Stock market live Wednesday: Dow down 400, shocking economic data, bank earnings plunge

Stocks dropped on Wednesday as weak economic data and disappointing bank earnings dragged the major averages lower. Retail sales in March fell 8.7% — the most on record — while the latest reading from the Empire State Index showed that manufacturing in the New York area hit a record low reading of -78.2. Meanwhile, as earnings season gets underway investors are getting their first glimpse of the coronavirus’ economic toll. Here’s what happened:

• S&P 500 closed down 2.2% for its worst day since April 1 when the S&P 500 lost 4.41% and its second negative day in three
• S&P 500 is down 13.85% this year, on pace for its worst year since 2008 when the S&P 500 lost 38.49%
• From record: S&P is 17.98% below its intraday all-time high of 3,393.52 from Feb. 19
• From 52-week low on March 23: S&P 500 is 26.99% off its 52-week low of 2,191.86
• Dow closed down 1.86% for its worst day since April 1, when the Dow lost 4.44%
• Dow is down 17.64% this year, on pace for its worst year since 2008 when the Dow lost 33.64%
• From record: Dow is 20.51% below its intraday all-time high of 29,568.57 from Feb. 12
• From 52-week low on March 23: Dow is 29.05% off its 52-week low of 18,213.65
• Sectors: 11 out of 11 sectors were negative Wednesday led by Energy down 4.67% — Francolla

Stocks slid on Wednesday as a duo of somber economic gauges fueled concerns about an economic fallout caused by the coronavirus pandemic. The Dow finished the session down about 440 points, while the S&P 500 fell 2.2%. The tech-heavy Nasdaq outperformed, dipping only 1.4% as a 3.2% jump in Netflix shares capped the decline.— Li

Barclays analyst Brandon Oglenski said on “Closing Bell” that the details of the deal between airlines and the Treasury Department mean that it was a smart deal for the companies and their shareholders. “If you look at the terms of it, only 30% needs to be repaid, and it’s a low-cost loan. And the warrants that are being issued here, which is roughly 3% of the entire value of the program, really only become dilutive if you assume that share prices double or triple from here. I don’t think shareholders are going to be very upset about that,” Olgenski said. He estimated that Delta, American and United are burning through $50 million to $60 million per day. — Pound

With roughly one hour left in the trading session, the major averages were down sharply as the latest batch of economic data and corporate earnings raised concern over the coronavirus and its impact on the economy. The Dow was down more than 300 points, or 1.4%, while the S&P 500 slid 1.7%. The Nasdaq was down 0.9%. To be sure, the major averages were well off their session lows. The Dow was briefly down more than 700 points earlier in the day. — Imbert

U.S. oil fell to its lowest level in more than 18 years on Wednesday following the largest inventory build on record as well as a bearish report from the International Energy Agency. West Texas Intermediate, the U.S. benchmark, slipped 1.19% to settle at $19.87, a price not seen since Feb. 7, 2002. The U.S. Energy Information Administration reported on Wednesday that crude stocks surged by a record 19.2 million barrels for the week ending April 10 as the coronavirus pandemic continues to sap demand. Additionally, the IEA said in its report that oil demand could fall by 29 million barrels per day in April, driving demand to its lowest level in 25 years. Brent crude, the international benchmark, tumbled 6.45% to settle at $27.69. — Stevens

More than five stocks traded lower for every advancer at the New York Stock Exchange. Overall, more than 2,400 NYSE-listed stocks were lower while 447 rose as dismal economic data and weak earnings dented market sentiment. — Imbert

Nearly $300 billion of loans have been approved through the Payroll Protection Program, which could hit its $349 billion limit on Wednesday, a source familiar told CNBC. The Small Business Administration and the Treasury Department have not released information on how many of the loans have been disbursed. The program was set up on a first-come, first-serve basis, raising concern that the money would run out before companies that need the help could gain access. Treasury Secretary Steve Mnuchin has said he will request to add another $250 billion to the program, but Senate Democrats blocked an effort to pass the additional funding last week. — Rogers, Spring

