Stocks were mixed for most of the day, before closing lower, as Federal Reserve Chair Jerome Powell and the Treasury Secretary Steve Mnuchin testified before the Senate's Committee on Banking, Housing, and Urban Affairs. Futures dipped overnight as fears of rising U.S. tensions with China were stoked by news that President Trump threatened to permanently cut off funding to the World Health Organization and revoke U.S. membership if the group doesn't curb what he called its "pro-China" bias. Meanwhile, Walmart's earnings topped expectations, but Home Depot saw profits fall due to higher costs related to the virus even as sales jumped.
ECONOMIC EVENTS: In U.S. data, housing starts dropped 30.2% in April to a 891,000 rate, which was a little weaker than analysts expected. The Congressional Budget Office is now forecasting a 38% decline in GDP in Q2, with 26 million fewer people employed in the quarter than in the prior three month period.
In his prepared testimony for his committee appearance today, Fed Chair Powell reiterated that the central bank is "committed to using our full range of tools to support the economy in this challenging time even as we recognize that these actions are only a part of a broader public-sector response."
Meanwhile, Treasury Secretary Mnuchin didn't indicate any further additions to the borrowing schedule in his testimony. He said there wasn't enough demand to support the introduction of a 50- or 100-year bond. The current plan is to fund the current massive deficit via issuing a lot of bills, and to then shift borrowing to longer dated maturities to take advantage of record-low interest rates.
In COVID-19 news, New York Governor Andrew Cuomo reported 105 virus deaths in the state yesterday versus 106 the day before.
TOP NEWS: Shares of Walmart (WMT) closed 2.1% lower after the world's largest retailer beat consensus revenue and earnings expectations with its first quarter report. Despite the "unprecedented demand for products across multiple categories" that led to its strong top-line results, the company withdrew its guidance for fiscal year 2021 given the "significant uncertainty" on the duration and intensity of the COVID-19 health crisis globally, the length and impact of stay-at-home orders, the scale and duration of economic stimulus, employment trends and consumer confidence, and other factors.
Fellow Dow-indexed retail giant Home Depot (HD) also reported strong sales but missed earnings expectations. Home Depot, like Walmart, suspended its previously communicated fiscal 2020 guidance as a result of the uncertainty related to the duration of COVID-19 and its impact on the broader economy, although it noted that sales trends were strong at the end of the first quarter and into the first two weeks of the second quarter.
Airline operators were in focus after two members of that group - United Airlines (UAL) and Southwest (LUV) - issued updates that noted a modest improvement in demand driven by improved bookings and reduced cancellation rates. Meanwhile, Delta (DAL) CFO Paul Jacobson said while speaking at the Wolfe Transportation & Industrials Conference that his company has seen a "little bit" of bounce off the bottom and he sees reasons to be encouraged.
Last night, SmileDirectClub (SDC) confirmed that it has filed a lawsuit seeking approximately $2.8B from Comcast's (CMCSA) NBC Universal unit and reporter Vicky Nguyen for "knowingly and intentionally making factually inaccurate, misleading and defamatory claims about the Company and its platform on an NBC Nightly News with Lester Holt report."
Meanwhile, Facebook (FB) shares rose 1.7% after the company introduced Facebook Shops, which it said will "make it easy for businesses to set up a single online store for customers to access on both Facebook and Instagram." The company noted that, as a result, it is working more closely with partners like Shopify (SHOP) and ChannelAdvisor (ECOM) to give small businesses "the support they need." Shares of Shopify were 2% higher after the news.
MAJOR MOVERS: Among the noteworthy gainers was Spotify (SPOT), which jumped 8.4% after the company said that The Joe Rogan Experience will be coming to the streaming platform via a multi-year exclusive licensing deal. Also higher was Advance Auto Parts (AAP), which gained 3.5% after reporting quarterly results.
Among the notable losers was T-Mobile (TMUS), which slid 3.2% after CNBC reported that SoftBank (SFTBY) is planning to sell part of its stake in the mobile services company through a secondary offering. Also lower was Moderna (MRNA), which fell 10.4% following a stock offering and after STAT News reported that vaccine experts are questioning if it is too early to assess the company's COVID-19 vaccine candidate.
INDEXES: The Dow fell 390.51, or 1.59%, to 24,206.86, the Nasdaq lost 49.72, or 0.54%, to 9,185.10, and the S&P 500 declined 30.97, or 1.05%, to 2,922.94.
Walmart
-2.77 (-2.17%)
Home Depot
-6.44 (-2.63%)
United Airlines
-0.46 (-1.91%)
Southwest
+0.64 (+2.37%)
Delta Air Lines
-0.1 (-0.46%)
SmileDirectClub
+0.41 (+6.07%)
Comcast
+0.11 (+0.29%)
Comcast
+ (+0.00%)
Ticker changed to META
+3.57 (+1.67%)
Shopify
+15.05 (+2.04%)
ChannelAdvisor
-0.455 (-3.50%)
Spotify
+13.36 (+8.27%)
Bought by NVS
+ (+0.00%)
T-Mobile
-3.29 (-3.23%)
SoftBank Group
+ (+0.00%)
Moderna
-8.39 (-10.49%)