Stock market live updates: Dow up 250, stay-at-home stocks sink, banks and retail rally

Stocks moved between gains and losses on Wednesday during a volatile trading session. The reopening trade had another strong start, led by travel stocks such as airlines. All three large cap indexes and the Russell 2000 were looking to extend gains from Tuesday. Here’s what’s happening.

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Shares of Twitter dropped more than 4% at the low on Wednesday after President Donald Trump threatened legal action against the social media platform, which slapped warning labels on two of Trump’s tweets about mail-in ballots. But Cowen said that the company will most probably be fine. “Importantly, only Congress — not the Administration — can change Section 230. And we see very little chance Congress will do that anytime soon,” the firm said. Section 230 of the 1996 Communications Act protects social media platform’s editorial decisions. For Facebook, however, there could be issues, the firm said. “Trump’s broader attack on social media today could potentially rebuild Republican support for a Facebook antitrust lawsuit,” Cowen’s Paul Gallant said. “Antitrust has nothing to do with platforms’ content decisions, but if the FTC commissioners are considering a lawsuit against a major company like Facebook, they might feel more comfortable pulling the trigger if they felt they had political/public support.” – Stevens

The Dow traded more than 300 points higher, or 1.3%, as it tried for a second time to close above 25,000. The 30-stock Dow hasn’t achieved this milestone since March. The S&P 500 also gained 0.9% and was on pace to close above 3,000. That would also be the S&P 500’s best close since March. —Imbert

The S&P 500 swung and missed Tuesday when it rose above its 200-day moving average but closed below it. The S&P was again above the 200-day, and in a late burst looked set to close above it Wednesday. The 200-day is a momentum indicator and is at 3,000. 49. — Domm

Government oil and gasoline supply data is expected Thursday morning, and it should show whether Americans fueled up ahead of the Memorial Day weekend, the official start of summer driving season. Tom Kloza of OPIS said his survey of 15,000 gasoline stations shows gasoline demand was up a modest 5.6% Friday through Monday, compared to the prior weekend, but down 28.9% from the year earlier holiday weekend. Gasoline purchases have shown a steady increase, and demand is important since in normal times, the U.S. driver makes up 10% of global oil demand.

Michael Tran, global energy strategist at RBC, monitors traffic congestion data and said there were signs that Memorial Day was not particularly strong for the gasoline market.  “Following several weeks of slow and steady improvement, our real-time GPS data suggests that many major US cities saw traffic regress even compared to activity seen over recent weekends,” he wrote, noting Los Angeles traffic was down 9% from the week earlier.
Analysts expect a recovery in gasoline demand this year to about 85% of normal levels, since so many jobs have been lost and many people should continue to work at home. — Domm

Casino company MGM Resorts International said Wednesday it would reopen a handful of its Las Vegas casino locations on June 4. Following the closures of all its U.S. properties amid the coronavirus pandemic, MGM will be reopening the Bellagio, the New York- New York, the MGM Grand and The Signature next Thursday. “At opening, amenities at all properties will be limited. As demand for the destination builds, additional venues within these resorts will open and other MGM Resorts properties on The Strip will reopen,” the company said in a release. Shares of MGM Resorts rose 0.5% on Wednesday. — Fitzgerald 

The iShares China Large Cap ETF XFI  hit its low of the day after Secretary of State Mike Pompeo said the U.S. no longer recognizes Hong Kong’s autonomy. The move was not unexpected after Beijing said it was imposing more security measures on Hong Kong. U.S. stocks that were sensitive to the trade war concerns are not reacting. The State Department was required to issue a determination on Hong Kong’s autonomy under pro-democracy legislation passed by Congress late last year. The U.S. recently expanded its crackdown of Huawei, and the relationship with Beijing has become increasingly strained.

The Chinese yuan has been most sensitive to the deterioration in China-U.S. relationship. It continues to hit lows. “Our view is this is a significant development and it’s serious, but it’s more evolutionary than revolutionary. There are still very strong commercial ties between the US and China, and some of the things China is doing reflect their own weakness at home rather than the US,” said Paul Christopher, head of global market strategy at Wells Fargo. “Voters, whether Republican or Democrat now have a net negative opinion of China. We’re going to see more rhetoric about this,” he said. “It could end up being a headwind once the market finishes pricing in all of this hopium,” Christopher said. —Domm

Cowen CEO Jeffrey Solomon said that optimism about a quick recovery from the economic recession and the potential for fewer than expected people and businesses defaulting on loans is driving bank stocks higher. “The rally in financials has been a function of the fact that people are expecting that we won’t have as deep a recession maybe as we previously heard. And the loan loss reserves for banks won’t be as bad as they were the last time we had a recession,” Solomon said on “Power Lunch.” “So I just think people are saying these are trading are discounts to book value, and if you have any soft of sanguine view over the next five years, this is going to be a really great entry point for people in financials.” Bank stocks have been some of the strongest performers in recent sessions. The KBW Bank Index has risen more than 5% on Wednesday and is more than 20% above where it closed on May 13. —Pound