New York Gov. Andrew Cuomo said Wednesday in a daily press conference that total coronavirus hospitalizations in the state are down, adding there is a flattening of the curve. Cuomo said it’s good news that intensive care unit admissions and intubations also slowed in New York. Still, the governor acknowledged the pandemic will only be contained when there’s a vaccine, which should be expected in 12 to 18 months. —Li

Princeton economist Burton Malkiel told Barron’s in an interview that he believes stocks are poised to go up. Malkiel said that he had a large cash position before the market sell-off and has since been buying ETFs and stocks with high dividend yields, though he is now sitting back after the market has rallied in recent weeks. Malkiel, author of “A Random Walk Down Wall Street,” said that stock valuations are now “completely in the reasonable range” and that low interest rates and massive fiscal stimulus should provide a boost to equities. The economist also said that he is worried about inflation long-term, telling Barron’s “one thing we do know is when there’s too much money around, even when production is going well, there’s always a chance of inflation.” — Pound

The global economic downturn has been so severe that already half of the world has asked the International Monetary Fund for a bailout, the organization’s chief said Wednesday. “This is an emergency like no other. It is not because of bad governors or mistakes,” Kristalina Georgieva told CNBC’s Sara Eisen on CNBC’s “Squawk Alley.” “For that reason, we are providing funding very quickly.” “We are asking for one thing only: Please pay your doctors and nurses, make sure that your health [care] systems are functioning, and that vulnerable people and first responders are protected,” Georgieva said.

Georgieva noted the global economy could expand by 5.8% in 2021 if the virus is contained and new cases start to recede. However, she added the total global economic output would be less than in 2019 even with such a jump. Economic output could also be worse if the virus takes a “double trip” around the world. —Imbert

J.C. Penney — Shares of J.C. Penney tanked more than 28% after Reuters reported the retailer is exploring a bankruptcy filing. The coronavirus pandemic forced J.C. Penny to close stores and it disrupted its turnaround plans.

Bank of America — The bank’s stock tumbled more than 6% Wednesday after reporting that profits dropped 45% in the first quarter and said loan losses and lower interest rates would hurt the bank throughout the coronavirus crisis.

Occidental Petroleum — Occidental equity slid 12% in midday trading after the company said it will pay its quarterly dividend to Berkshire Hathaway in stock.

Tesla — Shares of the electric car maker rose more than 4% after Goldman Sachs initiated coverage of the stock with a buy rating.

Click here to read about more companies making headlines in midday trading. – Li

Around midday, the major averages were down sharply as the most recent economic data and latest bank earnings reflected the damage being done by the coronavirus. The Dow was down more than 600 points, or 2.7%. The S&P 500 slid 2.8% while the Nasdaq Composite dropped 2%. Retail sales had their biggest drop on record in March. Bank of America and Citigroup slid on their earnings results. —Imbert

The coronavirus pandemic may set back economic growth efforts in developing nations, World Bank President David Malpass told CNBC on Wednesday. Further progress can be made on access to electricity, clean water and sanitation, Malpass said on “Squawk on the Street,” “but the big worry is that we’re moving backward because of the global recession.” As a result of the pandemic, the world will likely experience its worst recession since the Great Depression, the International Monetary Fund said Tuesday. “This is a huge problem. The world recession will be deep and that especially impacts poorer countries,” Malpass said. – Stankiewincz

Amazon and Netflix bucked the broader market’s massive rout, with both stocks in the green on Wednesday. Amazon, which is up about 0.4%, hit an all-time record high for the second day in a row. Amazon is benefiting from the many Americans using online orders for household items and groceries during the quarantine. Streaming giant Netflix jumped more than 3%, helped by a price target hike to $490 per share from $425 per share from Pivotal. Netflix is trading at all-time high levels back to its IPO in May of 2002. Netflix is getting a boost from the stay-at-home trend. – Fitzgerald

Apple announced a new, cheaper iPhone model on Wednesday, marking the first time it has launched a new phone without one of its glitzy in-person events as most of the country remains under shelter in place orders due to the coronavirus pandemic.

