Stock market live Thursday: Rally evaporates in final hour, Dow down 150, social media stocks drop

Stocks started the day higher in what looked like would be another session of strength, but a sell-off late in the day sent the major averages into negative territory and they closed in the red. The move lower was sparked by President Donald Trump announcing that he will hold a press conference on China on Friday as geopolitical tensions rise, prompting some investors to fear that the U.S.-China trade deal may face hurdles. Here’s what happened:

• S&P 500 closed down 0.21% for its first negative day in four
• S&P 500 is up 2.51% this week, on pace for its third positive week in four
• S&P 500 is 10.72% below its intraday all-time high of 3,393.52 from February 19
• S&P 500 is 38.23% above its 52-week low of 2,191.86
• Dow closed down 0.58% for its first negative day in three
• Dow is up 3.82% this week, on pace for its best week since April 9
• Nasdaq Composite closed down 0.46% for its first negative day in four
• Nasdaq is up 0.48% this week, on pace for its third positive week in four
• Six out of 11 sectors were negative Thursday, led by energy, which was down 2.91% — Francolla, Li

President Donald Trump called Twitter’s behavior “inappropriate” on Thursday, as he urged action against social media platforms so that they no longer have a liability shield. The president said he has directed the attorney general to cooperate with states to enforce laws against what he termed the deceptive business practices of social media companies. The president has been at odds with Twitter ever since the company slapped a “fact-checking” label on two of his tweets. Twitter fell more than 4% during Thursday’s session, while Facebook dipped 1.6%. – Stevens

After spending much of the day in the green, the major averages sold off into the close. The Dow fell 147 points for a loss of 0.58%, after rising as much as 210 points earlier in the session. The S&P 500 closed 0.2% lower, while the Nasdaq Composite shed 0.46%. Stocks dipped into the red in the final hour of trading after President Donald Trump said he would hold a news conference on Friday regarding China, leaving some investors concerned that the U.S.-China trade deal could face hurdles. – Stevens

Stocks dropped to their lowest levels of the day just minutes before the closing bell after President Donald Trump said he will hold a press conference regarding China on Friday. The Dow dropped 190 points for a loss of 0.7%. The S&P 500 fell 0.2%, while the Nasdaq dipped 0.45%. Investors have been concerned that anger at China because of its handling of the early coronavirus response could lead to an unraveling of the trade deal with the U.S. – Stevens

The coronavirus pandemic has been not only a health crisis but also an economic crisis that has hurt those most with the least ability to shoulder the new pressures, Philadelphia Federal Reserve President Patrick Harker said. As combats to halt the virus spread have shut down large portions of the economy, the biggest impact has been to low wage earners in service-related industries, helping to widen the nation’s wealth disparity, he said. “Both as a health and an economic crisis, COVID-19 has the cruel effect of hurting those who were already most vulnerable,” Harker said Thursday. Philadelphia Fed economists have found that the biggest economic hits have been to the poorest neighborhoods in the district. Pennsylvania’s unemployment rate in April was 15.1%, compared to the national level of 14.7%. The state continues to have some of the strictest stay-at-home regulations in the country. – Cox

Stocks pared gains with a little more than 30 minutes to go in the trading session after President Donald Trump said that he will hold a press conference Friday on China as geopolitical tensions rise. The Dow last traded 54 points higher, after previously gaining more than 200 points. – Stevens

Oil reversed early losses and settled in the green on Thursday as data from the U.S. Energy Information Administration showed an uptick in gasoline demand. West Texas Intermediate crude rose 90 cents, or 2.7%, to settle at $33.17 per barrel, after dropping more than 5% earlier in the session. International benchmark Brent crude gained 55 cents to settle at $35.29 per barrel. The EIA said that gasoline demand rose 500,000 barrels to 7.3 million barrels per day for the week ending May 22, while also noting that U.S. production declined by another 100,000 barrels. Refinery utilization also rose, which offset concerns over a larger-than-expected build in inventory. – Stevens

