Stock market live Wednesday: Stocks roll over, Grantham dumping stocks, big tech stays green

Stocks fluctuated between losses and gains in the volatile session as investors continued to monitor the coronavirus developments and the progress of the economic recovery. The Dow and S&P 500 ended in the red. Big tech stocks provided some support to the broader market, while classic reopening plays such as cruise lines and airlines were lower.

• Declining stocks outpaced advancing stocks 1,979 to 972 on the NYSE
• Declining stocks outpaced advancing stocks 2,073 to 1,268 on the Nasdaq
• Nasdaq closed up 0.15% for its eight positive day in 9
• Nasdaq is up 10.45% this year
• S&P 500 closed down 0.36% for its first negative day in 4
• S&P 500 is down 3.63% this year
• Dow closed down 0.65% for its first negative day in 4
• Dow is down 8.48% this year
• Russell 2,000 small caps closed down 1.77% for their 1^st negative day in 4
• Sectors: 8 out of 11 sectors were negative Wednesday led by Energy down 3.29% — Francolla

Stocks slipped into the close on Wednesday after trading most of the day around the flatline. The Dow Jones Industrial Average fell 170 points, or 0.65%, to end the day, snapping a 3-day winning streak. The S&P 500 fell 0.36%. The technology heavy Nasdaq Composite was the outperformer, ticking up 0.15%. — Fitzgerald

After hovering around the flatline for most of the day, major indexes turned negative in the final hour of trading. The Dow has fallen about 190 points, or 0.7%, and the S&P 500 has lost 0.4%. The Nasdaq, which has been the leader during the session, briefly turned negative but is now holding onto a meager gain of 0.1%. —Pound

Jeremy Grantham, the longtime investor who called the financial crisis, told CNBC’s “Closing Bell” that this U.S. stock market rebound amid the coronavirus may be the fourth major market bubble he’s seen in his lifetime. He advises investors to take their U.S. exposure to zero. “The U.S. is simply now playing with fire. You might make a lot of money in a really short time but recognize we are skating on very thin ice,” said Grantham.

PRO subscribers can read more here. —Melloy, Imbert

Bankrupt rental car company Hertz said in a securities filing Wednesday that it has suspended the planned sale of up to $500 million worth of stock. Securities and Exchange Commission Chair Jay Clayton told CNBC on Wednesday that the agency’s staff had sent comments to the company about the proposed offering. “After discussions with the Staff, sales under the ATM Program were promptly suspended pending further understanding of the nature and timing of the Staff’s review. The Company is not currently offering any shares under the ATM Program,” the filing said. The stock was halted earlier Wednesday at $1.94 per share, down one cent for the session. —Pound

The Nasdaq Composite was headed for its fourth straight day of gains as shares of major tech companies led the way higher. The S&P 500 and Dow, however, alternated between gains and losses and, with less than an hour left, were in jeopardy of snapping their three-day winning streaks. —Imbert

Federal Reserve Chairman Jerome Powell reiterated the central bank’s stance to keep doing what it can to help the recovery, and he urged Congress to do the same. “We’re not thinking about putting down our tools for a long time,” Powell told House members during the second day of his semiannual testimony on Capitol Hill. Over the past three months the Fed has deployed multiple lending and liquidity programs and cut its benchmark rate to near zero. Along with that, Congress passed the CARES Act to aid businesses and displaced workers. “I also think we at the Fed need to keep our foot on the gas until we’re really sure that we’re through this. That’s sort of our intention. I think you may find there’s more for you to do as well.” – Cox

The Fed chair said in his testimony that the circulation of physical coinage slowed to a near halt at some banks as the coronavirus and efforts to contain it kept Americans at home. The topic arose after Rep. John Rose, R-Tenn., said banks in his state reported smaller-than-usual sums of coinage each week and were concerned about their continued ability to dole out physical cash. The spread of Covid-19 led to a rise in contactless payments as more Americans shelter in place and shop online using credit cards.

Powell said the Fed is aware of the shortages and said, “the flow of coins through the economy has … kind of stopped. The places where you’d go to give your coins and get credit … those have not been working. So, a whole system of flow has kind of come to a stop. We’re well aware of this: We’re working with the mint and we’re working with the Reserve banks. And as the economy reopens, we’re seeing coins begin to move around again.” —Franck

Fed Chair Jerome Powell told Congress on Wednesday that “it would be awhile” before the central bank began considering ways to shrink the balance sheet and that the balance sheet’s size, at more than $7 trillion, is not a source of concern. “At current levels, or current planned levels, I think we know now the balance sheet doesn’t present issues in terms of either inflation or financial stability. Those were big concerns as we grew the balance sheet during the last crisis,” Powell said. —Pound

The Federal Reserve will start shifting to direct corporate bond purchases from exchange-traded funds eventually, Chairman Jerome Powell said. “Over time we’ll gradually move away from ETFs and move to buying bonds,” Powell said. “It’s a better tool for supporting liquidity and market functioning.”–Li, Cox

