Stock market live Monday: Dow rises nearly 700, J&J vaccine hope, oil 18-year low

Stocks traded higher on Monday, building off of last week’s historic rally, where the Dow Jones Industrial Average and S&P 500 post their best 3-day win streaks since the 1930s. Sentiment was helped after President Donald Trump said national social distancing guidelines have been extended to April 30 and by optimism around a coronavirus treatment. Oil, however, fell to an 18-year low amid a pullback in global demand.

• The Dow Jones Industrial Average closed up 3.12% for its 4^th positive day in 5
• This month: the Dow is down 12.2%, on pace for its worst month since Oct 2008 when the Dow lost 14.06%
• This quarter: the Dow is down 21.76%, on pace for its worst quarter since the fourth quarter of 1987 when the Dow lost 25.32% and its worst first quarter ever
• The S&P 500 closed up 3.5% for its 4^th positive day in 5
• This month: The S&P 500 is down 11%, on pace for its worst month since Oct 2008 when the S&P lost 16.94%
• This quarter, the S&P 500 is down 18.7%, on pace for its worst quarter since the fourth quarter of 2008 when the S&P 500 lost 22.56% and its worst first quarter since 1938 when the S&P lost 19.43%
• The Nasdaq Composite closed up 3.46% for its 2^nd positive day in 3
• This month: Nasdaq is down 9.43%, for its worst month since Dec 2018 when the Nasdaq lost 9.48%
• Eleven out of 11 sectors were positive Monday led by Health Care up 4.67% — Francolla

U.S. stocks closed Monday near their highs of the session with the Dow Jones Industrial Average rising 688 points. Johnson & Johnson led the Dow’s gains, rising 8%, after the pharmaceutical company said it identified a lead vaccine candidate for the coronavirus. A 6% drop in Boeing shares capped the gains in the 30-stock average.The S&P 500 rose 3.35% and the Nasdaq rose 3.62%. — Fitzgerald

With about one hour left in the trading session, the major averages were headed for strong gains as they built on last week’s rally. The Dow was up more than 500 points, or 2.5%. The S&P 500 and Nasdaq were up 2.9% and 3.1%, respectively. Stocks rose after President Donald Trump extended national social distancing guidelines to April 30. Those measures, though feared for their potential impact on the U.S. economy in the near term, are seen by some investors as preventing long-term damage to the economy. — Imbert

U.S. oil dropped to an 18-year low on Monday as demand continues to evaporate and as Saudi Arabia and other OPEC+ nations prepare to ramp up production. With much of the world in lockdown as the coronavirus pandemic rages on, demand for oil has fallen off a cliff. People aren’t traveling and business has slowed, reducing the need for jet fuel and gasoline.
U.S. West Texas Intermediate crude futures fell 6.6%, or $1.42, to settle at $20.09, its lowest level since February 2002. Earlier in the session, the contract shed more than 9% to trade at a session low of $19.27. International benchmark Brent crude fell 9.2% to trade at $22.63 per barrel, a price last seen in 2002.
Despite WTI’s 55% slide this month, some analysts think there could be even more downside ahead. Raymond James analyst John Freeman said on Monday that a “nightmarish scenario” has been created and crude could “test the $10/bbl threshold.” — Stevens

Discussions between the United States and Russia about oil production are the best way to approach the global price war, Rapidan Energy president Bob McNally said on “The Exchange,” but the talks are too late to keep prices from falling further and global storage being filled. Futures contracts for the U.S. benchmark West Texas International briefly traded below $20 per barrel on Monday. “It’s too late to avoid mammoth stock builds and further price weakness, in my view. We’re really debating here how and when we come out of this,” McNally said. — Pound

The Cboe Volatility Index fell nearly seven points to trade at 58.82 on Monday. The index, which measures the future volatility of the S&P 500 implied by options trades, has not closed below 60 since March 13. The index, which goes back to 1990, notched an all-time closing high of 82.69 on March 16. — Pound

Stocks added to their gains in midday trading, with the Dow Jones Industrial Average rising more than 500 points. The S&P 500 and Nasdaq rose 2.3% and 2.67%, respectively. — Fitzgerald

The S&P 500 and Dow Jones Industrial Average are on pace for their worst first quarter ever.