With roughly one hour left in the trading session, the major averages were set to add to this week’s strong performance. The S&P 500 and Nasdaq were up 0.7% and 0.6%, respectively. The S&P 500 was also on pace to notch its first four-day winning streak since February. The Dow was up for a third day, gaining about 100 points. —Imbert

An analyst at Imperial Capital downgraded Disney to underperform from in line, noting the stock has “risen too far too fast and the performance is due simply to excitement around the prospects of the domestic theme parks re-opening.” “As such, we are advising that investors take profits, as Disney now looks like a name that should be ‘traded,’ rather than ‘owned,’ at least for now.” The analyst also timed his price target on the stock to $105 per share from $107 per share. Disney traded down 2.4% on Thursday, hovering around $118.50 per share. —Imbert, Bloom

The iShares Expanded Tech-Software ETF (IGV), which tracks 100 software stocks in the technology and communication services sectors, popped 3% in afternoon trading on Thursday, on pace for its best day since April 29. The rally was led by a 9% jump in human resource software Workday on the back of strong earnings. Customer service software company Zendesk soared 8% Thursday and tax software company Avalara gained more than 7%, pushing the ETF to its session high. –Li, Francolla

Shares of UPS popped to their session high after the shipping company said it is adding “peak” surcharges for e-commerce companies such as Amazon and Best Buy amid a surge in demand. The move, starting on Sunday, marks the first time UPS has imposed extra fees during a non-holiday period. The stock last traded up 0.6% on the day. –Li

HP Inc. — Shares of the tech company plunged more than 11% after it missed revenue expectations fiscal second quarter. HP reported $12.47 billion in sales for the quarter, while analysts were expecting $12.93 billion, according to Refinitiv. JPMorgan also downgraded the stock to neutral from overweight.

Abercrombie & Fitch — Shares of the clothing retailer dropped more than 5% after reporting wider than expected losses. Abercrombie reported a loss of $3.29 per share on revenue of $485 million. Analysts polled by Refinitiv expected a loss of $1.39 per share on sales of $497 million. Sales in the Asia-Pacific region dropped by more than 50% on a year-over-year basis, while U.S. sales fell over 30%. The company’s Hollister brand also registered revenues that were down 36% from the year-earlier period.

Read more movers here. —Pound

The major averages were headed for a three-day winning streak on Thursday as the most recent U.S. unemployment data signals the economy may be bottoming from the coronavirus-induced shock. The Dow traded 115 points higher, or 0.5%. The S&P 500 and Nasdaq also gained around 0.5% each. —Imbert

• Dollar General (DG) trading at all-time high levels back to its IPO in Nov, 2009
• Home Depot (HD) trading at all-time high levels back to its IPO in Sep, 1981
• Lowe’s (LOW) trading at all-time high levels back to its IPO in Oct, 1961, LOW has been traded on the NYSE since Dec, 1979
• Tractor Supply (TSCO) trading at all-time highs back to its IPO in 1994 after being taken private by an LBO in 1982
• Monster Beverage (MNST) (formerly Hansen Natural) trading at all-time high levels back to its listing on the NASDAQ in 1992
• S&P Global (SPGI) trading at all-time high levels back through our history to 1972
• IDEXX Laboratories (IDXX) trading at all-time high levels back to its IPO in 1991
• UnitedHealth (UNH) trading at all-time high levels back to its IPO in 1984
• Fastenal (FAST) trading at all-time high levels back to its IPO in August, 1987
• Old Dominion Freight Line (ODFL) trading at all-time high levels back to its IPO in Oct, 1991
• Synopsys (SNPS) trading at all-time high levels back to its IPO in Feb, 1992 — Hayes

The S&P 500 has rallied more than 36% from its late-March closing low. This makes it the biggest “bear market bounce ever,” LPL Financial’s Ryan Detrick pointed out in a tweet Thursday. That bounce surpassed the index’s surge from the March 2009 low. Back then, the S&P 500 rallied 27.4% from the financial crisis lows. A surge of this magnitude, Detrick says, “opens the question, is this not just a bear market bounce?” —Imbert

