Stock market live Wednesday: Tech stocks rise, Dow falls 200, GDP -18%?

Shares of big technology companies built on their momentum as investors continued to flock to popular stay-at-home plays such as Netflix and Amazon. The broader market, however, fluctuated between gains and losses before losing ground in the final hour of trading.

• The Nasdaq closed up 0.51% for its 3rd straight positive day
• The Nasdaq is down 1.32% year-to-date and will be positive year-to-date if it goes above 8,972.60
• The Nasdaq is 33.52% off its 52-week low of 6,631.42
• The S&P 500 closed down 0.7% for its 1st negative day in 3
• The S&P 500 is down 11.83% year-to-date, on pace for its worst year since 2008 when it lost 38.49%
• The S&P 500 is 29.95% off its 52-week low of 2,191.86
• Nine of 11 sectors were negative today led by Utilities down 3.51%
• Tech led all sectors, rising 0.71%
• The Dow closed down 0.91% for its 1st negative day in 3
• The Dow is down 17.08% year-to-date, on pace for its worst year since 2008 when the Dow lost 33.64%
• West Texas Intermediate settled down 2.32% at 23.99 after hitting a high of 26.08 its highest level since Apr 9th when WTI traded as high as 28.36 turning in its first negative day in six —Francolla

Stocks slipped in the final hour of trading, with the Dow posting a loss of 218 points, or 0.9%, and the S&P falling 0.7%. Tech stocks held onto their gains, however, and the Nasdaq rose 0.5% for its third straight day of gains. —Pound

Trading volume in the SPDR S&P 500 ETF is well below its recent pace as the index hovers near the flat line. There had been 53.3 million shares of the fund traded as of 3:31 pm. Over the past 30 days, the average trading day has seen 149.6 million shares traded. —Pound, Imbert

BlackRock CEO Larry Fink said during a private call this week that things will get much worse for the economy as the country tries to recover from the coronavirus pandemic, according to a Bloomberg News report. Fink warned of mass bankruptcies, consumers being cautious and a corporate tax rate that could rise to as much as 29%, the report said. That warning comes even as the stock market has rallied about 30% from a low reached on March 23. —Imbert

The Dow and the S&P 500 hovered around the flatline with one hour left in the trading session as investors weighed the prospects of the U.S. economy reopening soon against the grim employment picture. The Dow traded just 20 points lower, or 0.1%, while the S&P 500 gained 0.1%. Both indexes were aiming for their third straight day of gains. —Imbert

Oil closed in the red on Wednesday, ending a winning streak that saw prices rise for five straight days. In a volatile session that saw swings from gains to losses, West Texas Intermediate ultimately settled 2.3% lower at $23.99 per barrel. Throughout the day WTI traded as high as $26.08, and as low as $22.58. International benchmark Brent crude shed 4% to settle at $29.72. As economies begin to reopen demand will see an uptick, although some still fear that it won’t be fast enough to combat the oversupply in the market. –Stevens

Space tourism stock Virgin Galactic rose more than 13% in trading Wednesday, a day after the company reported first quarter results that saw it log more than 400 new customer deposits toward future flights. Virgin Galactic’s quarterly cash burn remained stable, with an adjusted EBITDA loss of $53 million in the first quarter, and CEO George Whitesides told CNBC he’s “been heartened” by the continued demand for luxury experiences even during the coronavirus pandemic. —Sheetz

The integrated technology, data and analytics company that services the mortgage and real estate industries, reported earning earnings and revenue for the first-quarter on Tuesday. That was enough to get Stephens analyst John Campbell to change his best idea to Black Knight from RealPage, a property and real estate management software company. “We are making this change not because of a lack of bullishness on RealPage but rather because we believe that COVID-19 market disruptions not only barely phase BKI over the near term, but we believe that the company should be in a materially improved market position coming out of it,” he said. The stock is up over 3% this week and 12% this year. —Bloom

• Activision Blizzard trading at levels not seen since October 2018
• MarketAxess Holdings trading at all-time high levels back to its IPO in November 2004
• Old Dominion Freight Line trading at all-time high levels back to its IPO in October 1991
• Rollins trading at levels not seen since April 2019
• ServiceNow trading at all-time high levels back to its IPO in June 2012 —Hayes

