Stocks mostly slipped after a lackluster trading session Monday as investors prepare for a potentially painful earnings season due to the coronavirus pandemic, plus more in today’s Closing Bell on Money & Markets.
The Top Story
After a strong rally in a shortened trading week — the best since 1974 — due to Good Friday, investors pulled back today as they get ready for what is expected to be a rough earnings season.
Earnings for S&P 500 firms are expected to tumble 10.2% in the first quarter, compared with a Jan. 1 forecast of a 6.3% rise, before plummeting 22.4% in the second quarter as sweeping lockdowns halt business activity and spark furloughs and layoffs.
“This week will be somewhat of an inkblot test,” said Mike Loewengart, managing director of investment strategy at E-Trade Financial Corp. in New York.
The S&P 500 has recovered about 24% since hitting a three-year low in March, powered by aggressive U.S. monetary and fiscal stimulus and early signs of a potential flattening of U.S. coronavirus cases. However, the index remains about 19% below its mid-February record high.
The S&P banking subsector shed around 3.8% despite a rise in Treasury yields, as JPMorgan Chase & Co. (NYSE: JPM) and Wells Fargo & Co. (NYSE: WFC) prepared to kick off the reporting season on Tuesday, with analysts expecting a bleak outlook for the year.
On a brighter note, Amazon.com Inc. (Nasdaq: AMZN) gained 6.1% as the retail giant said it would hire 75,000 more people amid a surge in demand for online orders.
The Dow Jones fell 1.4%. The S&P 500 fell 1%, and the Nasdaq Composite rose 0.5%, bolstered by Amazon.
Stock Market Update: Closing Bell*
S&P 500: 2,761 (-1%)
DOW: 23,390 (-1.4%)
NASDAQ: 8,192 (+0.5%)
GOLD: $1,765.30 (+0.7%)
BITCOIN: $6,799.50 (-4.8%)
U.S. 10-YEAR YIELD: 0.75%
*- as of 4:17 p.m.
A Big Win
In this morning’s Opening Bell, we told you to watch for Caterpillar Inc. (NYSE: CAT) as the company was downgraded to “underperform” by Bank of America Corp. (NYSE: BAC). Shares of the American machinery manufacturer fell 8.7%.
We also told you to be on the lookout for Gilead Sciences Inc. (Nasdaq: GILD) after it reported “clinical improvement” for its remdesivir drug on coronavirus patients. Shares of Gilead Sciences were up 2.4%
Alnylam Pharmaceuticals Inc. (Nasdaq: ALNY) shares were up 2.2% after it was reported the company is getting a $2 billion investment from Blackstone Group Inc. (NYSE: BX) to further develop RNA interference medicines.
Golden Nuggets
Gold prices started the day strong and continued a bullish move upward, hitting a 7 ½-year high in afternoon trading.
The precious metal also benefited from the sell-off in the equities market. Gold futures were up 0.7% to $1,765.10 an ounce. Silver futures, however, fell 2.2% to $15.70 an ounce.
Platinum rose 0.6% to trade at $753.50 while palladium was up 0.8% to $2,126.60 an ounce.
Cannabis Corner
Virginia Gov. Ralph Northam approved the state’s cannabis decriminalization bill over the weekend, but he had some recommended amendments.
According to Marijuana Moment, Northam suggested removing an opt-out of a federal statute that automatically suspends the driver’s license of anyone convicted of a drug-related offense.
Virginia is one of six states that continue to suspend licenses for drug convictions that have nothing to do with operating a motor vehicle. Alabama, Arkansas, Florida, Michigan, Mississippi and Texas are the others.
Small Businesses Apply for $210 Billion in Aid, Payouts Slow to Happen
Around 860,000 applications have already been approved for $210 billion in loans as part of the federal government’s Paycheck Protection Program.
But CNBC reports that dispersing the funds has been problematic as banks said they don’t have clarity from the Small Business Association or the Department of the Treasury on how those funds should be handled.
“Banks are absolutely beginning to fund, and you’re going to see those numbers grow dramatically,” Rob Nichols, president of the American Bankers Association told CNBC. “We are still seeking some areas of guidance around some of the contours of the program.”
Some banks, however, have begun dispersing the loans as they believe they have enough assurances from the federal government.
Today’s Big Winners:
Tesla Inc. (Nasdaq: TSLA) +13.6%
Netflix Inc. (Nasdaq: NFLX) +7%
Walmart Inc. (NYSE: WMT) +2.9%
Today’s Big Losers:
Royal Caribbean Cruises Ltd. (NYSE: RCL) -17%
United Airlines Holdings Inc. (Nasdaq: UAL) -8.2%
Caterpillar Inc. (NYSE: CAT) -8.7%
Check back for the most important news and numbers each day after the Closing Bell, only on Money & Markets.