U.S. markets mounted a monstrous comeback after the worst week since the throes of the Great Recession, plus more in today’s Closing Bell on Money and Markets.
The Top Story
Trading was volatile on Monday, but U.S. equities markets started the process of making up for the significant ground they lost last week — and they did it in a big way today.
Earlier in the day, the Dow Jones Industrial Average jumped as much as 800 points before retreating after key U.S. manufacturing numbers showed a slowdown in February. However, all three major indexes rallied into the close.
The Dow Jones saw it’s best single-day gain since 2009 after rising 1,293 points, or 5.1%. The S&P 500 posted gains of 4.6% and the Nasdaq rose 4.5%.
All three indexes fell into correction territory last week as they dipped at least 10% from their previous highs, thanks to increased fears over the spread of the coronavirus.
On Monday, previously hard-hit tech stocks started to rebound. Apple Inc. (Nasdaq: AAPL) moved up 9.3% while Western Digital Corp. (Nasdaq: WDC) jumped 8.1%.
Travel-related stocks continued to take a hit, however. American Airlines Group Inc. (Nasdaq: AAL) fell 1% and United Airlines Holdings Inc. (Nasdaq: UAL) dropped 0.5%.
Investors were more confident in the markets after CMS Group’s FedWatch tool indicated a 100% likelihood the Federal Reserve will institute a 50 basis-point rate cut this month.
As of 415 p.m. Eastern time, the Dow was up 2.3% to 26,014. The S&P 500 index jumped 1.8% while the Nasdaq Composite moved up 1.8%.
Money and Markets: Closing Bell*
S&P 500: 3,090 (+136 points, +4.6%)
DOW: 26,703 (+1293 points, +5.1%)
NASDAQ: 8,952 (+384 points, +4.5%)
GOLD: $1,587.80 (+$2.30, +1.5%)
BITCOIN: $8,929.99 (+$429.362, +5%)
U.S. 10-YEAR YIELD: 1.14%
*- as of 4:15 p.m.
A Big Win
As we told you in this morning’s Wall Street Wake-Up, the travel industry has been hammered by the spread of the coronavirus. Carnival Corp. (NYSE: CCL) shares tumbled an additional 1.2% in afternoon trading.
News of hedge fund Elliott Management buying a large stake in Twitter Inc. (NYSE: TWTR) and the possible ouster of Twitter CEO Jack Dorsey pushed the stock up 8%.
After news that Gilead Sciences Inc. (Nasdaq: GILD) was spending $4.9 billion to acquire it, shares of Forty Seven Inc. (Nasdaq: FTSV) skyrocketed 61.9% in the afternoon trading session.
M&A News
Gilead Sciences Inc. (Nasdaq: GILD) is acquiring cancer treatment specialists Forty Seven Inc. (Nasdaq: FTSV) for $4.9 billion. The deal includes Forty Seven shareholders to get $95.50 per share.
Storage companies WillScott Corp. (Nasdaq: WSC) and Mobile Mini Inc. (Nasdaq: MINI) are merging in a deal valued at nearly $6.6 billion.
Golden Nuggets
Late last week, gold futures suffered a solid drop, along with equities markets. However, gold futures rebounded Monday.
Futures were up 1.9% to $1,597.10 an ounce. Silver futures also saw a 1.9% increase in the afternoon to $16.77 an ounce.
Platinum continued to struggle after last week’s losses, dropping another 0.2% to $862.50 an ounce. Palladium, a precious metal that actually went up late last week, suffered a $90-per-ounce loss to $2,300 an ounce Monday.
Cannabis Corner
Canadian producer Tilray reported a bigger quarterly loss Monday, sending its share prices cratering after the closing bell. Tilray was up 6.4% at Monday’s close but fell more than 12.5% in after-hours trading. The company’s net loss rose to $219.1 million, or $2.14 a share for Q4 2019, up from $31.0 million, or 33 cents a share, year over year.
Tilray took a non-cash charge of $112.1 million in the reported quarter.
Revenue more than tripled to $46.9 million.
Reform advocates in Oregon have launched a measure to decriminalize low-level possession of all drugs statewide.
The measure would also help fund the expansion of access to drug treatment by taking money from the state’s existing marijuana tax revenue and creating addiction recovery centers.
While the bill would not legalize all drugs, it would decriminalize small amounts to be just civil infractions rather than misdemeanors.
IP 44 can save lives and help so many people who are struggling. <3 if you agree with Brent that it's time for a better approach to drug addiction. pic.twitter.com/p9vfXmRgWe
— More Treatment. A Better Oregon. (@moretreatment) February 22, 2020
As of Friday, the campaign collected more than 48,000 signatures for a petition to put the measure on the November 2020 ballot. Those signatures would need to be validated.
Stock Market Update
It was a slow growth for U.S. manufacturing in February.
According to the Institute for Supply Management, its purchasing index fell to 50.1 in February from 50.9 in January. February’s numbers were below expectations of 50.8 and were the lowest since late 2019.
However, the number remained slightly above 50, which indicates growth — albeit really slow growth.
The index for new orders dropped to 49.8 from 52 in January while production was 50.3, down from 54.3 in January.
The ISM said global supply chains were being negatively impacted by the coronavirus outbreak. Food, beverage and tobacco products were the strongest of the manufacturing industries, while petroleum and coal products were the weakest.
Transportation equipment also reported contraction in February.
Today’s Big Winners:
(as of 3:15 p.m. EST)
Costco Wholesale Corp. (Nasdaq: COST) +7.3%
Twitter Inc. (NYSE: TWTR) +6.8%
Apple Inc. (Nasdaq: AAPL) +6%
Walmart Inc. (NYSE: WMT) +5.4%
Merck & Co. Inc. (NYSE: MRK) +4.2%
Today’s Big Losers:
(as of 3:15 p.m. EST)
Norwegian Cruise Line Holdings Ltd. (NYSE: NCLH) -7.3%
Carnival Corp. (NYSE: CCL) -4.3%
Macy’s Inc. (NYSE: M) -3.8%
American Airlines Holdings Inc. (Nasdaq: AAL) -3.8%
United Airlines Holdings Inc. (Nasdaq: UAL) -3.8%
Check back for the most important news and numbers each day after the Closing Bell, only on Money and Markets.
Don’t forget about “Marijuana Markets: a POTcast,” featuring the biggest cannabis news and investment notes from Banyan Hill’s Anthony Planas, here on Money and Markets each Saturday morning.