The new, second-generation iPhone SE carries the same name as the original iPhone SE that launched in 2016. It costs $399, and pre-orders begin on Friday, April 17. It arrives by April 24.

The phone is launching at a difficult time for Apple as it faces an environment where millions have lost their jobs due to the current health crisis and production delays have hit its manufacturing facilities in China. In February, Apple warned on revenue guidance for its second quarter, citing weak demand in China due to the spread of coronavirus and lower iPhone supplies. But Apple seems confident it will be able to meet demand for its new iPhone SE. Shares of Apple fell 1% on Wednesday. — Haselton, Stevens

Economists could reduce already negative forecasts for first-quarter GDP after March retail sales fell by 8.7% in the worst drop on record and New York manufacturing activity plunged the most ever. The retail sales number was even more dire than the 8% expected, after a revised 0.4% decline in February. Food and beverage stores showed gains of more than 25%, but most categories showed steep declines. Empire state manufacturing was a shocking negative 78.2, double the anticipated decline. MUFG Union Bank chief financial economist Chris Rupkey said it shows “the economy is clearly in ruins here” and April will be worse. Economists expect the economic decline to trough in the second quarter, as the economic shutdown did not really start until the final weeks of the first quarter, in the second half of March. — Domm

The stock price of international oil and gas company Occidental Petroleum fell more than 11% in early trading on Wednesday after the company said it will pay its quarterly dividend to Berkshire Hathaway in equity. Occidental said in a filing that it will sell 17.3 million OXY shares to Berkshire Hathaway worth $200 million as part of dividends owed to Warren Buffett’s conglomerate. Berkshire in 2019 agreed to a $10 billion preferred stock investment in Occidental as part of its takeover of Anadarko Petroleum, an offer that sweetened the bid at the time. The funding came at a steep price, however, with the preferred stock accruing dividends to Berkshire at 8% annually. — Franck

• Goldman Sachs initiated Tesla as buy.
• BMO upgraded Target to outperform from market perform.
• Pivotal raised its price target on Netflix to $490 from $425.
• Morgan Stanley upgraded JD.com to overweight from equal weight.
• Piper Sandler upgraded Campbell Soup to overweight from neutral.
• Piper Sandler upgraded General Mills to overweight from neutral.
• Baird raised its target price on Amazon to $2,550 from $2,275.
• Jefferies downgraded Visa and Mastercard to hold from buy.
• DA Davidson upgraded Canada Goose to buy from neutral.
• Loop downgraded American Eagle to sell from hold.
• Citi initiated Lennar, D.R. Horton and PulteGroup as buy.

CNBC PRO subscribers can read more here. — Bloom

Stocks accelerated their losses in early trading, with the Dow Jones Industrial Average dropping more than 650 points. The S&P 500 slid 2.9% while the Nasdaq Composite traded 2.2% lower. — Fitzgerald

The coronavirus fallout continued after retail sales plunged on Wednesday. “Today’s number is one of the first ‘hard data’ reports on aggregate demand in March and reveals the scale of the economic damage wrought by the pandemic last month,” the firm added after retail sales dropped a record 8.7%. — Bloom

A group of financial firms including Morgan Stanley and BlackRock are in the middle of brainstorming potential changes to the stock market’s so-called “circuit breakers” after being repeatedly triggered during the monster coronavirus sell-off last month, the Wall Street Journal reported. A marketwide trading halt occurs at three thresholds on the S&P 500 to prevent stocks from falling through the floor. These Wall Street firms are aiming to find a solution to make the halts less likely to occur right after the opening bell, which happened in March, the Journal said. One suggestion calls for relaxing the circuit-breaker rule between 9:30 a.m. and 9:45 a.m ET. The discussion came after complaints about the effectiveness of the mandate and its potential to trigger more panic selling. — Li

Homebuilder sentiment suffered its biggest monthly drop in the index’s 35-year history this month, as the coronavirus pandemic hammered the American economy. Builder confidence in the market for single-family homes plunged 42 points to a reading of 30 in April, the lowest point since June 2012, according to the latest National Association of Homebuilders/Wells Fargo Housing Market Index, or HMI. The survey dates back to January 1985. The reading was expected to drop to 55. Anything above 50 is considered positive. The last negative reading was in June 2014. — Olick

New data shows the government’s coronavirus stimulus checks are providing much-needed relief to Americans struggling with day-to-day living costs.