The fitness center operator missed on earnings and revenue on Tuesday after the bell but it “doesn’t matter” Jefferies analyst Randal Konik said. “We believe investors should appreciate that PLNT 1) has a capital-light, low-risk, defensible model with attractive pricing, 2) a large and growing unit presence, 3) advertising flywheel and expanding affinity network, and 4) enhanced digital strategies that reduce friction,” he said. The firm did admit visibility was “limited” due to the coronavirus but is sticking with its buy rating. Shares of the company are up 4% in midday trading. —Bloom

The U.S. economy is contracting at a rate of 17.6% in the second quarter, according to the latest indication from the Atlanta Federal Reserve’s tracker. The GDPNow reading is down from the -12.1% initial indication on April 30. That in turns comes following the first reading of Q1 GDP that showed the first three months of the year contracting at a 4.8% rate. GDPNow uses data already received to show the pace of growth and does not take into account future impacts from the coronavirus. Its New York Fed counterpart, the Nowcast, which projects estimates current quarter and next-quarter growth, is pointing to a 9.3% drop in Q2. –Cox

Wendy’s — Shares of the fast-food chain surged more than 6% after the company reported that its U.S. sales are turning around from the crippling loss of business during coronavirus shutdowns. After plunging in March and the first two weeks of April, the company’s U.S. same-stores sales fell only 2.1% last week.

Beyond Meat — Beyond Meat stock rocketed 19% after the company reported that sales more than doubled in the first quarter amid a surge in demand in the pandemic. The plant-based meat producer also reported net profit of $1.8 million, or 3 cents per share, compared with a net loss of $6.6 million, or 95 cents per share, one year ago.

General Motors — Shares of General Motors gained more than 4% after the largest U.S. automaker said it eked out a $294 million profit for the first quarter despite the coronavirus fallout that has shuttered factories and devastated sales. GM’s pretax earnings per share was 62 cents per share, topping Wall Street projections of 30 cents earnings per share, based on Refinitiv consensus estimates. —Li

The Invesco QQQ Trust ETF (QQQ) — which tracks the performance of the 100-largest Nasdaq companies — gained more than 1% on Wednesday, reaching an all-time high on a relative basis to the SPDR S&P 500 Trust ETF (SPY). That relative outperformance comes as Facebook, Amazon, Apple, Netflix and Google-parent Alphabet all traded higher, adding to their sharp quarterly gains. “The value trade seemingly came and went in less than a week and you’re seeing growth quickly reassert itself as leadership,” said Keith Lerner, chief market strategist at Truist/SunTrust Advisory. —Imbert

The market’s tumble into a bear market from record highs was one of the swiftest declines ever. However, UBS’ Justin Waring thinks this “could end up being one of the mildest bear markets in history, at least based on some criteria.” Waring pointed out that, if the March 23 low for the S&P 500 holds, the index’s peak-to-trough move would be in line with the post-war average for a bear market. He also highlighted the S&P 500’s rally from the lows was the fastest-ever of such magnitude from a bear-market low. But while “we can hope that March was the low for this bear market, we should not count on it. Make sure that your portfolio and your plan are resilient to the risk that this bear market isn’t over yet,” he said in a note. —Imbert, Bloom

The broad-market sell-off sparked by the coronavirus could be an opportunity for active managers to make a comeback, Citigroup’s Tobias Levkovich said in a note. “While there will be money to make in this new world post-COVID, it may not be as easy as it has been since 1982, despite some severe bumps along the way,” said Levkovich, the bank’s chief U.S. equity strategist. “We could be entering a period of stock selection versus just buy the market, with more positives for active management.” —Imbert, Bloom

The major averages hovered around the flatline in midday trading as investors weighed the prospects of the economy reopening. The Dow traded just 34 points lower, or 0.1%. The S&P 500 was marginally lower. The Nasdaq Composite outperformed, rising 0.9% as big tech shares advanced. —Imbert

Wall Street analysts praised Allstate after the insurer beat earnings estimates on Tuesday. “Amidst uncertainty, a defensive play with buybacks,” Citi analyst Suneet Kamath said. 