About three stocks advanced for every decliner at the New York Stock Exchange as investors increased bets on the economy reopening. Overall, about 2,000 NYSE-listed stocks were up while 865 declined, according to FactSet. —Imbert 

Softbank is considering cutting as much as 10% from the staff of its Vision Fund investment arm, according to a Bloomberg News report. Based in London and  with offices in San Francisco and Tokyo, the fund employs about 500 people.  The $100 billion Vision Fund is known for providing seed capital for often-unknown startups. CNBC has reached out to Softbank for comment. – Cox

Around midday, the S&P 500 traded back above the key 3,000 mark as it tries to close above that level for the first time since March. The Dow was up more than 200 points, or about 1%, while the Nasdaq Composite struggled with a 0.5% decline. The bifurcated market action comes as investors seemingly sold stocks that benefited from stay-at-home orders and added to positions in companies that benefit from the economy reopening. — Imbert

The U.S. unemployment rate likely will remain well above that of other nations because of the way it has handled the job crisis associated with the coronavirus pandemic, according to Goldman Sachs. In the near term, Goldman sees the jobless level peaking at 25% then falling to 12% by the end of the year but still staying around 8% as 2021 closes. That’s because while other countries subsidize employers to continue paying workers, the U.S. – and Canada – have focused more on providing payment to displaced workers, in many cases above what they were making. While the firm expects the situation to weigh on the recovery, it also said the payments will continue to provide households with disposal income that will help boost growth. – Cox

S&P Global said the number of potential debt downgrades is at an all-time high. The firm said there are now 1,287 issuers, rated AAA to B-, on the potential downgrade list. They either have negative outlooks or ratings on CreditWatch with negative implications. The number surpassed the previous record of 1,028 from April, 2009.

The ratings agency said it added 550 issuers since March, including 490 facing direct economic impact from the pandemic, mostly from financial institutions, consumer products and utilities. It also removed 123 issuers from its list, with 110 of those downgraded.

In the last month, the ratings of 247 issues from the list were lowered and 134 of those remain on the list for potential downgrade. About 64% of those on the list have risk from the impact of coronavirus-related containment measures to their operations.

“Generally, we expect heavy credit erosion in coming months as issuers, especially those in the lower-rated spectrum come under heavy fire from poor earnings, continued difficulties in managing cost structures, and market volatility creating limited funding opportunities,” said Sudeep Kesh, head of S&P Global Credit Markets Research. – Domm

Shares of Tractor Supply have gained more than 45% since March 16, making it the top-performing retailer since lockdown measures went into effect. The farming supply retailer has seen its sales surge. On Tuesday in an earnings preannouncement, the company said it expected record-breaking sales and earnings in the current quarter, and that comparable store sales would grow by 20% to 25%. The company is set to report second quarter earnings on July 23. Shares traded more than 4% higher on Wednesday. – Stevens, Hum

The S&P 500 joined the Nasdaq in negative territory, falling 0.4% below where it closed on Tuesday, as tech stocks lost ground. The Dow has also retreated from earlier gains but it still up more than 80 points for the session. —Pound

• Jefferies initiated Freshpet as buy.
• Argus downgraded Pinterest to hold from buy.
• UBS downgraded Brown-Forman to sell from neutral.
• Citi raised its price target on Facebook to $275 from $245.
• Baird downgraded Hyatt to neutral from outperform.
• Evercore ISI upgraded Dentsply Sirona to overweight from in line.
• Susquehanna upgraded Hibbett Sports to positive from neutral.
• Jefferies raised its price target on Apple to $370 from $350.
• Wedbush raised its price target on Tesla to $800 from $600.

Pro Subscribers can read more here. —Bloom

Twitter shares hit their session lows in midmorning trading, falling about 4%, after President Donald Trump threatened to take action against the social media platform. On Tuesday, Twitter slapped Trump’s tweets about mail-in ballots with a warning label. “Get the facts about mail-in ballots,” said Twitter’s warning labels below two of Trump’s tweets. “Twitter has now shown that everything we have been saying about them (and their other compatriots) is correct. Big action to follow!,” Trump said in a tweet. —Imbert

Stocks that benefited from people staying at home amid the coronavirus pandemic fell broadly as investors grew more optimistic about the economy reopening. Zoom Video and Shopify both dropped more than 5%. Amazon and Netflix slid 1.9% and 2.3%, respectively. Teladoc Health traded 7.8% lower. These stocks are still up at least 25.1% for the year, however. —Imbert

The SPDR S&P Bank ETF (KBE) and the Regional Banking ETF (KRE) are both up about 5% as bank shares rallied on hope of the economy reopening. Those gains put both ETFs up more than 13% for the week and on pace for their biggest weekly gains since April. Citizens Financial, Regions, Truist, Citigroup and Wells Fargo drove those gains, jumping at least 14% this week. —Imbert, Francolla