Data compiled by digital bank Current found members who received stimulus payments over the past five days spent 16% of the money on food, including takeout and delivery. An additional 9% of spending was on groceries and 10% went toward gas. “Clearly food is an issue, people are struggling,” Current CEO Stuart Sopp told CNBC. “They’re just trying to survive, and I think that’s what the stimulus was all about.” — Schulze

Stocks moved lower at open on Wednesday as weak economic data and bank earnings that missed Street estimates dragged the major averages lower. The Dow dropped 532 points, for a loss of 2.2%. The S&P 500 was down 2.3%, while the Nasdaq Composite shed 1.9%. The drop all but erases Tuesday’s surge. — Stevens

Treasury yields plunged on Wednesday as the latest economic data underscored the coronavirus’ devastating blow to the U.S. economy. The two-year yield hit a low of 0.199%, its lowest level since July 2012. U.S. retail sales for March dropped the most since the government started tracking the series, while manufacturing in the New York area fell by its biggest margin ever to a historic low. The yield on the benchmark 10-year Treasury note dropped 6 basis points to 0.67%, after the rate hit an all-time low of 0.318% in early March amid a historic flight to bonds. — Li

Best Buy will furlough about 51,000 employees later this week, the company said in a news release. The retailer’s stores have been closed across the country since March 22, but it has continued to offer curbside pickup. The company said its online sales in the U.S. are up more than 250%, and about half of those sales are picked up at its stores. Shares of Best Buy slid more than 4% during Wednesday’s premarket. — Repko, Stevens

U.S. retail sales for the month of March fell 8.7%, the largest drop on record going back to 1967. Economists had been expecting a drop of 8%. To put the number in context, the second-worst reading in history was a 6.46% drop in Jan. 1987. With the majority of Americans staying home in an effort to slow the spread of the coronavirus, clothing and accessories sales fell 50.5% month-over-month, while furniture and home furnishing sales dropped 26.8%. Unsurprisingly, one bright spot was food and beverage sales, which rose 25.6%. — Stevens, Rattner

Goldman Sachs on Wednesday said first-quarter profit dropped 46% as the coronavirus pandemic wiped out results in its asset management division. The bank said it earned $1.21 billion in the quarter, or $3.11 a share, missing the $3.35 estimate of analysts surveyed by Refinitiv. While results were dragged down by losses in debt and equity holdings housed in the asset management business, the firm’s trading division exceeded expectations, helping company-wide revenue of $8.74 billion top the $7.92 billion estimate. Goldman shares slipped 3.3% in premarket trading. — Son

Manufacturing in the New York area has fallen far more than it did during the depths of the Great Recession, with the Empire State Index for April coming in at -78.2. Economists surveyed by Dow Jones had been expecting -32.5. The survey was conducted between April 2 and April 10. — Pound

U.S. retail sales for the month of March fell 8.7%, the largest drop on record going back to 1967. Economists had been expecting a drop of 8%. The Dow is now set to open 475 points lower. — Stevens

Global cases of the coronavirus have reached nearly two million with 1,996,681 infections, according to Johns Hopkins University. About 127,590 people have died from COVID-19 around the world. In the U.S., 609,685 people have contracted the fast-spreading virus and more than 26,000 Americans have died.

On Tuesday, President Donald Trump announced that he is going to withdraw U.S. funding for the World Health Organization. He has accused the organization of making mistakes in its approach to the virus. However, some have criticized the White House for what they see as an inadequate response to the crisis. — Fitzgerald

Citigroup reported Wednesday a sharp drop in its first-quarter profit as the bank built its loan-loss reserves to cushion the blow from the coronavirus outbreak on its business. The bank earned $1.05 per share, down from the $1.87 earned in the same quarter a year earlier. Revenue rose 12% year-over-year to $20.7 billion, due to higher fixed income and equity markets trading revenue.

