Wall Street’s main indexes reversed course in the last hour, as a massive tech-fueled rally lost steam, plus more in today’s Closing Bell on Money & Markets.
The Top Story
The stock market was pushed higher on Monday on news of an experimental coronavirus vaccine receiving “fast track” designation by the Food and Drug Administration (see below for more).
But that didn’t last.
The move up fizzled out in the last hour of trading as some of the tech stalwarts of the current stock market rally reversed course. Share in FANG companies all sank at least 0.4% to close out the day. Netflix Inc. (Nasdaq: NFLX) fell over 4.2%.
Merger news also factored in investor sentiment as chipmaker Analog Devices Inc. (Nasdaq: ADI) agreed to buy rival Maxim Integrated Products Inc. (Nasdaq: MXIM) for $21 billion in stock.
PepsiCo Inc. (Nasdaq: PEP) kicked off the quarterly earnings season with positive news as it benefitted from an increase in its snack sales during the quarter.
Investors are bracing for what could be the sharpest decline in quarterly earnings for S&P 500 companies since the financial crisis.
The benchmark S&P 500 index briefly turned positive for the year on an intraday basis for the second time since the coronavirus crash. It’s still more than 5% below its February record high.
The Dow Jones was barely in the black, and rose 10 points or 0.04%. The S&P 500 fell 0.94%. The Nasdaq moved 2.13% higher and the Russell 2000 lost 1.22%.
Stock Market Update: Closing Bell*
S&P 500: 3,155 (-0.94%)
DOW: 26,085 (+0.04%)
NASDAQ: 10,390 (-2.13%)
RUSSELL 2000: 1,405 (-1.22%)
VIX: 32.28 (+18.29%)
GOLD: $1,804.80 (+0.16%)
BITCOIN: $9,220.75 (+0.1%)
U.S. 10-YEAR YIELD: 0.62% (-0.008)
*- as of 4:15 p.m.
A Big Win
In this morning’s Opening Bell, we told you to watch for Churchill Capital III Corp. (NYSE: CCXX) after the company agreed to a merger with MultiPlan Inc. The merger values Churchill at $11 billion. Shares of Churchill were up 3.7%.
We also told you about BioNTech SE (Nasdaq: BNTX) after its collaboration COVID-19 vaccine with Pfizer Inc. (NYSE: PFE) earned “fast track” status by the U.S. government. Shares of BioNTech shot up 10.5%, while Pfizer shares were 4.1% higher.
Finally, we mentioned Tesla Inc. (Nasdaq: TSLA) jumping on the prospect it could be listed on the S&P 500 index. It rose as high as 14% earlier in the day, but suffered a sell-off late to finish 3.1% lower.
Golden Nuggets
Gold prices topped the $1,800 level on Monday, underpinned by another record rise in coronavirus cases globally and the concern they may slow down recovering economies.
U.S.-China trade tensions and a record number of COVID-19 cases being reported on a daily basis are the underlying themes supporting the gold market.
Spot gold jumped 0.2% to trade at $1,802.70 an ounce. Gold futures pushed 0.1% higher to $1,804.70 an ounce.
Driving investors into safe-haven assets is China’s announcement of “corresponding sanctions” against the U.S. Monday after officials penalized Chinese officials over the treatment of Uighur Muslims.
Elsewhere in the futures market:
- Silver rose 2.1% to trade at $19.46 an ounce.
- Platinum was up 0.5% to $850.40 an ounce.
- Palladium moved 0.3% higher to $2,000.70 an ounce.
Cannabis Corner
Following a court settlement, the Los Angeles City Council approved doubling the number of social equity retail marijuana licenses from 100 to 200.
According to Marijuana Business Daily, the greater Los Angeles area has more than 13 million people and just 188 licensed retail cannabis storefronts.
Industry analysts suggest the city should “probably have far more” licensed shops to fulfill demand.
Homebuilders See Best June Since Last Housing Boom
Homebuilders are hitting a home run with a short supply of existing homes for sale and a flight to the suburbs because of the coronavirus pandemic.
That perfect storm has led to a 55% jump in sales of newly built homes in June, according to a survey by John Burns Real Estate Consulting.
It’s the fastest pace of growth since the height of the last housing boom in 2005 — which was driven by negligent lending in the subprime mortgage market.
The survey found the sales of new homes were strongest in the Northeast and Florida, where sales rose by 84% in both locations annually.
Today’s Big Winners:
S&P 500: Wynn Resorts Ltd. (Nasdaq: WYNN) +9.6%
Nasdaq: Maxim Integrated Products Inc. (Nasdaq: MXIM) +8.1%
Dow: Pfizer Inc. (NYSE: PFE) +4.1%
Today’s Big Losers:
S&P 500: Fortinet Inc. (Nasdaq: FTNT) -10.1%
Nasdaq: Analog Devices Inc. (Nasdaq: ADI) -5.8%
Dow: Microsoft Corp. (Nasdaq: MSFT) -3.1%
Check back for the most important news and numbers each day after the Closing Bell, only on Money & Markets.