Fed chair Jerome Powell said in his Congressional testimony that the central bank takes issues of diversity and inclusivity seriously. “We are definitely recommitting ourselves to enforcement of fair lending laws. Just as an institution … we try to make it a very high priority of diversity and inclusion, so we want to set an example for that both internally and to some extent, my colleagues and I have spoken publicly on these issues, which is appropriate in these unusual moments,” Powell said. — Li

In his first answer to Chairwoman Maxine Waters, Powell said he’d be concerned to see Congress pull back on its fiscal support for the U.S. economy too soon. Though he declined to offer specific actions to Congress, he did encourage lawmakers to continue to support those who’ve recently lost their job or small businesses.

“I would agree that Congress has already provided significant fiscal support. And that support is now having a positive effect on the economy. We see it in consumer spending, in income data, we see it in payrolls: all of that is helping. I would just note that there are something like 25 million people who are still … who have been dislodged from their job in full or in part due to the pandemic. I would think it would be a concern if Congress were to pull back from the support that it’s providing too quickly. I wouldn’t presume to prescribe exactly what you should or shouldn’t do, but I would say it would be wise to look at ways to continue to support both people who are out of work and also smaller businesses that may not have vast resources,” Powell said. — Franck

Shares of bankrupt rental car company Hertz halted trading around midday Wednesday due to news pending. Earlier, SEC chairman Jay Clayton told CNBC the regulatory agency has issues with Hertz’s plan to sell stock. Clayton said Hertz is aware the SEC has issues, but the regulator has not heard back yet from Hertz. Hertz’s stock initially popped after Clayton’s comment; however, it last traded down 0.5%. – Fitzgerald

Federal Reserve Chairman Jerome Powell continued his two-day Congressional testimony before the House Financial Services Committee. He warned of “significant uncertainty” about the recovery on Tuesday and reiterated the need for lawmakers to continue to support the economy. —Li

Around midday, the Dow and S&P 500 gyrated along the flatline as Wall Street aimed for a four-day winning streak following Tuesday’s sharp gains. The 30-stock Dow was down just 5 points, or less than 0.1%, while the S&P 500 traded 0.1% higher. The Nasdaq Composite outperformed, rising 0.5% as Apple shares hit a record highs. —Imbert

Cowen said on Wednesday that shares of American Airlines are “likely to outperform” as consumers return to the air and it sees the stock as a “contrarian play.” The firm raised its price target to $20 from $15. “However, in the immediate near-term, the negative sentiment seems overstated especially given how demand has picked up in recent months,” analyst Helene Becker said. Shares are up 57% this month. —Bloom

As market indexes hover near the flat line, the number of S&P 500 stocks in negative territory outnumber those with gains so far. There were 273 declining stocks compared with 228 rising ones shortly after 11 a.m., according to FactSet. Energy was the weakest sector in morning trading, while health technology performed the best. —Pound

Energy and financials were among the sectors trading lower on Wednesday, pulling down the broader market. The energy sector was the worst performer after dipping 1.7% on the heels of a decline in oil prices. Chevron and Exxon were each down more than 1%, while Phillips 66, Apache and Valero declined more than 3%. Bank stocks also came under pressure with the financials sector trading about 0.7% lower. Wells Fargo shed more than 2%, while JPMorgan and Bank of America were each down more than 1%. – Stevens

The so-called high beta stocks, which recently broke out amid the market comeback, retreated for the first time in four days on Wednesday. High beta stocks exhibit greater volatility than the broader market, meaning these stocks move up more than the market on a positive day, and vice-versa. Investors were bidding those shares up to seek the maximum way to ride the market rebound. On Wednesday, the Invesco S&P 500 High Beta ETF (SPHB), which tracks the 100 highest beta stocks in the S&P 500, fell nearly 2%, on pace for its first negative day in four. The declines were led by cruise lines and retailers. Norwegian Cruise Line, Carnival and Royal Caribbean all dropped about 8% after Norwegian said it is extending the suspension of trips. Kohl’s is down 5%, while Nordstrom and Gap fell 2.2% and 3.6%. These retail names soared in the previous session on the back of a record rebound in May retail sales.–Li, Francolla

The firm raised its price target on the alternative meat company to $142 from $90 and said Beyond Meat
“may emerge as a net beneficiary of the pandemic in the near-term due to strong demand in retail channel and in the long-term due to rising consumer interest in healthier foods.” The company also debuted a new limited-edition product line called the Cookout Classic at Walmart and Target stores nationwide. Shares are up 8% in early trading. — Bloom

The iShares U.S. Home Construction ETF rose about 1%, on pace for its fourth straight day of gains. The advance was led by a 3.5% jump in Floor & Decor and a 3.1% rise in Lowe’s shares. The industry got a boost after data showed homebuyer mortgage demand spiked to an 11-year high. –Li, Fancolla

