U.S. markets continue their downward, coronavirus-inspired spiral, plus more in today’s Closing Bell on Money and Markets.
The Top Story
It was an up and down … and up and then way down again day for U.S. markets.
When things first kicked off, equities were down, but not too sharply (though, Dow futures were down 400 points by midnight before ticking up). Stocks rebounded only to crater again to finish off the worst point drop in history for the Dow Jones Industrial Average.
The week-long drop has been fueled by bad daily news about the coronavirus outbreak. On Thursday, California Gov. Gavin Newsom said the state was monitoring 8,400 people for the coronavirus, also known as COVID-19.
The rollercoaster capped yet another day of losses. The Dow has lost more than 11% this week.
But the Dow wasn’t alone. The S&P 500 is also down 10.8% for the week. All three major U.S. indexes dropped into correction territory — 10% down from a record close. The Dow reached record highs two weeks ago, while the Nasdaq and S&P 500 also set records last week.
In a strange piece of news, the Toronto Stock Exchange actually halted trading in the afternoon due to a technical issue.
Even before the halt, trading volume had exceeded the 30-day average.
The Dow Jones Industrial Average fell 4.4%. The S&P 500 fell 4.4% and the Nasdaq Composite lost 4.6%.
Money and Markets: Closing Bell*
S&P 500: 2,978 (-137 points, -4.4%)
DOW: 25,766(-1190 points, -4.4%)
NASDAQ: 8,566 (-414 points, -4.6%)
GOLD: $1,638.10 (-$2.70, -0.1%)
BITCOIN: $8,880.02 (+$68.96, +0.7%)
U.S. 10-YEAR YIELD: 1.27%
*- as of 4:06 p.m.
A Big and a Big Loss
It was a good fourth quarter for Square Inc. (NYSE: SQ) as it reported a 41% year-over-year increase in revenue. The company also said it expects more of the same in the coming quarter. Square rose 3.4%.
In this morning’s Wall Street Wake-Up, we told you about Microsoft Corp. (Nasdaq: MSFT) reporting it would miss its revenue guidance in the next quarter in its largest division. Shares of the tech giant fell 7%.
M&A News
Financial services company INTL FCStone Inc. (Nasdaq: INTL) has agreed to acquire Gain Capital Holdings Inc. (NYSE: GCAP) for $236 million in an all-cash transaction. INTL offered $6 per share in the deal.
Golden Nuggets
Gold futures remained relatively unchanged this afternoon despite another day of pullback among equities. Gold had gained nearly $20 an ounce earlier in the day, but those gains were pared later.
Futures for gold were down 0.1% to $1,640 an ounce. Silver futures dropped 1.2% and went below $18 per ounce for the first time in a week. Futures were at $17.73 per ounce.
Platinum was down around $13.80 to $901 an ounce while palladium hit a record high of $2,777 an ounce.
Cannabis Corner
The Vermont House of Representatives approved legislation to legalize recreational marijuana use in the state.
That opens the door to a market valued between $130 million and $160 million within five years of launching.
Vermont’s senators approved a similar measure, but the deal is not done. There are still taxation and other differences in the two bills that need to be resolved before it goes to Gov. Phil Scott for his signature.
If the bill becomes law, Vermont would be the third state in the Northeast to legalize cannabis use — Maine and Massachusetts are the others.
Vermont’s bill calls for the state to start licensing retail cannabis stores by July 2021.
Stock Market Update
There was economic growth in the fourth quarter of 2019, but the road ahead for even more growth in 2020 is bumpy.
The U.S. gross domestic product rose 2.1%, according to the Commerce Department’s second estimate of fourth-quarter GDP. That matched the growth pace of the previous quarter.
Economic growth for 2019 was 2.3% — the slowest growth in three years.
Taking out trade, inventories and government spending, the economy grew just 1.3% in the fourth quarter — the slowest in four years.
Business investment fell 2.3%, marking the third straight quarterly decline.
The news came after Goldman Sachs Group Inc. (NYSE: GS) analysts trimmed their Q1 2020 GDP growth estimates to 1.2% and projected zero earnings growth for U.S. companies in 2020.
Today’s Big Winners:
Quanta Services Inc. (NYSE: PWR) +6.3%
Apache Corp. (NYSE: APA) +2.6%
3M Co. (NYSE: MMM) +0.8%
Wynn Resorts Ltd. (Nasdaq: WYNN) +0.3%
Today’s Big Losers:
FLIR Systems Inc. (Nasdaq: FLIR) -17.8%
Tesla Inc. (Nasdaq: TSLA) -12.8%
Chipotle Mexican Grill Inc. (NYSE: CMG) -10.8%
Lululemon Athletica Inc. (Nasdaq: LULU) -7.5%
Microsoft Corp. (Nasdaq: MSFT) -7%
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.