping service, also known as "Ship with Amazon," in June because, as the company is quoted as having said, it "needs its people and capacity to handle a surge in its own customers' orders." Shares of FedEx (FDX) and UPS (UPS) jumped 8.3% and 6.3%, respectively, as analysts at Credit Suisse, JPMorgan and BofA all said they expects the shippers' stocks to react favorably to the Wall Street Journal's report.
Carson Block's Muddy Waters this morning announced a new short position in eHealth (EHTH), arguing that the company's "highly aggressive accounting masks [...] a significantly unprofitable business." Meanwhile, shares of Luckin Coffee (LK) were halted before the open on Tuesday pending news, and have yet to resume trading. Luckin is another short target of Block, who accused the Chinese company of fraud months before its recent revelation that it found an employee who was inflating sales figures.
Disney (DIS) might require theme park visitors to have their temperatures checked when they reopen after coronavirus restrictions on public gatherings are lifted, Executive Chairman Bob Iger said in an interview with Barron's. Last night, Wells Fargo analyst Steven Cahall downgraded Disney to Equal Weight from Overweight with a price target of $107, down from $155, citing his concerns about the "unique and severe downturn for Parks." Cahall forecasts zero park attendance for the second half of FY20 and roughly 50% capacity in FY21, he told investors.
Meanwhile, Wells Fargo (WFC) shares rose 5.2% after the Federal Reserve said it would ease growth restrictions for the bank to allow for more loans. After the move, the lender announced that it will expand its participation in the Paycheck Protection Program for small businesses.
MAJOR MOVERS: Among the noteworthy gainers was Annaly Capital (NLY), which rose 29.2% after it provided a Q1 earnings guidance update. Also higher was Novavax (NVAX), which gained 15.3% after the company said it identified a coronavirus vaccine candidate.
Among the notable losers was TAL Education (TAL), which slid 6.7% after reporting last night that the company discovered "certain employee wrongdoing" in the company's routine internal auditing process. Also lower was Glu Mobile (GLUU), which fell 7.6% after Stephens analyst Jeff Cohen downgraded the stock to Underweight from Equal Weight.
INDEXES: The Dow rose 779.71, or 3.44%, to 23,433.57, the Nasdaq gained 203.64, or 2.58%, to 8,090.90, and the S&P 500 advanced 90.57, or 3.41%, to 2,749.98.
McDonald's
+1.95 (+1.11%)
Amazon.com
+32.2 (+1.60%)
UPS
+5.65 (+6.07%)
FedEx
+9.51 (+8.20%)
eHealth
-13.93 (-11.90%)
Use LKNCY
+ (+0.00%)
Disney
-0.12 (-0.12%)
Wells Fargo
+1.51 (+5.25%)
Annaly Capital
+1.305 (+29.36%)
Novavax
+2.285 (+15.37%)
TAL Education
-3.74 (-6.70%)
Glu Mobile
-0.485 (-7.90%)