• Needham initiated Amazon as buy.
• RBC raised its price target on Apple to $390 from $345.
• Canaccord initiating Stitch Fix as buy.
• Cowen initiated Nikola as outperform.
• Deutsche Bank added a catalyst call buy idea on UPS.
• Guggenheim initiated MSG Entertainment as buy.
• JPMorgan added Constellation Brands to the focus list

Pro Subscribers read more here -Bloom

Some of the biggest technology companies jumped in morning trading Wednesday, supporting the broader market. Amazon and Microsoft gained 1.2% and 1.7%, respectively, while Apple rose 0.5% to a new intraday record high of $355.40. —Li

Shares of Nikola gained more than 2% during early trading on Wednesday after Cowen initiated coverage on the stock with an outperform rating. The call is the first from a Wall Street firm for the company, which has seen shares more than double since it went public through a reverse merger on June 4. The company, which makes battery-electric and hydrogen-powered trucks, does not expect to generate revenue until 2015.
CNBC Pro subscribers can read more about Cowen’s bull case here. – Stevens

The market opened Wednesday’s session in the green, eyeing a fourth straight day of gains. The Dow Jones Industrial Average rose 50 points, while the S&P 500 gained 0.3%. The Nasdaq Composite climbed 0.5%, lifted by shares of big tech including Amazon, Apple and Netflix. — Li

Shares of Oracle fell 3.1% in premarket trading on Wednesday after the software company reported disappointing revenue in its fiscal fourth-quarter results. Oracle’s revenue declined 6% to $10.44 billion, missing analysts’ estimates of $10.65 billion, according to Refinitiv. The company had said in March that it was expecting roughly flat revenue in the quarter. Earnings came in at $1.20 a share, compared with analysts’ average estimate of $1.15.--Li

On Friday, which is Juneteenth, General Motors will hold moments of silence at its plants in a sign of solidarity and support for the Black community, according to an internal memo. The silence will last for eight minutes and 46 seconds, which is how long a Minneapolis police officer knelt on the neck of George Floyd before his death in police custody. “I really believe eight-plus minutes of solid reflection will benefit everyone,” GM President Mark Reuss wrote. “I’m sure many of you have felt the same glut of emotions I have while watching recent events unfold … disbelief, anger, shame, grief, and ultimately heartbreak. This is not who we are as humankind, nor as a country. We can and must be better than this.” His comments follow those of GM CEO Mary Barra, who two weeks ago wrote to employees that she was “impatient and disgusted” following the unjust deaths of Floyd and other Black Americans. She announced the company would form an “Inclusion Advisory Board,” which she will chair. – Wayland, Stevens

China has ramped up measures to curb the latest spike of coronavirus cases in Beijing by canceling several domestic flights. China’s capital city had gone more than 50 days without domestically transmitted coronavirus cases. On Tuesday, however, 31 cases of local transmission were confirmed. —Imbert

Federal Reserve Chairman Jerome Powell will trek back to Capitol Hill on Wednesday to address the House Financial Services Committee starting at noon. Powell, who testified to the Senate on Tuesday as part of his semiannual report to Congress, will likely field more questions from the Democrat-controlled chamber about how lawmakers should craft future fiscal stimulus packages amid the coronavirus outbreak. Though the Fed chief steered clear of explicitly recommending specific policy actions to the Senate Banking Committee on Tuesday, he did warn of “significant uncertainty” about the recovery and the need for lawmakers to continue to support workers. — Franck

Cruise stocks fell in premarket trading after Norwegian Cruise Line Holdings announced that it was suspending almost all voyages through the end of September, extending its cancellations by two months. Shares of Norwegian dropped more than 8%, while Carnival and Royal Caribbean both slipped about 4%. —Pound

Mortgage applications to purchase a home jumped 4% last week, marking the ninth consecutive week of gains and the highest volume in more than 11 years, according to the Mortgage Bankers Association’s seasonally adjusted index. The demand was also 21% higher than one year ago. Buyers are rushing back into the housing market as mortgage rates hit another record low. –Li, Olick

Stock futures pointed to a higher open on Wednesday as Wall Street tried to extend the recent rally. Futures on the Dow Jones Industrial Average gained about 160 points, while the S&P 500 and Nasdaq 100 futures both rose about 0.5%. Stocks were coming off three straight days of gains after last week’s sharp pullback. A record rebound in U.S. retail sales helped boost risk sentiment on Tuesday. Investors will monitor Federal Reserve Chairman Jerome Powell’s Congressional testimony on Wednesday, which continues at 12 p.m. ET before the House Financial Services Committee. —Li

— CNBC’s Maggie Fitzgerald, Michael Bloom, Gina Francolla, Thomas Franck, Michael Wayland, Fred Imbert and Diana Olick contributed reporting.

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