Stock market live updates: Dow up 450, oil on pace for best day ever, Chipotle rallies 8%

Stocks bounced from a two-day sell-off as oil prices recovered some of their deep losses. Investors also digested the latest earnings report to gauge the health of corporate America in the age of coronavirus crisis. Here’s what’s happening:

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American Petroleum Institute Mike Sommers said on “The Exchange” that the proposal by the Texas Railroad Commission to limit oil production in the state would cause long-term damage to the industry.” We believe that the market is providing the best signal for producers to not produce at this time … And we don’t think that it’s important for the government to get involved with this industry right now,” Sommers said. He also said that the Institute opposes the idea of paying oil companies not to produce, which some have suggested as a way to incentivize oil companies to cap their wells. “We would be concerned about any policy proposals that would propose keeping oil in the ground and paying producers for not producing,” Sommers said. — Pound

The United States Oil Fund, a popular exchange-traded security known for its USO ticker, announced another change to the fund’s makeup on Wednesday as it tries desperately to retain investors after a 77% drop this year. USCF, the manager of the fund, said that it will execute a one-for-eight reverse share split for USO that will go into effect after the close on April 28. A reverse stock split reduces the number of shares outstanding, but raises the price of the stock. —Stevens

An increase in air pollution in China leads Morgan Stanley to believe that Apple’s industrial production is back to normal following the coronavirus crisis. The Wall Street firm, which recommends buying Apple’s stock, tracks for nitrogen dioxide levels in China’s air quality, a first-level indicator of industrial activity. Based on the data, Apple’s factories are working at a high-than-normal rate, the firm said. “Air quality data from 4 major Chinese manufacturing locations suggests that device production remains above seasonal levels which combined with build forecasts that are above our forecast point to potential for better than expected F3Q guidance,” Morgan Stanley equity analyst Katy Huberty said in a note to clients. —Fitzgerald

The U.S. oil industry reacted to cratering oil prices by cutting production by 900,000 barrels a day in just a month in what appears to be the biggest one-month decline since the financial crisis. U.S. government data shows that U.S. production fell to 12.2 million barrels a day last week. That’s off 100,000 barrels in a week, but down from a record high of 13.1 million barrels a day, just a month ago. Imports of oil into the U.S. fell to 4.9 million barrels from 5.7 million barrels a week earlier, and exports trickled off to 2.9 million barrels a day from 3.4 million. — Patti Domm

Sundial Capital Research’s Jason Goepfert raised concern about the market’s surge since hitting a low on March 23. In a post, he said tech’s continued leadership off the lows “suggests we haven’t really seen the kind of rotation that marks the end of bear markets.” He added: “The kind of sector leadership we’ve seen over the past 20 days is more like ‘false’ bottoms than ‘true’ bottoms.”

Chipotle — Shares of the Mexican restaurant chain rose nearly 10% following its strong quarterly earnings report. Chipotle saw digital sales grow 81% from an increased number of online orders as consumer avoid public spaces.

Snap — The social media stocked soared more than 27% after reporting a 44% jump year-over-year surge in revenue for its first quarter. Snap’s daily active users grew to 229 million, 20% higher than in the same quarter a year earlier.

Biogen — Shares of Biogen plunged 9% after the biotech company said in its first quarter earnings release that it expects to complete the filings for its Alzheimer’s drug during the third quarter, a delay from the previous schedule.

Check out more midday movers here. — Li

Around midday, the major averages were up sharply — recovering some of their steep losses from earlier in the week — as oil prices recovered from a historic two-day drop. The Dow traded more than 400 points higher, or nearly 2%. The S&P 500 climbed 2.1% while the Nasdaq advanced 2.4%. The Dow, S&P 500 and Nasdaq are still down more than 2% for the week despite Wednesday’s gains. —Imbert

L Brands shares fell nearly 6%, and were briefly halted for volatility, after Bloomberg News reported private equity firm Sycamore would terminate a deal to buy Victoria’s Secret. Sycamore and L Brands finalized the deal in late February, before shelter-in-place orders were implemented to curb the coronavirus outbreak. This is the latest deal that could be in jeopardy because of the coronavirus. Last month, Mylan and Pfizer delayed their merger, citing the coronavirus outbreak. —Imbert

The online brokerage dropped more than 7% after disclosing a provisionary loss of about $88 million following oil’s historic plunge into a negative price earlier in the week. Interactive Brokers said several of its clients had long positions on the May contract, which went to a negative price on Monday. That decline led to client losses exceeding their account equity, forcing the company to cover those clients’ margin settlements.—Imbert

• Bank of America downgraded Tesla to underperform from neutral.
• Wells Fargo upgraded Netflix to equal weight from underweight.
• Bank of America upgraded Johnson & Johnson to buy from neutral.
• Guggenheim downgraded Visa to neutral from buy.
• Bank of America downgraded Zynga to underperform from neutral.
• Stifel downgraded Netflix to hold from buy.
• Oppenheimer upgraded Snap to outperform from perform.