• S&P 500 is down over 21% this quarter, on pace for its worst quarter since the fourth quarter of 2008 when the S&P lost 22.56% and its worst first quarter ever
• Dow Jones Industrial Average is down over 24% on pace for its worst quarter since the fourth quarter of 1987 when the Dow lost 25.32% and its worst first quarter ever
• Russell 2,000 small caps on pace for worst quarter ever
• Dow Transports are down 30.3% this quarter on pace for their worst ever (back through CNBC’s history to 1978) — Francolla, Fitzgerald

Shares of airplane maker Boeing fell more than 11% on Monday, the biggest drag on the Dow Jones Industrial Average, which attempted a rally. Boeing’s stock has lost nearly half of its value this month alone, as the coronavirus has dented the travel and aerospace industry. Despite President Donald Trump saying the government would support Boeing, a top U.S. defense contractor and one of the two biggest airplane makers in the world, the stock has continued to crater on fears of a continued shutdown of the aviation industry. Last week, Boeing stock gained 70% on hopes of a government bailout, but Monday’s sell-off demonstrates the rebound may be overdone. — Fitzgerald

CNBC’s Jim Cramer argued that stock market short-sellers are unwisely doubting the ability of scientists to slow the spread of COVID-19. “This is a day where you say, if I’m short I’m betting against science, not betting against the lackadaisical attitude of many people in the country, ” Cramer said on “Squawk on the Street.” —Stankiewicz

Shares of Citrix Systems rose 1.2% on Monday to an all-time high since its IPO in 1995. Citrix offers virtual-desktop technology that makes it possible for employees to access corporate programs when they’re offsite. The company has seen a surge in demand as the coronavirus pandemic forced more and more people to work from home. The stock has soared 28% in 2020, while the broad market suffered a historic sell-off. — Li

Homebuyer demand was strengthening markedly just before COVID-19 began its spread across the U.S. Pending home sales, which measure signed contracts on existing homes, rose a stronger-than-expected 2.4% in February compared with January. Sales were up a steep 9.4% annually, according to the National Association of Realtors. That is the highest pace in exactly three years. —Olick

• Jefferies upgraded Procter & Gamble and Kimberly-Clark to buy from hold.
• Bernstein upgraded Northrop Grumman to outperform from market perform.
• BMO upgraded Alphabet to outperform from market perform.
• Wells Fargo upgraded Nike, Canada Goose, Ulta and TJX Companies to overweight from equal weight.
• Raymond James upgraded Amgen to outperform from market perform.
• RBC downgraded Marriott to sector perform from outperform.
• Goldman Sachs upgraded Sherwin Williams to buy from neutral and added it to the firm’s conviction buy list.
• Gordon Haskett downgraded 3M to underperform from hold.
• Berenberg upgraded Hostess Brands to buy from hold.
• Stifel upgraded Mondelez to buy from hold. —Bloom

Economist Mohamed El-Erian told CNBC on Monday that investors should not buy the indexes yet, but said that selective buying of individual stocks could work. “If you feel it’s the all clear, go out and buy the index,” the chief economic advisor at Allianz said on “Squawk Box.” But he said, “We’re not in an all clear.” El-Erian, former CEO of investment giant Pimco, said he feels that the time of “selling everything” passed a few weeks ago. — Stankiewicz

Major financial stocks were down in early trading Monday as the 10-year Treasury yield fell back below 0.7%. Citi and Citizens Financial both tumbled more than 4%, while Wells Fargo dropped 3.4%. Morgan Stanley and Goldman Sachs both slipped more than 2% while JPMorgan was trading 1.9% lower than its Friday close. — Pound