Jim Cramer said on “Squawk on the Street” that he was “afraid to go all in on this reopen trade since it’s already had a pretty big run. “One thing that may weigh on the large tech stocks and keep the trend going is the potential for regulation, he said.”It’s already maybe too far, too fast. It’s very hard to figure, particular because FANG is being distorted by the president’s tweets, Facebook being lumped in with Twitter,” Cramer said. —Pound 

Retailers are coming off a painful quarter as the pandemic shuttered stores worldwide, but looking forward company execs are optimistic that the second quarter will tell a different story. “We have been pleased with the traffic levels and sales that we have seen so far. There is clearly pent-up demand,” Burlington Stores CEO Michael O’Sullivan said. The company missed top and bottom line estimates for the first quarter, but said that 332 stores have now reopened with the remainder expected to open by the middle of June.

Meanwhile Abercrombie & Fitch CEO Fran Horowitz said that with stores reopening the company has “experienced sales productivity for reopened stores of approximately 80%…as compared to last year’s levels,” while Dollar Tree CEO Gary Philbin said he’s “extremely pleased with the momentum we are seeing in our business early in the second quarter.” That said, many retailers have stopped short of giving full-year guidance due to continued uncertainty surrounding the pandemic. The SPDR S&P Retail ETF (XRT) was down about half a percent on Thursday, but it has gained 13% this month. – Hum, Stevens

White House officials have decided to not release updated economic projections this summer due to what’s expected to be a historic growth pullback induced by the Covid-19 outbreak, The Washington Post reported Thursday. The Post, which cited two anonymous administration officials, said the White House made its decision based on the unprecedented volatility the coronavirus has introduced, making it tricky to model economic trends.The White House has for decades released a federal budget proposal each February and follows up with a mid-summer review with refreshed estimates and commentary on economic trends like inflation, GDP growth and joblessness. — Franck 

Minutes into the opening bell, the 30-stock Dow quickly erased its early gains of more than 100 points and dipped into negative territory briefly. It last traded up 25 points. The S&P 500 and the Nasdaq were also fluctuating around the flat line.—Li 

Oil prices recovered early losses on Thursday – even briefly trading in positive territory – ahead of inventory data at 11:00 am ET. West Texas Interemdiate fell 15 cents, or 0.46%, to trade at $32.66 per barrel, while international benchmark Brent crude dipped 7 cents to $34.67. Earlier in the session WTI had been down more than 5%. WTI is on track for its best month ever, but growing geopolitical tensions have pressured prices in recent sessions. On Wednesday the contract settled more than 4% lower for its second day of losses in three sessions. – Stevens

The market built on its strong rally this week as investors continue to bet on an economic recovery from the pandemic. The Dow Jones Industrial Average rose about 100 points at the open, and is on pace for a third straight day of gains. The S&P 500 climbed 0.3%, after closing above the 3,000 threshold and its 200-day moving average on Wednesday. The tech-heavy Nasdaq Composite underperformed, trading 0.1% lower at the open. –-Li 

Shares of discount retailer Dollar Tree jumped nearly 10% in premarket trading on Thursday following its blowout earnings thanks to a change on consumer behavior spurred by the covid-19 pandemic. Dollar Tree reported earnings per share of $1.04 on revenue of $6.29 billion. Analysts polled by FactSet were expected earnings of 85 cents per share on revenue of $6.14 billion. Same-store sales soared 7%, compared to the estimate of 4.4%. Family Dollar same-store sales jumped 15.5%, compared to the 8.1% forecast. “After a relatively normal first month in the quarter, our stores experienced an unprecedented spike in demand for certain products in March,” Dollar Tree CEO Gary Philbin said in a release. — Fitzgerald

The U.S economy shrank 5% in the first quarter, versus a preliminary reading of a 4.8% decline, according to a revision from the Commerce Department. The coronavirus pandemic caused deep damage on the U.S. economy, dragging down consumer spending, exports and inventories. This also marked the first negative GDP reading since in the first quarter of 2014. —Li

