Stock market futures were pointed down on Wednesday as investors shied away from risky bets with many states battling to fight a spike in coronavirus infections, plus stocks to watch today in the Money & Markets Opening Bell.
The Top Story
Washington state made wearing face masks mandatory in public places. Many states — including Arizona and Texas — saw record coronavirus infection cases.
The top U.S. infectious disease official said the next two weeks could be critical in containing the outbreak.
U.S. airlines, resorts and cruise lines, among the worst hit by the pandemic’s fallout, slipped in premarket trading with United Airlines Holdings Inc. (Nasdaq: UAL), Royal Caribbean Cruises Ltd. (NYSE: RCL) and Carnival Corp. (NYSE: CCL) falling between 3% and 4.5%.
Lenders, who tend to outperform when the economy improves, also fell. Bank of America Corp. (NYSE: BAC), Citigroup Inc. (NYSE: C) and Goldman Sachs Group Inc. (NYSE: GS) dropped by more than 1%.
Strong economic data and massive stimulus measures have pushed the Nasdaq to a record level and put the benchmark S&P 500 on track for its best quarterly performance since 1975.
As of 9:20 a.m. EDT, Dow Jones futures were down 0.58%. S&P 500 futures were off by 0.45% and Nasdaq futures fell by 0.14%.
Stocks to Watch Today
Peloton Interactive Inc. (Nasdaq: PTON) — After hitting a record high on Tuesday, shares of the exercise equipment company jumped nearly 3% after Cowen Inc. raised its price target to $70 per share. That’s the highest analyst price target, listed by FactSet, by $8.
VMware Inc. (NYSE: VMW) — There’s more on this below, but the cloud software company got a boost after reports that Dell Technologies Inc. (NYSE: DELL) is exploring a potential spinoff of its stake in VMware. As a result, shares of VMware were up 9.2% in premarket trading.
Draftkings Inc. (Nasdaq: DKNG) — The sports betting company recently announced, priced and closed a secondary offering of stock at $40 per share in just three days. The sale brought in around $640 million before underwriter fees. Shares of Draftkings were up 2.1%
Homebuyer Mortgage Demand Remains High
Purchase mortgage application volume fell 3% from the previous week, but remains 18% higher than a year ago, according to the Mortgage Bankers Association.
Homebuyer mortgage applications have surged for the last five weeks as buyers looked for more space and escape from urban apartments.
Applications to refinance a home loan fell 12% for the week but remained 76% higher than the same time last year. The refinance share of mortgage activity fell to 61.3% of the total applications from 63.2% the week before.
The average contract interest rate for 30-year fixed mortgages with loan balances up to $510,400 remained unchanged at 3.30%. Points including origination fees increased to 0.32 for loans with a 20% down payment.
Dell Exploring Spinoff of $50B Stake in VMware
In an effort to boost its sluggish sales, Dell Technologies Inc. (NYSE: DELL) is looking at different options, including a spinoff for its $50 billion stake in VMware Inc. (NYSE: VMW)
Other steps could include buying the rest of the cloud-software company, according to a report in The Wall Street Journal.
The companies are reviewing options with the intent of addressing the gap between Dell’s market value — around $36 billion — and the value of its 81% stake in VMware.
US Looking at $3.1 Billion of Imports from Europe for Tariffs
While the trade deal with China garners a lot of attention, the Trump administration is looking at Europe for the next round of tariffs.
According to Bloomberg, the U.S. is weighing new tariffs on $3.1 billion of exports from France, Germany, Spain and the United Kingdom.
The U.S. Trade Representative is eyeing new tariffs on olives, beer, gin and trucks, while increasing duties on things like aircraft, cheese and yogurt, according to a notice published late Tuesday.
What We’re Reading
Gold or Bitcoin: Which Is the Better Buy for You Right Now (Money & Markets)
Square Has Started Keeping 30% of Some Retailers’ Payments (CNN Business)
What Investors Need to Watch With the China Trade War Back in the News (Money & Markets)
Earnings Report
Here are the companies releasing earnings reports today:
BlackBerry Ltd. (NYSE: BB)
KB Home (NYSE: KBH)
Patterson Companies Inc. (Nasdaq: PDCO)
Sotherly Hotels Inc. (Nasdaq: SOHO)
Winnebago Industries Inc. (NYSE: WGO)
Check back each morning before the opening bell for stocks to watch today with Opening Bell, here on Money & Markets.