Stocks fell for a second day in a row after Federal Reserve Chairman Jerome Powell said the economic outlook is uncertain and downside risks are significant. Sobering comments from billionaire investors Stanley Druckenmiller and David Tepper regarding market valuations may have also played a role in the day's downbeat tone, though President Trump tweeted his own view on how to regard the commentary from those and other "so-called rich guys" who speak negatively about the market.
ECONOMIC EVENTS: In U.S. data, the Producer Price Index report for April followed yesterday's CPI lead with a 1.3% record decline for the headline and a 0.3% drop for the core PPI.
Fed Chair Jerome Powell, in a speech on current economic issues at the Peterson Institute for International Economics, said that "the scope and speed of this downturn are without modern precedent, significantly worse than any recession since World War II." The head of the central bank added: "A loan from a Fed facility can provide a bridge across temporary interruptions to liquidity, and those loans will help many borrowers get through the current crisis. But the recovery may take some time to gather momentum, and the passage of time can turn liquidity problems into solvency problems. Additional fiscal support could be costly, but worth it if it helps avoid long-term economic damage and leaves us with a stronger recovery."
In COVID-19 news, New York Governor Andrew Cuomo reported 166 virus deaths in the state yesterday versus 195 the day before.
TOP NEWS: Shares of Royal Caribbean (RCL) fell more than 5% after the cruise line operator announced that it has commenced a private offering of senior secured notes for an aggregate principal amount of $3.3B.
Shares of peer Norwegian Cruise Line (NCLH) were also 7% lower after Wells Fargo analyst Timothy Conder downgraded that stock to Equal Weight from Overweight with a price target of $14, down from $70.
Las Vegas Sands (LVS) announced the company will discontinue its pursuit of integrated resort development in Japan, with Sands Chairman and CEO Sheldon Adelson stating that "the framework around the development of an IR has made our goals there unreachable."
Meanwhile, California Resources (CRC) shares dropped 7.9% after The Wall Street Journal reported that the company is in talks with lenders around a financing package of up to $600M to carry the oil company through a planned bankruptcy proceeding.
MAJOR MOVERS: Among the noteworthy gainers was WW (WW), which rose 4.7% after Jefferies analyst Stephanie Wissink initiated coverage of the stock with a Buy rating and $32 price target. Also higher were United Natural Foods (UNFI) and Progyny (PGNY), which gained a respective 45.6% and 27.5% after reporting quarterly results.
Among the notable losers was Spirit Airlines (SAVE), which fell 13.1% after Raymond James analyst Savanthi Syth downgraded the stock to Market Perform from Outperform. Another stock moving lower following an analyst downgrade was Coty (COTY), which was cut to Neutral from Outperform with a $5 price target by Exane BNP Paribas analyst Mikheil Omanadze. Also lower were Infinera (INFN) and 8x8 (EGHT), which dropped 25.3% and 26.4%, respectively, after reporting quarterly results.
INDEXES: The Dow fell 516.81, or 2.17%, to 23,247.97, the Nasdaq lost 139.38, or 1.55%, to 8,863.17, and the S&P 500 declined 50.12, or 1.75%, to 2,820.00.
Royal Caribbean
-1.76 (-4.84%)
Norwegian Cruise Line
-0.79 (-7.13%)
Las Vegas Sands
-1.57 (-3.42%)
California Resources
-0.145 (-8.84%)
WW
+1.18 (+5.03%)
United Natural Foods
+6.99 (+44.98%)
Progyny
+5.83 (+28.73%)
Spirit Airlines
-1.255 (-13.28%)
Coty
-0.685 (-15.78%)
Infinera
-1.49 (-25.65%)
8x8
-5.48 (-26.72%)