Another 2.123 million Americans filed first-time jobless claims last week, the Labor Department said on Thursday. 
Economists surveyed by Dow Jones were expecting 2.05 million new filings. Since the pandemic was declared in mid-March, more than 40 million have filed claims. However, pace of new claims continues to decline. Continuing claims, or those who have been collecting for at least two weeks, fell 3.86 million from the previous week to 21.05 million. This number offers a clearer picture of how many workers are still sidelined.– Li, Cox

The S&P 500 has crossed the monumental 3,000 threshold on rising optimism about an economic recovery, but the big money on Wall Street is skeptical of the comeback. In fact, large spectators, hedge funds and big investment firms have pushed their net short positions on the S&P 500 futures to the most aggressive since February 2016, according to Bank of America. “No belief in rally from futures positioning,” Stephen Suttmeier, the bank’s technical analyst, said in a note. “After a 30%+ rally in the SPX from late March, futures positioning data suggest that large speculators, leveraged funds and asset managers do not believe in the US equity market rally.” —Li

The shift away from stay-at-home stocks and into those that would benefit from a quick economic recovery continued in premarket trading on Thursday. Shares of Netflix and Amazon fell 0.6% and 0.5%, respectively, though trading of the streaming video giant was light. Travel stocks rose, however, with Hilton gaining 1.8% and Carnival climbing 0.9%. —Pound

JPMorgan raised its price target on shares of Apple to $365 from $350 based on strength in the tech giant’s iPhone division. The firm’s new target is about 18% above where the stock currently trades. “The recent launch of the iPhone SE, with a strong value positioning, is set to expand Apple’s addressable opportunity in emerging markets, particularly in markets like India,” JPMorgan analyst Samik Chatterjee said Thursday in a note to clients. The firm said the new phone can “change the landscape” in emerging markets, and that the “manufacturing and retail footprint [will] drive synergies with a better positioned portfolio.” Shares of Apple have gained 8% this year. —Stevens

Twitter shares dropped more than 3% in the premarket as President Donald Trump is expected to sign an executive order targeting political bias at social media platforms. The order would require the FCC to clarify regulations under a law that largely exempts online platforms from legal liability for users’ posts. The signing would come after Twitter fact-checked some of Trump’s tweets. —Imbert

The S&P 500 closed above its 200-day moving average for the first time since March 4 on Wednesday, which means the index could be poised for more gains ahead. A moving average is a technical indicator used to determine momentum, and the level the S&P had to surpass was 3,000. During Wednesday’s session the benchmark index jumped 44 points to close at 3,036. The S&P had traded above the key level during Tuesday’s session, but wasn’t able to hold it and pared gains into the close. The index is now 38.5% above its recent low on March 23. —Stevens

Another 2.05 million Americans probably filed first-time claims last week for unemployment insurance, according to economists surveyed by Dow Jones. That would mark a continued decline in the pace since the number topped out at 6.9 million in late March. Nearly 40 million workers have filed for claims since the coronavirus pandemic began. Continuing claims have numbered around 25 million, probably a more accurate representation of the actual unemployment level. – Cox

Dow Jones Industrial Average futures indicated a solid start for the 30-stock average on Thursday as investors try to add to their strong gains for the week. Dow futures traded 160 points higher, or 0.6%. S&P 500 futures gained 0.2%. The Dow was coming off of back-to-back rallies that put it up 4.4% week to date and above 25.000 for the first time since March. Investors have been rotating this week into stocks that have more upside as the economy reopens while shifting away from “stay-at-home” names such as Netflix and Zoom Video. To be sure, Thursday’s gains were kept in check after China lawmakers approved a national security bill for Hong Kong. The bill will bypass Hong Kong’s legislature, raising concerns over the longevity of Hong Kong’s “one party, two systems” principle. —Imbert

—With reporting from Thomas Franck, Michael Bloom, Christopher Hayes, Gina Francolla, Maggie Fitzgerald, Jesse Pound, Robert Hum and Jeff Cox.

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