Stocks are moving lower following the announcement from Texas of new closures on bars and restaurants while Arizona and Florida are also pausing some reopenings. The weakness in stocks is also being exacerbated by The Wall Street Journal's report that China is subtly warning the U.S. that it may risk the Phase One trade deal if the U.S. "meddles" in Hong Kong. "The U.S. side should refrain from going too far with meddling" and "red lines shouldn't be crossed," an unnamed official warned, according to the report.
ECONOMIC EVENTS: In U.S. data, personal income declined 4.2% in May, with consumption bouncing 8.2%. The University of Michigan consumer sentiment index came in at 78.1 in the final June print, a little below the 78.9 preliminary reading.
TOP NEWS: After the market close yesterday, the Federal Reserve Board released the results of its stress tests for 2020 and additional sensitivity analyses that the board conducted in light of the coronavirus event. The board noted that for Q3 of this year, it is requiring big banks to preserve capital by suspending share repurchases, capping dividend payments, and allowing dividends according to a formula based on recent income. The board is also requiring banks to re-evaluate their longer-term capital plans. Publicly traded large banks include Bank of America (BAC), Citi (C), Goldman Sachs (GS), JPMorgan (JPM), Morgan Stanley (MS), U.S. Bancorp (USB) and Wells Fargo (WFC).
Amazon (AMZN) confirmed the acquisition of self-driving car developer Zoox. While terms of the transaction were not disclosed by either company, Joann Muller of Axios reported that Amazon is paying $1.2B for Zoox.
On the earnings front, Nike (NKE) shares slipped 6% after the sneaker and apparel giant reported lower than expected Q4 results, with Nike Brand revenues for the quarter falling 38% year-over-year. The company noted that roughly 90% of its Nike-owned stores are now open, with retail traffic continuing to improve week-over-week.
Meanwhile, shares of Microsoft (MSFT) were 1.5% lower after announcing a strategic change in its retail operations, including closing physical Microsoft Store locations. The closing of the Microsoft Stores will result in a pre-tax charge of 5c per share to be recorded in the current quarter ending June 30, the company said.
Gap (GPS) shares surged 29% higher after the retailer announced a collaboration with rapper Kanye West to sell a new line of apparel for men, women and children known as Yeezy Gap. Following the announcement, Wells Fargo analyst Ike Boruchow said that the partnership could provide a positive halo effect to the ailing Gap brand, while KeyBanc analyst Matthew DeGulis said the partnership should help with younger shoppers.
Grocery store owner Albertsons (ACI) became the biggest IPO of the year with its public debut this morning. The stock opened at $15.50, below the pricing of $16 per share, but was back above $16 in trading around noon.
MAJOR MOVERS: Among the noteworthy gainers was Vaxart (VXRT), which jumped 55% after the company's COVID-19 vaccine was selected for the U.S. government's Operation Warp Speed. Also higher was CoreLogic (CLGX), which rose 25% after Cannae (CNNE) and Senator announced a proposal to acquire CoreLogic for $65 per share. Cannae shares were 3% higher after the news.
Among the notable losers was DBV Technologies (DBVT), which slid 14% after initiating a a global restructuring plan, which is expected to include a significant reduction in workforce, and citing the possibility of a delay in timelines for the Viaskin Peanut BLA review. Also lower was Apogee Enterprises (APOG), which fell 8% after reporting quarterly results.
INDEXES: Near midday, the Dow was down 599.21, or 2.33%, to 25,146.39, the Nasdaq was down 179.21, or 1.79%, to 9,837.79, and the S&P 500 was down 57.66, or 1.87%, to 3,026.10.
Amazon.com
-4.89 (-0.18%)
Nike
-5.6 (-5.52%)
Microsoft
-2.16 (-1.08%)
Gap
+2.595 (+25.52%)
Goldman Sachs
-15.44 (-7.45%)
JPMorgan
-4.75 (-4.85%)
Bank of America
-1.32 (-5.34%)
Citi
-2.575 (-4.89%)
Morgan Stanley
-1.905 (-3.90%)
U.S. Bancorp
-1.76 (-4.62%)
Wells Fargo
-1.73 (-6.32%)
Vaxart
+3.88 (+61.20%)
CoreLogic
+13.155 (+24.85%)
Cannae Holdings
+1.37 (+3.45%)
DBV Technologies
-0.75 (-13.89%)
Apogee Enterprises
-1.62 (-7.19%)
Albertsons
+ (+0.00%)