Wall Street had anticipated earnings per share of $1.04 on revenue of $19 billion based on Refinitiv consensus estimates. However, it’s difficult to compare reported earnings to analyst estimates for Citigroup, as the coronavirus pandemic continues to hit global economies and makes earnings impact difficult to assess. Citigroup shares fell 3.1% in the premarket. — Imbert, Stevens

U.S. oil fell to its lowest level in more than 18 years following the International Energy Agency’s monthly oil market report, which predicts that demand for crude in April will drop 29 million barrels per day year-over-year. The widely followed report said that April’s demand level could be the lowest since 1995, while forecasting that global oil demand will fall by 9.3 million bpd for the full year. The coronavirus pandemic has wreaked havoc on the oil market, sapping demand as worldwide travel slows and businesses shutter their doors. West Texas Intermediate, the U.S. benchmark, dropped to $19.20, its lowest level since Feb. 1, 2002 following the report. The contract later pared some of those losses and traded 2.3% lower at $19.65. Brent crude, the international benchmark, fell 3.7%, or $1.09, to trade at $28.51 per barrel. — Stevens

Shares of major airline companies surged in premarket trading on Wednesday after the companies reached deals for portions of $25 billion in payroll grants to help weather the coronavirus. American and United Airlines jumped 9.5% and 7.5%, respectively, while Delta and Southwest both rose more than 6%. The relief program requires that airlines not furlough or cut employees’ pay rates through Sept. 30. The grants were part of the more than $2 trillion coronavirus relief package. — Li

Bank of America reported quarterly profit that disappointed Wall Street, sending shares down 2.3% in premarket trading. The second-largest bank by deposits in the U.S. said it earned 40 cents a share, down 45% as BAC set aside $3.6 billion for anticipated loan losses due to the coronavirus pandemic. Analysts had been looking for 46 cents a share. Revenue of $22.8 billion was roughly in line with estimates, while trading volume easily beat estimates. — Cox

President Donald Trump said Tuesday evening that he believes some states will be able to lift social distancing rules and “reopen” their economies by the end of April. Trump said he “will be speaking to all 50 governors very shortly” and “will then be authorizing each individual governor of each individual state to implement a reopening.” His announcement came a day after the president claimed “total” authority over when to lift state-imposed coronavirus public health safety measures. Though many congressional lawmakers are eager to alleviate the economic pain caused by forced business closures in their states, public health officials warn that to ease rules now could yield a rebound in new COVID-19 cases in the U.S. — Franck

Tesla traded 6.2% higher after an analyst at Goldman Sachs initiated the electric car maker with a buy rating and a price target of $864 per share. “We are positive on Tesla because we believe that the company has a significant product lead in EVs, which is a market where we expect long-term secular growth,” Goldman Sachs auto analyst Mark Delaney said in a note to clients. — Fitzgerald, Imbert

U.S. stock index futures traded lower and indicated losses at the open as investors digest the latest earnings reports. The Dow Jones Industrial Average was set for a more than 300 point decline, or 1.3%, while the S&P 500 and Nasdaq-100 were slated to drop 1.5% and 0.9%, respectively.

Stocks rose on Tuesday as traders eyed optimistic comments from New York Gov. Andrew Cuomo about containment of the virus in the state, which is the epicenter of the outbreak in the U.S.

But the first look at bank earnings — from JPMorgan and Wells Fargo — did give the Street a taste of what could be to come as earnings season gets underway and companies begin to reveal the toll of the virus. — Stevens

– CNBC’s Yun Li, Maggie Fitzgerald, Jesse Pound, Hugh Son, Nate Rattner, Melissa Repko, Elizabeth Schulze, Michael Bloom, Patti Domm, Todd Haselton, Betsy Spring, Kate Rogers and Jeff Cox contributed reporting.

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