After a volatile overnight trading session in the futures market, stocks opened higher on Monday. The Dow rose 203 points for a 0.9% gain, while the S&P 500 and Nasdaq Composite gained 1.3% and 1.4%, respectively. Stocks are extending last week’s strength after President Trump said on Sunday that the social distancing guidelines will remain in place until April 30, which could help curb the long-term economic damages from the coronavirus. – Stevens

Johnson & Johnson said human testing of its experimental vaccine for the coronavirus would begin by September and that it could be available for emergency use authorization in early 2021.

J&J also said it has committed more than $1 billion of investment along with U.S. agency Biomedical Advanced Research and Development Authority, which is part of the Department of Health and Human Services, to co-fund vaccine research. — Feuer

The Dow and S&P 500 are coming off their best weeks since 1938 and 2009, respectively, but RBC said the rally may not last. “We remain skeptical about the durability of last week’s rebound,” head of U.S. equity strategy Lori Calvasina said in a note to clients Monday. The firm said the S&P 500 could reach 2,730 – 7% above where it closed Friday – before turning lower again. – Stevens

GM shares rose 4.2% in premarket trading as of 8:45 a.m. ET, signaling a partial bounce in the automaker’s fortunes after a slide of nearly 43% over the last six months. The pop in General Motors equity comes less than 24 hours after President Donald Trump praised the company on Sunday after the company announced it’s begun making badly needed ventilators. “General Motors is doing a fantastic job. I don’t think we need to worry about General Motors,” he said Sunday.

Trump had lambasted GM before Sunday for dragging its feet in negotiations and had accused the company of “wasting time.” The president on Friday invoked the Defense Production Act to force the company to begin making the equipment. – Franck

Oil is coming off its fifth straight week of declines, and prices dropped again on Monday as demand continues to evaporate. U.S. West Texas Intermediate crude dropped 6.5% to trade at $20.12 per barrel, after earlier trading as low as $19.92 per barrel. International benchmark Brent crude shed 9% to trade at $22.82, after previously hitting a more than 17-year low of $22.58. Oil demand has fallen as the coronavirus outbreak has halted travel and slowed business activity worldwide. On Sunday President Donald Trump said he was extending the country’s social distancing guidelines through April 30, sparking new fears about the impact on crude. CNBC’s Jim Cramer said Sunday night in a tweet that if WTI trades below the $20 mark it will trigger “big algo selling.” – Stevens

Even with last week’s record-breaking economic package signed, congressional lawmakers of both parties are already sketching another emergency spending bill to prevent a depression. Though debate isn’t expected to begin on a fourth package until April at the earliest, U.S. legislators remain concerned about stressed state-government budgets and ensuring the benefits of the third bill are sustained for those furloughed or who have lost their jobs. President Donald Trump signed a $2 trillion coronavirus relief bill on Friday that includes one-time payments to individuals, reinforced unemployment insurance and additional health-care funding. — Franck

Society will change in ways it hasn’t since the Sept. 11 terror attacks, meaning that the recovery may not take a “V” shape, according to Peter Boockvar, chief investment officer at Bleakley Advisory Group . The world ahead will focus on disease prevention where “restaurants will likely have less tables. Maybe for a time airlines won’t sell middle row seats and we’ll just have window and aisle. Those without the antibodies will be walking around with masks, we won’t be shaking hands, [Purell] will be everywhere, there will be spacing on lines, ZOOM becomes the preferred choice of meeting venue, etc…” Boockvar said in a note. He added that he thinks growth will be “gradual” as companies are more interested in building cash balances than spending on personnel and where “we can say goodbye to many stock buyback plans.” Stocks also could be slower to recover as investors are less willing to pay up for earnings and the Fed’s efforts are less effective. – Cox