CNBC Pro subscribers can read more here. — Bloom

Mortgage volume appears to be settling into a new normal, as refinance demand stays high and purchase demand sits at a five-year low. Total mortgage application volume decreased 0.3% last week from the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index. Volume was 70% higher than a year ago, but that’s all because of refinances. Refinance demand did slip 1% for the week but was a sharp 225% higher than one year ago, when interest rates were over 1 percentage point higher. Refinance demand is also surging because some homeowners want to take cash out of their homes, worried that the economic downturn could worsen. – Diana Olick

Oil’s comeback gained steam in morning trading, with West Texas Intermediate crude soaring 30.7% to trade at $15.25 per barrel. WTI is now on track for its best daily performance ever. But beware, given the steep sell-off this year, a smaller move now accounts for a greater percent jump. So far Wednesday from low to high, WTI has moved nearly 58%. Brent crude traded $2.40, or 12.2%, higher at $21.69 per barrel.— Li, Stevens

The Dow Jones Industrial Average opened Wednesday’s session about 410 points higher, gaining some of the ground lost in the past two days. The S&P 500 climbed 2.0%%, while the Nasdaq Composite jumped 2.1%. Stocks rebounded as oil markets stabilized, with prices bouncing off their multi-year lows. West Texas Intermediate crude last jumped 22% to trade at $14.11 per barrel, on pace for its third best day ever.— Li

Larry Kudlow, President Donald Trump’s chief economic advisor, said Wednesday that the price of oil should recover over the next several months as the economy starts to reopen following strict coronavirus lockdowns. Oil “demand collapsed. The coronavirus worldwide caused the collapse in demand. Through no fault of anybody, this virus has pushed us into a big economic contraction,” Kudlow said on CNBC’s “Squawk Box.” “We’ll come out of this soon, the economy will reopen, the economy will restart,” he added. “It will, I hope, take care of itself. Markets will take care of themselves over time.” — Franck

Oil jumped 12% on Wednesday, reversing steep losses after a volatile overnight trading session. West Texas Intermediate, the U.S. benchmark, rose $1.39, or 12%, to trade at $12.92 per barrel. Earlier in the session WTI traded as low as $10.26. Brent crude traded $1.29, or 6.6%, higher at $20.60 per barrel after previously breaking below $16.— Li, Stevens

Shares of Texas Instruments gained 2.6% in premarket trading after reporting first quarter results that beat Wall Street expectations. The company reported revenue of $3.33 billion, while analysts expected $3.17 billion, according to Refinitiv. The Dallas-based company expanded its guidance range for the second quarter but did not withdraw it, as many other companies have done. — Pound

Bank of America Merrill Lynch upgraded Johnson & Johnson stock to a buy rating on Wednesday thanks to what analyst Bob Hopkins described as “our belief that in the current unprecedented environment the most defensive names will continue to outperform.” Hopkins cited J&J’s history of outperforming the broader stock market during turbulent times while its strong first-quarter results and dividend raise “suggest JNJ should deliver solid results.” JNJ, the analyst said, outperformed by 25% and 28% respectively in 2001 and 2008. The stock rose about 1.5% in premarket trading. — Franck

Shares of Biogen fell 5.8% in premarket trading after the biotech company said in its first-quarter earnings release that it expects to complete filings for its Alzheimer’s drug during the third quarter. Brokerage Cantor Fitzgerald said in a note that the timeline, already delayed, seemed “aggressive.” The company’s revenue and earnings for the first quarter did come in above expectations. — Pound

Data compiled by S3 Partners shows short sellers have made more than $6 billion in profits by betting against energy stocks as companies in the space are ravaged by oil’s historic plunge. Energy Transfer and Enbridge have yielded the most mark-to-market profits for energy ck short sellers at more than $690 million each in 2020. Those betting against energy have also made over $220 million by betting against Kinder Morgan. — Imbert

Bank of America downgraded Tesla on Wednesday after the electric car maker’s recent rally pushed its valuation too high in the firm’s eyes. The bank slashed its rating on Tesla to underperform from neutral, while lowering its 12-month price target to $485 from $500. The new target represents a near 30% decline from Tuesday’s close of $686.72. The bank’s analyst applied average enterprise value to sales and enterprise value to cash flow multiples from “comparable companies” to Tesla and found it was now significantly overvalued. Shares of Tesla have soared 31% this month alone, bringing its 2020 gains to more than 64%. — Li

Chipotle Mexican Grill stock rose more than 6% in premarket trading Wednesday after the company said digital sales more than doubled in March and grew 81% for the quarter. That helped the company report positive same-store sales growth of 3.3% despite widespread coronavirus lockdowns. The burrito chain reported earnings per share of $3.08 versus the $2.90 expected after improvements to its mobile app, partnering with DoorDash and Uber Eats and offering free delivery since March 15. — Franck

The streaming giant surpassed analyst expectations for the first quarter reporting almost 16 million subscribers for the first quarter on Tuesday after the bell. “While the stock has outperformed the rest of our coverage universe this year and throughout the COVID-19 crisis, we believe the outperformance is justified given Netflix’s unique position of being exposed to secular growth that is accelerating as a result of worldwide stay-at-home orders,” Deutsche Bank said.

The feeling was similar at Canaccord. “We are raising our subscriber and revenue estimates again, and while there could be some near-term pull-forward of subscriber additions, we think over time Netflix is well-positioned as the global streaming entertainment leader, continuing to take share from linear TV.”  Shares of the stock are down 1.65% in premarket trading. — Bloom

Shares of Netflix fell 1.4% in premarket trading Wednesday despite a sizable jump in subscribers in the first quarter. Though the streaming giant said it added more than double the number of paid net subscribers expected for the first quarter at 15.8 million, Netflix cautioned that its forecast for the second quarter is a far thinner 7.5 million net adds as governments start to relax stay-at-home orders. “The actual Q2 numbers could end up well below or well above that, depending on many factors including when people can go back to their social lives in various countries and how much people take a break from television after the lockdown,” the company said Tuesday. — Franck

Futures contracts tied to the major U.S. stock indexes pointed to gains at the open of trading on Wednesday as the historic sell-off in oil paused mid-week. Dow futures rose 300 points, or 1.3%. Futures for the S&P 500 and Nasdaq-100 also pointed to strong gains at the open. West Texas Intermediate futures contract for June was down slightly, trading at $11.28 a barrel. Brent futures rose 0.1% to $19.35. — Franck

— CNBC’s Maggie FItzgerald, Pippa Stevens, Michael Bloom and Jesse Pound contributed reporting.

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