“ALL’s results were strong overall, and affirm our bullish view on the stock,” JPMorgan analyst Jimmy Bhullar said. The firm added that Allstate may see some coronavirus headwinds but it still sees plenty of upside in the stock. “In our view, ALL is the best combination of a strong franchise, healthy business fundamentals, and an attractive valuation in the P&C sector,” he said. Shares of the company are up 10% over the last month. —Bloom

Shares of Disney have climbed 2.8% Wednesday after falling in overnight trading on the heels of the company reporting weaker than expected earnings and suspending its dividend. Wall Street had turned bearish on the stock in the weeks before the quarterly report, with several analysts downgrading it. Needham said in a note after the report that Disney still has “best-in-class assets and leaders” despite rough economic conditions. —Pound

The multinational media conglomerate reported earnings on Tuesday and cut its full year outlook due to the economic crisis, but it’s still a “top pick” according to Bank of America. “TRI is a quality defensive compounder that we expect to hold up well amid COVID-19 pressures. It also boasts potential for solid organic revenue growth acceleration (once we get through COVID-19), expanding margins, strong cash flow/balance sheet, and a healthy dividend,” analyst Gary Bisbee said. The firm also said the company was a “defensive business that we expect to outperform most of its information services peers in 2020.” Shares of the company are up 17% over the last year. —Bloom

Wednesday marks the 10-year anniversary of the infamous Flash Crash. On May 6, 2010, the Dow Jones Industrial Average plunged nearly 1,000 points and global markets wiped out about $1 trillion in a matter of minutes before rebounding. “The machine broke down. That flash crash had a lot to do with machine overrunning people,” CNBC’s Jim Cramer said on Wednesday. Cramer said investors’ confidence in the equity markets dampened to a great extent following that incident. “This industry used be about buying a piece of America and now I don’t know what it is,” he said. —Li

The Dow slipped into negative territory shortly before 10 a.m. and is trading near the flat line. Energy and financial stocks both weighed on the index. The gainers were mainly big tech stocks, including Apple and Microsoft. Disney also reversed overnight losses to gain 1.9%. —Pound

• Citi downgraded Snap to sell from neutral.
• Raymond James upgraded American Eagle to outperform from market perform.
• DA Davidson downgraded Pinterest to neutral from buy.
• Deutsche Bank downgraded Tripadvisor to hold from buy. —Bloom

The Treasury is bringing back the 20-year bond for the first time in 34 years, and it surprised the market with an even bigger rollout than expected. Strategists said the Treasury is moving faster to extend the duration of U.S. debt, which is ballooning with the trillions the government is spending in response to the coronavirus. The Treasury also added more issuance in other categories, including the 10-year, raising auction sizes for the notes by $5 billion to $32 billion. That helped send yields higher across the curve but more so at the long end. The 10-year was yielding 0.71%, its highest since April 15.

“For the 20-year, the range people were expecting was $13 billion to $15 billion, and it came in at $20 billion,” said John Briggs, head of strategy at NatWest Markets. Strategists say the new issue should be attractive to pensions and insurers looking for longer duration debt. Also, strategists say the very low yield on the 10-year may send some investors into the 20-year, offering even slightly more yield.

The Treasury is immediately funding virus spending with T-bills, which have a duration of up to 12 months, and Briggs said bill issuance will soon be about $1.8 trillion larger than in March. The market is now watching how quickly the government will move to replace that short term debt with longer dated instruments. —Domm

Stocks opened higher on Wednesday, with all three indexes looking to make their third straight day of gains. The Dow rose about 170 points, or 0.7%. Stocks that would benefit from a quicker than expected reopening, including airlines and cruise lines, rose in early trading. The moves follow an ADP jobs report that showed 20.2 million job losses in April. —Pound

St. Louis Federal Reserve President James Bullard said Wednesday that the April jobs report on Friday will likely be one of the worst in history. “I’ve long maintained that the main impact here will be in the second quarter, the negative impact. We’re going to see crazy ADP numbers today and the jobs report will probably be one of the worst ever on Friday,” Bullard told CNBC’s Steve Liesman. “But that’s kind of expected because you’re using the unemployment insurance program to provide pandemic relief,” he added. “That’s exactly what we want to do.”

