U.S. stock markets tanked late as investors weighed the risks of reopening the economy too soon following the ease of coronavirus restrictions, plus more in today’s Closing Bell on Money & Markets.
The Top Story
Leading U.S. infectious disease expert Anthony Fauci warned Congress during a hearing that a premature opening of the nation’s economy could lead to additional outbreaks of the novel coronavirus.
That pushed the stock market down in the last hour of trading after all three indexes made headway toward decent gains earlier in the day.
Optimism about an economic recovery and massive stimulus measures have helped the benchmark S&P 500 index climb around 34% from the lows of a pandemic-driven selloff in March.
Wall Street’s fear gauge slipped for the fourth day running, hitting a 10-week low, even as data showed U.S. consumer prices in April dropped by the most since the Great Recession (more below).
Among the 11 major sectors, financial stocks, which generally lag when the economic outlook dims, weighed the most on the S&P 500.
Also dragging the sector lower was a 7.8% fall for BlackRock Inc. (NYSE: BLK) after its top shareholder, PNC Financial Services Group Inc. (NYSE: PNC), announced plans to sell its entire 22% stake in the world’s largest asset manager.
Among other stocks, online food delivery company GrubHub Inc. (NYSE: GRUB) surged 29% after a person familiar with the matter said Uber Technologies Inc. (NYSE: UBER) was in advanced talks to buy the company in an all-stock deal.
The Dow Jones fell 1.89%. The S&P 500 was 2.05% lower and the Nasdaq was off by 2.06%.
Stock Market Update: Closing Bell*
S&P 500: 2,870 (-2.05%)
DOW: 23,764 (-1.89%)
NASDAQ: 9,002 (-2.06%)
GOLD: $1,706.20 (+0.483%)
BITCOIN: $8,814.57 (+0.76%)
U.S. 10-YEAR YIELD: 0.664% (-0.062%)
*- as of 4:12 p.m.
A Big Win
This morning, we told you to keep an eye on Tesla Inc. (Nasdaq: TSLA) after CEO Elon Musk reopened the company’s Fremont, California, facility despite orders not to. President Donald Trump also tweeted support of the reopening. Shares of Tesla were up 0.2%.
California should let Tesla & @elonmusk open the plant, NOW. It can be done Fast & Safely!
— Donald J. Trump (@realDonaldTrump) May 12, 2020
We also told you about Novavax Inc. (Nasdaq: NVAX). The vaccine company received up to $388 million in funding to advance its COVID-19 vaccine candidate. Shares of Novavax jumped more than 62%.
Golden Nuggets
Most precious metals rose gave away early gains as equities and the U.S. dollar faded.
Gold futures pushed 0.47% higher to trade at $1,706 an ounce. Silver futures were down 0.1% to $15.66 an ounce.
Platinum futures dropped 1.1% to $772.50 an ounce while copper fell 1.5% to $2.34.
Palladium futures increased 0.3% to trade at $1,834.10 an ounce.
Cannabis Corner
Canadian cannabis producer Tilray Inc. (Nasdaq: TLRY) said it lost $184.1 million in the last quarter — better than the $219.1 million it lost in the previous quarter.
According to its quarterly report, the company’s international medical cannabis sales were 43% higher than those in Canada. Adult-use sales and hemp product sales also boosted an 11% growth in revenue.
Consumer Prices Suffer Biggest Monthly Drop Since 1957
In April 2020, the Consumer Price Index had its biggest drop since 1957.
According to the Bureau of Labor Statistics, the CPI, excluding food and energy prices, fell 0.4%. The biggest drops came in apparel and transportation — both fell 4.7%. Commodities were down 0.7% while medical care services slipped 0.5%.
Food at home prices jumped 2.6%, but energy prices fell 10.1% due to a 20.6% drop in gasoline.
Today’s Big Winners:
ONEOK Inc. (NYSE: OKE) +5%
Abbvie Inc. (NYSE: ABBV) +3.3%
Today’s Big Losers:
Welltower Inc. (NYSE: WELL) -5.4%
BlackRock Inc. (NYSE: BLK) -7.8%
Ulta Beauty Inc. (Nasdaq: ULTA) -8%
Check back for the most important news and numbers each day after the Closing Bell, only on Money & Markets.
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