Companies with outsized exposure to the novel coronavirus, and its spread, slumped again in premarket trading Monday after the number of U.S. cases jumped again over the weekend. Cruise line companies Carnival and Norwegian dropped 10% and 9% respectively. American, Southwest and United Airlines fell 6%, 4.4% and 8.1%. Expedia and car-rental company Hertz dropped 0.6% and 0.5%. — Franck

Shares of Google-parent company Alphabet rose more than 1% in premarket trading on Monday after BMO upgraded the stock to “outperform” from “market perform.” “We expect our mega-caps to be popular upon rebound, and we think there are important relative fundamental differences that nudge GOOGL into Outperform territory,” BMO analyst Daniel Salmon said in a note on Monday. The bank said it favors Alphabet over Facebook for the company’s higher exposure to larger enterprises, as well as its YouTube subscription business which is benefiting from consumers staying at home. BMO kept its 12-month price target of $1,400 on Alphabet, representing a 26% gain from Friday’s close of $1,110. – Li

Shares of Abbott rose 10% in premarket trading after the company received an emergency use authorization for its new coronavirus test. The test is designed to deliver positive test results within 5 minutes and negative results within 13 minutes. The company said it plans to ship the tests to some health care providers this week. — Pound

The coronavirus pandemic has brought U.S. business and consumer activity to a halt, with every sector feeling the effects of most of the country’s workforce staying home. With few official measures available to gauge the scope of the economic damage, satellite imagery and alternative data show the widespread effects of the current nationwide isolation recommendations. The U.S. situation is stark: Airplanes are parked on unused runways, the busiest highways are empty during rush hour, resorts have become ghost towns, ports are seeing sharp drops in shipping activity and more. – Sheetz

For investors wondering if last week’s big bounce signaled a bottom, Goldman Sachs warned that more selling is ahead and three things need to occur before the market hits a turning point. “A three-part checklist for a sustained rally: (1)Slowing viral spread; (2) Evidence that fiscal and monetary policy stimulus is working; and (3) A bottoming in investor positioning and flows,” said David Kostin, Goldman’s chief U.S. equity strategist.

Goldman said sharp bounces like last week’s are common during bear markets. During the financial crisis, the S&P 500 experienced six bounces of 9% or more between September and December 2008, with some rallies as large as 19%. However, the actual market bottom did not occur until March 2009, Kostin said. – Li

President Donald Trump announced Sunday that the social distancing guidelines from the Centers for Disease Control and Prevention have been extended until April 30. Trump said his previous statements about the country lifting the Guidelines on Easter, which is April 12, were an “aspiration.” White House health advisor Anthony Fauci said Sunday that the country could see between 100,000 and 200,000 deaths from the pandemic. — Pound

U.S. stock index futures were little changed ahead of Monday’s open as markets look to extend last week’s strength. While stocks moved lower on Friday, the major averages still managed to post gains for the week — and then some. It was the Dow Jones Industrial Average’s best week since 1938, while the S&P 500 and Nasdaq Composite registered their largest weekly jump since 2009.

Investors cheered the $2 trillion stimulus package aimed at combating the coronavirus-induced economic slowdown, as well as actions from the Federal Reserve, which include an open-ended asset-purchase program.

But volatility remains the name of the game. Some Street strategists say the bottom is in, while others believe stocks are in for more pain ahead as the worldwide economic impacts of the pandemic continue to reverberate. The United States now has the greatest number of coronavirus cases worldwide, and on Sunday night President Donald Trump said he was extending the national social distancing guidelines to April 30. He had previously said he hoped the economy would “open” back up by Easter Sunday on April 12.

On Monday, the Dow was set to open 25 points lower, while stock futures pointed to small gains for the S&P 500 and Nasdaq. Futures were volatile once again in overnight trading. – Stevens

CNBC’s Michael Sheetz, Thomas Franck, Jeffrey Cox, Kevin Stankiewicz, Maggie Fitzgerald and William Feuer contributed reporting.

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