ADP data on Wednesday showed private payrolls slashed more than 20 million jobs in April amid widespread shutdowns aimed to contain the spread of the coronavirus. – Li, Franck

The latest private payrolls report from ADP and Moody’s Analytics showed private payrolls were slashed by 20.2 million in April as the coronavirus pandemic forced employers of all sizes to lay off people. The print is the worst in the survey’s history going back to 2002. Still, it was slightly better than the Dow Jones estimate of a 22 million payroll reduction. – Imbert, Cox

Oil prices turned lower in early trading on the East Coast as oversupply fears counteracted optimism about economies around the world reopening. West Texas Intermediate slipped 1.75% to trade at $24.13 per barrel, after earlier hitting a session high of $26.08. International benchmark Brent crude shed 21 cents to trade at $30.76 per barrel. Both contracts have posted gains over the last five sessions amid claims that demand for oil may have bottomed. – Stevens

President Donald Trump said the choice to reopen and jumpstart the economy could inevitably cost some Americans their lives. “It’s possible there will be some [deaths] because you won’t be locked into an apartment or house or whatever it is,” Trump told ABC’s David Muir in a rare network news interview. “There’ll be more death, that the virus will pass, with or without a vaccine. And I think we’re doing very well on the vaccines but, with or without a vaccine, it’s going to pass, and we’re going to be back to normal,” Trump said. –Li

Shares of Activision Blizzard gained more than 6% during Wednesday’s premarket trading after the company beat top and bottom-line estimates in the first quarter. The video game maker earned an adjusted 76 cents per share, well above the consensus estimate of 38 cents, with revenue also topping estimates. The company said it saw better-than-expected results from key franchises “as populations sheltering at home turned to our content for entertainment and social connection.” Activision also gave an upbeat outlook for 2020. Shares have gained 15% this year, while the S&P 500 has dropped 11%. –Stevens

Disney announced that is was suspending its dividend for the first half of the fiscal year after reporting weaker than expected earnings per share for its fiscal second quarter. Revenue for the company’s parks segment was down 10%. The company’s theme parks around the world have been closed due to the coronavirus, but Disney said it is planning to reopen its Shanghai park on May 11. The stock has fallen 1.5% in extended trading. —Pound

More than 1.2 million people in the U.S. have been infected by the coronavirus as of Wednesday, with the death toll climbing to 71,000, according to data from Johns Hopkins University. Globally, more than 3.65 million cases have been confirmed and over 256,800 people have lost their lives. Some countries are experiencing an increase in infections. Spain’s daily death toll rose to 244 fatalities following three straight days of less than 200 reported deaths per day, the country’s health ministry reported on Wednesday. Meanwhile, Singapore reported another 788 cases of the coronavirus, bringing the country’s total number of infections to 20,198 since the outbreak. –Li

Oil prices moved higher on Wednesday for the sixth straight day of gains as economies around the world reopening counteracted an ongoing supply glut. West Texas Intermediate, the U.S. benchmark, gained 76 cents, or 3.09%, to trade at $25.32 per barrel, while international benchmark Brent crude traded 2.2% higher at $31.66 per barrel. Energy stocks were higher in premarket trading on the heels of oil’s advance, with the XLE, which tracks the sector, posting a gain of nearly 2%. Exxon and Chevron were up 1.3% and 1.5%, respectively. –Stevens

Shares of CVS gained more than 4% in premarket trading after the company said revenue in the first quarter rose 8% year-over-year as consumers rushed to stock up on staples amid the coronavirus pandemic. The drugstore chain reported adjusted earnings per share of $1.91 and $66.8 billion in revenue. CVS has stayed open during the pandemic, and in March said it was planning to hire 50,000 people in various roles in an effort to meet demand. –Stevens

ADP data is expected to show the loss of 22 million private payrolls in April, about the same economists expect to see lost in Friday’s government jobs report. The 8:15 a.m. report is a helpful guide for what might be in the important April employment report, also expected to show unemployment at 16.1%. ADP has not always been an accurate reflection of the overall government report but it does give helpful insight into the private sector workforce, including small businesses. —Domm

U.S. stock futures rose on Wednesday, putting Wall Street on pace for its third straight day of gains as traders continue to bet on the economy reopening soon. Dow Jones Industrial Average futures were up 187 points, or 0.8%. S&P 500 and Nasdaq 100 futures both traded 0.7% higher. Crude prices were also up for a sixth day in a row. President Donald Trump said Tuesday that “there’ll be more death” from the coronavirus, but added  that not reopening businesses would also cost people their lives in other ways. —Imbert

–With reporting by Christopher Hayes, Gina Francolla, Yun Li, Jeff Cox, Patti Domm and Thomas Franck.

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