Stock market live Tuesday: Stocks close on lows, Nasdaq win streak ends, Fed boosts bond ETFs

Stocks fell as investors tracked the latest coronavirus developments. Stocks poised to benefit from economies reopening — retail and real estate– rolled over and dragged down the major averages. Here’s what happened:

• The Dow fell 457 points, 1.89%, its worst daily performance since May 1
• Dow Impact: Goldman Sachs had the most negative impact on the Dow, accounting for 30 points against the index.
• The S&P 500 fell 60 points, 2.05%, breaking a three-day win streak with its worst daily performance since May 1
• SPY Impact: Microsoft had the most negative impact on the SPY, accounting for 0.07 points against the index.
• The Nasdaq Composite fell 190 points, 2.06%, breaking a six-day win streak with its worst daily performance since May 1
• Nasdaq 100 Impact: Microsoft had the most negative impact on the NDX, accounting for 4.9 points against the index.
• All 11 S&P Sectors were negative in Tuesday’s session, led to the downside by Real Estate, down 4.25%. — Hayes

The market ended the day on a sour note with the Dow Jones Industrial Average dropping about 450 points. The 30-stock benchmark rose as much as 160 points at one point. The S&P 500 closed down 2% at its low of the day, while the Nasdaq Composite also dipped 2%, snapping a six-day winning streak. Stocks extended losses after White House health advisor Dr. Anthony Fauci warned of more “suffering and death” from the coronavirus if states reopen businesses too soon. — Li

The beef and poultry shortage may be an opening for alternative meat company Beyond Meat, according to investment firm Argus. “We expect demand for plant-based alternatives to meat to continue to grow, driven not only by consumer preferences for healthier food, but also by environmental concerns, especially among younger consumers,” the firm said. The company posted better than expected first-quarter earnings last week. “We view Beyond Meat as the leading company in the plant-based protein space, with a widely recognized brand and prospects for continued market share growth.” Shares of the company are up 9% Tuesday. —Bloom

With roughly one hour left in the trading session, the Nasdaq Composite was on pace to snap a six-session winning streak as investors continued to monitor the latest developments around the economic reopening. The tech-heavy average traded 0.3% lower. The Dow slipped 0.6%, or 139 points while the S&P 500 dipped 0.7%. —Imbert

Shares of Chipotle Mexican Grill and MSCI were among six S&P 500 stocks to reach all-time highs Tuesday as the market weighed efforts to reopen the global economy. Below are some other S&P 500 members that also reached record highs:

• Vertex Pharmaceuticals
• Fastenal
• Old Dominion Freight Line
• Nvidia

—Imbert, Hayes

Stocks fell to their lows of the day after Republican Sen. Lindsey Graham and some of his colleagues introduced a bill that would allow for new sanctions on China if it does not respond to a list of demands, including an investigation into the pandemic. The Dow fell more than 150 points before recovering slightly. —Pound

The major indexes fell in afternoon trading as large tech stocks and stocks that would benefit from the reopening gave up earlier gains. Microsoft and Amazon both fell into negative territory after rising earlier in the session. Simon Property Group was trading near the flatline after being up nearly 10% shortly after the market opened. The Dow was down more than 100 points. –Pound

Democrats in the House of Representatives have released another stimulus bill that would total $3 trillion. The plan, which is unlikely to be approved by the Republican-controlled Senate, includes about $1 trillion in support for state and local governments and a second round of stimulus checks to individuals. Republican leaders, including President Donald Trump, have said they do not want to bail out states that had budget issues prior to the pandemic. –Pound

Oil prices rose on Tuesday, one day after Saudi Arabia said it would cut production further in an effort to support global markets. West Texas Intermediate, the U.S. benchmark, gained $1.70, or 7%, to trade at $25.84 per barrel, while international benchmark Brent crude advanced 2% to $30.23 per barrel. Saudi Arabia said that it would exercise even deeper production cuts than those agreed to by OPEC and its oil-producing allies in early April. Beginning in June, the kingdom will reduce output by an additional one million barrels per day. –Stevens

Ritholtz Wealth Management CEO Josh Brown said investors may be too confident in the ability of Big Tech to fully recover from the coronavirus. “I understand that the companies that will have the least trouble with an earnings recovery are the biggest companies in the indices, I get that. I just think we might be overstating the degree to which technology and consumer discretionary stocks are immune,” he told CNBC’s “Halftime Report.” “I do think that things like the ad budgets of Facebook and Google are not as rock solid as maybe we hope. I do think a lot of this front-end loaded shopping for consumer items might lead to a down quarter once we decide all of our homes are fully stocked up on these items.” —Imbert

Around midday, the major averages hovered along the flatline as investors paid close attention to Dr. Anothny Fauci’s testimony before the Senate Health Committee. The Dow was up just 29 points, or 0.1%. The S&P 500 traded just below the flatline while the Nasdaq Composite advanced 0.2%. The Nasdaq’s small advance, however, put the index on track its seventh straight daily gain. —Imbert

