Stocks were lower in early trading as spikes in COVID-19 cases in several states, including Florida and Texas, pushed the Dow and S&P down for the first time in three days and sent the Nasdaq lower for the first time in nine days. In addition to the troubling virus news in a number of U.S. states, the IMF issued a sobering forecast for a decline in global economic growth while news that the U.S. is considering $3.1B in fresh tariffs on EU and UK products added to the market's sour mood. The downward direction of the day's trading was cemented after New York and two neighboring states announced that they plan to order inbound travelers from states where the virus is now surging to quarantine if they plan to visit the tri-state area.
ECONOMIC EVENTS: In U.S. data, the FHFA house price index rose 0.2% to 288.3 in April, which was a new record high.
The International Monetary Fund has cut its global growth forecast and warned that the rebound in global financial markets "appears disconnected from shifts in underlying economic prospects". The fund now expects global GDP to shrink 4.9% this year, which is down from a 3.0% contraction forecast made in April. For next year, the IMF sees a rebound of 5.4%, which is also lower than the 5.8% projected two months ago.
The latest data from the Johns Hopkins Whiting School of Engineering shows there are now about 9.3M confirmed cases of COVID-19 worldwide, including 2.35M in the U.S., and 478,289 deaths due to the disease.
In other COVID-19 news, New York Governor Andrew Cuomo, along with Governor Phil Murphy of New Jersey and Governor Ned Lamont of Connecticut, announced a joint order that all individuals traveling from states with significant community spread of COVID-19 into any of the three states must quarantine for 14 days. Meanwhile, California reported 190,222 COVID-19 cases in the state, up 3.9% from the 183,073 reported yesterday.
TOP NEWS: Shares of Dell Technologies (DELL) rose 8.2% after The Wall Street Journal reported that Dell is considering potential options for its roughly 81% stake in VMware (VMW). The options could include a spinoff, purchase of the remaining stake or leaving the stake unchanged, The Journal's Cara Lombardo reported, citing people familiar with discussions. VMware shares were 2.3% higher following the report.
The Justice Department and a coalition of state attorneys general are taking the first steps toward launching an antitrust probe of Apple (AAPL), Leah Nylen of Politico reported, citing three people involved in the discussions. The Justice Department and attorneys general have spoken to several companies unhappy with Apple's control of its App Store, particularly for apps that compete with Apple's own products, sources told Politico. Additionally, 9to5Mac reported that Apple will reclose seven of its stores in the Houston area as COVID-19 cases surge in many states.
Shares of Disney (DIS) fell 3.9% following a CNN report that more than 7,000 people are urging the company and government officials to reconsider opening Disney World next month as coronavirus cases surge in Florida.
Meanwhile, Bayer (BAYRY) announced it will pay $10.1B-$10.9B to resolve 75% of the current U.S. Roundup product liability litigation, dicamba drift litigation and PCB water litigation. The main feature is the U.S. Roundup resolution that will bring closure to approximately 75% of the current Roundup litigation involving approximately 125,000 filed and unfiled claims overall, the company noted. The agreements contain no admission of liability or wrongdoing, the company added.
MAJOR MOVERS: Among the noteworthy gainers was Plug Power (PLUG), which rose 17.7% after analysts at H.C. Wainwright, Roth Capital, and B. Riley FBR raised their price targets on the stock. Also higher was iBio (IBIO), which gained 6.9% after it was selected by IBM Watson Health (IBM) to support its clinical COVID-19 vaccine program.
Among the notable losers was La-Z-Boy (LZB), which fell 2.3% after reporting quarterly results. Also lower were shares of Norwegian Cruise Line (NCLH) and Royal Caribbean (RCL), which were each downgraded to Equal Weight from Overweight by Barclays analyst Felicia Hendrix this morning.
INDEXES: The Dow fell 710.16, or 2.72%, to 25,445.94, the Nasdaq lost 222.20, or 2.19%, to 9,909.17, and the S&P 500 declined 80.96, or 2.59%, to 3,050.33.
Dell Technologies
+4.025 (+8.21%)
Acquired by AVGO
+3.435 (+2.30%)
Apple
-6.17 (-1.68%)
Disney
-4.53 (-3.89%)
Bayer
+ (+0.00%)
Plug Power
+1.13 (+17.57%)
iBio
+0.115 (+7.90%)
La-Z-Boy
-0.61 (-2.19%)
Norwegian Cruise Line
-2.24 (-12.42%)
Royal Caribbean
-6.06 (-11.14%)