Major U.S. stock indexes opened sharply higher Wednesday morning as investors continued to cheer efforts across the United States to reopen portions of the economy. The Dow gained 350 points, or 1.4%, at the opening bell while the S&P 500 gained 0.9%. Gains were led by the equities of companies that would benefit most under a full reopening, including airlines, retailers and cruise line operators. Goldman Sachs and JPMorgan Chase led the Dow higher while Alaska Air, American Airlines, United Airlines, Carnival and Nordstrom carried the S&P 500 back above 3,000. — Franck

Data released by Bank of America showed the bank’s clients were net buyers of U.S. stocks last week as hope around the economy reopening grew. Institutional investors drove the biggest inflows into U.S. stocks, adding $1.97 billion to their stock positions. Corporations increased their equity exposure by $277 million. However, those inflows were offset by hedge funds pulling $920 million out of stocks while retail clients took $570 million from the equity market. —Imbert, Bloom

As states reopen their economies, Barclays combed through different data sets in order to assess how quickly life is getting back to normal. The firm found some encouraging signs, but noted that there’s still a far way to go. For instance, Barclays found that S&P 500 company employees are gradually beginning to return to work. The median staffing pare back for companies within the benchmark index now stands at almost 90%, compared with a 95% reduction in mid-April. The firm also highlighted findings from its so-called “National Activity Index,” which measures foot traffic in areas like hospitality and leisure, health care, retail, manufacturing and professional services. Barclays found that the index “remains significantly depressed from its February 2020” reading, but noted that it has rise from -52% to -48% since the end of April. –Stevens

Several Wall Street analysts raised their price targets for Apple on Tuesday, led by Jefferies raising its target to $370 per share form $350, tying a Street-high. Jefferies analysts said in a note that web traffic data showed strong demand for the iPhone SE, suggesting that conensus estimates for iPhone sales is too low. Bank of America said in a note that it was bullish on Apple’s services growth and raised its target to $340 from $320, wile Deutsche Bank pushed its mark to $320 from $305, citing CNBC’s report that Apple is reopening roughly 100 physical retail stores this week. The stock, which closed at $316.73 per share on Tuesday, has gained 0.5% in premarket trading. —Pound

Wedbush analyst Dan Ives hiked his price target on electric car  maker Tesla to $800 per share from $600 per share, noting “storm clouds [are] starting to clear” for the company. “The company took a major step forward around fulfilling demand and production concerns with the Fremont artery now up and running after the Musk vs. Alameda County stand-off got resolved,” Ives said, adding that underlying demand for Tesla’s Model 3 in China is still strong. Ives’ new price target is below Tesla’s previous closing price of $818.87. —Imbert

The European Commission announced Wednesday plans for a 750 billion euro ($826.5 billion) recovery fund as Covid-19 continues to hit worldwide economies. The details of the fund have not been decided, with France and Germany in favor of issuing mutual EU debt, while nations including Austria and Sweden are in favor of issuing loans instead. On June 18 leaders from the 27 EU member states will meet to finalize the details of the fund. —Amaro, Stevens

People filing applications for mortgages to buy a home jumped 9% last week compared with the prior week, according to data from the Mortgage Bankers Association, in the sixth straight week of gains. Applications are now up 54% since early April, in yet another sign that the economy is recovering. On Tuesday data showed that new home sales rose slightly in April, after analysts had been expecting a 22% drop. —Stevens

Shares of major retailers, airlines and cruise line operators rose in premarket trading Wednesday as Wall Street continued to cheer U.S. efforts to reopen portions of its economy. Retailers Gap and Kohl’s rose 5.8% each before the opening bell; Carnival and Norwegian Cruise Line rose 15.9% and 13.9%, respectively; while Delta, United and American rose 7.2%, 9.5% and 9.9%. The Dow and S&P 500 have climbed back to near key market levels this week on trader hopes that consumer habits, derailed in March and April thanks to Covid-19, may soon be back to normal. —Franck

Industrials giant Boeing is preparing to announce 2,500 voluntary layoffs later this week, according to a report from The Wall Street Journal citing union officials. The cuts, which will center around the company’s Seattle-area factory, could be announced as early as Friday, the WSJ said, and will be the first phase of broader cuts. The coming announcement follows commentary from the company in April, during which the embattled airplane manufacturer said it was considering a number of options, including reducing its 160,000-strong payroll by around 10%. At the time, the company had not yet reached a final decision. The stock was about 3% higher in premarket trading. —Stevens

U.S. stocks were headed for sharp gains at Wednesday’s open as traders grew more hopeful about the economy reopening. Dow Jones Industrial Average futures rallied 354 points, or 1.4%. S&P 500 futures gained 1.1% while Nasdaq 100 futures traded 0.5% higher. Stocks that would benefit from the economy reopening — such as Carnival, Disney and JPMorgan Chase — were all higher in the premarket. Wednesday’s gains came after stocks surged in the previous session. —Imbert

—With reporting from Silvia Amaro, Jesse Pound, Patti Domm, Jeff Cox, Maggie Fitzgerald and Michael Bloom. 

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