Chinese coffee chain Luckin Coffee announced it has terminated Jenny Zhiya Qian and Jian Liu from the positions of Chief Executive Officer and Chief Operating Officer, respectively. The move came after an internal investigation found that its COO fabricated 2019 sales by about 2.2 billion yuan ($310 million). Trading was halted for Luckin shares, which have fallen nearly 90% this year. — Li

Grubhub shares rocketed 23% and were then halted for volatility after a report said ride-hailing company Uber Technologies has approached the company with a takeover bid. The Bloomberg News report of Uber’s bid comes months after other outlets reported that food-delivery service Grubhub had hired advisors to explore strategic options, including a possible sale. — Franck

Wedbush upgraded CarMax to outperform on Tuesday morning and said the used-car retailer is “poised to capture market share” after the coronavirus pandemic. “KMX is very well positioned for this new environment with multiple purchase, delivery and contactless pickup options, whereas online-only competitors such as Carvana cannot address as wide a market,” the firm said. “With a quicker path to recovery, solid omnichannel capabilities, prospects for market share gains and attractive valuation, we recommend purchase of KMX.” Shares of the company are up 5% this month. — Bloom

Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, began testifying before the Senate Health Committee. Fauci’s testimony will be closely watched by Wall Street as investors gauge the potential for the economy to reopen in a timely manner. However, The New York Times had reported earlier that reopening too quickly by states will cause “needless suffering and death.” — Imbert

Prices Americans paid for groceries leaped in April as people stocked up on milk, eggs, meat and cereals amid government lockdowns designed to slow the spread of Covid-19. The government said Tuesday that prices U.S. consumers saw at supermarkets rose 2.6% in April, the largest one-month pop since February 1974. The cost of the meats, fish and eggs category gained 4.3%, fruits and vegetables rose 1.5%, cereals and bakery products climbed 2.9% and dairy goods advanced 1.5%. — Franck

• UBS downgraded Chevron to neutral from buy.
• Bank of America downgraded Stanley Black & Decker to neutral from buy.
• Citi raised its price target on Alphabet to $1,600 from $1,400.
• Stephens named Electronic Arts a best idea.
• JPMorgan named AbbVie a top idea.
• Stephens upgraded PNC to overweight from equal weight.

— Bloom

Simon Property Group, the biggest U.S. mall owner, said it plans to have roughly 50% of its properties reopened within the next week, sending shares of retailers up in morning trading on Tuesday. Gap and Nordstrom both jumped more than 4%, while Macy’s rose 2.4%. Shares of Simon Property popped nearly 6%. The company closed all of its properties temporarily on March 18, and started reopening some of its malls on May 1 as states loosened their shutdown restrictions. CEO David Simon said on the earnings call that the company is “encouraged by the consumer response thus far.” — Li

President Donald Trump commented on the jump in oil prices Tuesday after Saudi Arabia said it would cut production by an additional one million barrels per day beginning in June. “Our great Energy Companies, with millions of JOBS, are starting to look very good again,” Trump said in a tweet. West Texas Intermediate, the U.S. benchmark, gained $1.39 to trade at $25.53 per barrel. “At the same time, gasoline prices at record lows (like a big Tax Cut). The BEST of all Worlds. ‘Transition To Greatness,'” Trump added. According to the latest data from AAA, the national average for a gallon of gas is $1.854, which represents a 35% year-over-year decline. — Stevens

Stocks opened Tuesday’s session on a positive note, with the Dow Jones Industrial Average climbing 100 points. The S&P 500 rose 0.4% at the open, while the Nasdaq Composite traded up 0.5%. Investors continued to monitor actions to ease coronavirus lockdowns, while awaiting Dr. Anthony Fauci’s Senate hearing later this morning where he’s expected to warn against reopening the economy too soon. — Li

The Labor Department reported Tuesday that the prices U.S. consumers pay for everyday goods and services in April posted their largest one-month decline since the last recession. The prices Americans pay for things like haircuts, light bulbs, gasoline and groceries dropped 0.8% last month, the second consecutive month inflation has eased since Covid-19 reached the U.S. and the biggest single monthly decline since 2008. Excluding volatile food and energy components, the so-called core CPI fell 0.4%, the largest monthly drop on record dating back to 1957. — Franck

Shares of mattress-maker Casper Sleep jumped more than 6% during Tuesday’s premarket trading after the company beat revenue estimates for the first quarter, helped by an increase in e-commerce sales as retail locations closed. Earnings came up short, however, and the company lost $1.23 per share, larger than the 84-cent loss analysts had been expecting. The company was once a ‘unicorn’ — valued at more than $1 billion in the private market — but its time as a public company has been far less rosy. Casper went public in February after pricing at the low end of its IPO range and shares have dropped 45% since the stock’s opening trade of $14.50 on Feb. 6. It is now worth about $313 million. — Stevens

Gold has paused its recent rally — the precious metal is coming off its fourth negative session in five — but Citi believes prices will move higher into the end of the year. “We are more confident about a fresh push higher in gold prices by late 2020, on the back of higher crude oil prices and perhaps an even more favorable rates environment,” the firm said in a note to clients Tuesday. Citi said that persistently low interest rates, as well as global currency debasement, are “buttressing investor buying activity.” The firm forecasts a “slow grind higher” for gold, but expects it to hold in the $1,600 to $1,700 per ounce range. “A global growth and EM recovery in 2021 could be what supports the next leg higher towards $2,000/oz,” the firm said. For the second quarter Citi sees gold averaging $1,710/oz. On Tuesday gold gained 0.6% to trade at $1,708/oz. — Stevens

Simon Property Group, the largest U.S. mall owner, said Monday evening that it plans to reopen about half of its properties within the next week. Though it announced that its first-quarter profits fell 20.2%, investors snapped up the stock on hopes that relaxed state-imposed business closures would reinvigorate consumers and restart mall traffic. Shares were last seen up 8.5% in premarket trading at 7:50 a.m. ET. — Franck

Saudi Aramco saw net income drop 25% in the first quarter as low oil prices hit the company’s bottom line. The state-owned oil giant reported income of 62.5 billion riyals ($16.6 billion) for the quarter, which was “primarily reflecting lower crude oil prices, as well as declining refining and chemicals margins and inventory re-measurement losses,” a statement said. The earnings release comes one day after the kingdom said it would cut production by an additional 1 million barrels per day beginning in June in an effort to prop up global oil prices. Aramco went public in December. — Stevens

The Federal Reserve is cranking up its corporate bond buying program, which will include companies whose debt was downgraded to junk primarily because of the coronavirus crisis. As corporate America issues record amounts of debt, the Fed will be scooping up both ETFs and, ultimately, individual bonds of companies that meet certain criteria. Debt issuance was up almost 70% year to date through April and multiple companies have priced significant offerings in the early part of May as well. – Cox

Hyatt Hotels announced late Monday that it would lay off 1,300 workers around the globe starting June 1 as it struggles to cope with the Covid-19 crisis that’s halted travel. Hyatt also said it’s cut pay for senior management, board members and all employees as part of a broader restricting. The company said all employees who are laid off would be eligible for severance pay. “Due to the historic drop in travel demand and the expected slow pace of recovery, Hyatt has made the extremely difficult decision to implement layoffs,” Hyatt said in a statement. — Franck

Boeing Chief Executive Dave Calhoun told NBC he believes one major U.S. airline will file for bankruptcy protection before the end of 2020. “Yes, mostly likely. You know, something will happen when September comes around,” Calhoun said in an interview with NBC’s “Today” scheduled for release Tuesday. Calhoun said he doesn’t expect passenger traffic to reach even 25% of its prior levels by September. — Franck

On Tuesday Dr. Anthony Fauci will testify before the Senate, and he reportedly plans to warn about the dangers of reopening economies too soon, according to The New York Times. “If we skip over the checkpoints in the guidelines to: ‘Open America Again,’ then we risk the danger of multiple outbreaks throughout the country,” Fauci wrote in an email to the Times. “This will not only result in needless suffering and death, but would actually set us back on our quest to return to normal,” he added. The hearing will begin at 10 a.m. ET. — Stevens

Citi raised its price target on Google-parent Alphabet to $1,600 per share from $1,400 per share on Monday evening. This implies a 13% rally in the next 12 months from Alphabet Monday’s closing price of $1,403.59 per share. Citi said it raised its 2021 free cash flow estimate to $64 per share and continues to apply a 25x forward cash flow multiple. “We are updating our model to reflect 1Q20 results and latest post COVID outlook,” Citi anlayst Jason Bazinet said in a note to clients. “We now model 5% year-on-year growth in 2020, with full-year revenue reaching $169.6 billion, and we expect 20% year-on-year rebound in 2021, with full-year revenue reaching $203.4 billion.” Shares of Alphabet were flat in premarket trading on Tuesday. — Fitzgerald

U.S. stock futures traded slightly higher on Tuesday as Wall Street stayed focused on the economy reopening. Dow Jones Industrial Average futures gained 89 points, or 0.4%. S&P 500 and Nasdaq 100 futures were up by 0.3% each. Those gains come after the tech-heavy Nasdaq Composite notched its sixth straight advance on Monday. That’s the average’s longest winning streak since December. The Nasdaq entered Tuesday’s session up more than 2% for 2020. At one point, the index had fallen more than 25% year to date. Investors will turn their eyes to Washington as Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, gets set to discuss the economic reopening, among other issues concerning the coronavirus. — Imbert

–With reporting from CNBC’s Fred Imbert, Yun Li, Michael Bloom, Christopher Hayes and Jeff Cox.

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