Stock market live Wednesday: Dow sinks 700, Nasdaq snaps 8-day winning streak, virus cases spike

U.S. stocks sank on Wednesday as an acceleration of Covid-19 cases sparked angst among investors about the economy and recent reopening efforts. Here’s what happened:

• S&P 500 closed down 2.59% for its first negative day in three and its worst day since June 11 when the S&P lost 5.89%
• S&P is down 5.59% this year
• S&P is 10.1% below its intraday all-time high of 3,393.52 from Feb. 19
• S&P is 39.17% above its 52-week low of 2,191.86
• The Dow Jones Industrial Average dropped 710.16 points, or 2.7%, to 25,445.94
• The Dow had its worst day since June 11 when the Dow lost 6.9%
• The Dow is down 10.84% this year
• The Nasdaq Composite slid 2.2% to 9,909.17, posting its first daily decline in nine sessions
• The Nasdaq had its worst day since June 11 when it lost 5.27%
• All 11 sectors were negative Wednesday, led by energy, which is down 5.54% for its worst day since June 11
  -Francolla, Li

The economy should stage a “robust” growth spurt as 2020 progresses though that would be jeopardized by another widespread shutdown, St. Louis Fed President James Bullard said Wednesday. Even with the recent rise in cases for some states, Bullard said data show that the daily infections and in particular hospitalization and death rates have fallen substantially from the worst phase of the coronavirus pandemic in mid-April. With that, second-quarter growth is likely to be the worst in post-World War II history, but he thinks the U.S. is “going to be able to manage pretty well. My base case is we’ll have a pretty robust recovery in the second half of the year.” He added that people shouldn’t expect a Covid-19 vaccine soon and instead should focus on prevention and management measures. One area he cautioned against is taking the same approach going forward as the country did during the shutdown. “Depression would develop if we had many, many businesses closing up shop all at once, and that would take a long time to recovery from. So we definitely want to stay out of that situation,” Bullard said. “An important part of the depression risk that we face is [if] we get into that situation, we’ll have worse health outcomes and a worse economy. So it’s the worst of all worlds to be in that situation. We don’t want to be there.” – Cox

Stocks tumbled on Wednesday as a slew of negative headlines about the spikes in new coronavirus cases damped hopes for a smooth economic recovery. The Dow sank 700 points, weighed down by sharp losses in Dow Inc and Boeing. The S&P 500 finished the day 2.5% lower, while the Nasdaq Composite fell 2.1%, snapping an eight-day winning streak —Li

The market sell-off deepened minutes before the closing bell, with the Dow sinking more than 700 points. The 30-stock Dow had traded down less than 600 points in the final hour. The S&P 500 dropped 2.5%, and the Nasdaq fell 2.1%.–Li

• WTI (AUG) settled down 5.85% at $38.01 hitting a low of 37.31 its lowest level since June 18
• WTI is up 7.1% this month, on pace for its second straight monthly gain
• WTI is up 85.6% this quarter, on pace for its best quarter since Q3 1990
• WTI is down 37.75% this year, on pace for its worst year since 2014
• Gold (AUG) settled down 0.39% at $1,775.1 hitting a high of 1,796.1 its highest level Oct. 5, 2012
• Gold is up 1.34% this month, on pace for its 4th straight positive month
• Gold is up 16.55% this year –Francolla, Li

Prudential Financial chief market strategist Quincy Krosby said that Wednesday’s sell-off may not continue in the coming weeks if the death rate from patients with coronavirus doesn’t increase. “Even this episode, it depends on the death rate,” she said, referencing the difference in average age that some states are seeing for infections and hospitializations. “This is important to the market because if we don’t move toward a dramatic death rate, what it would suggest is there are treatments available to keep patients alive and have them leave the hospital.” Krosby also said that some of Wednesday’s sell-off may be due to the traditional weakness that follows a “quadruple witching” event, which occurred last week. —Pound

The major averages were on pace for their biggest one-day declines in nearly two weeks as coronavirus cases in California, Texas and Florida spike while New York, New Jersey and Connecticut issue quarantine orders for visitors coming from hotspot states. The Dow slid 721 points, or 2.7%, while then S&P 500 dropped 2.6%. The Nasdaq Composite fell over 2% as well and was set to snap an eight-day winning streak. —Imbert

New research from State Street Associates and Massachusetts Institute of Technology indicates that the U.S. economic recovery is most likely to be “U-shaped.” The study used a statistic called the Mahalanobis distance, which is a measure initially used to analyze human skulls. The study group previously warned that the economy was vulnerable to a recession — with a 70% probability — even before the pandemic actually hit. A “U”-shaped recovery is one where the economy stays longer at the bottom of the recession in its path to recovery, which typically takes up to two years. —Li

California reported a total of 7,149 new confirmed cases of the coronavirus on Tuesday, its biggest daily increase ever, the state’s department of public health said Wednesday. It also marked a 3.9% rise on a daily basis, higher than a seven-day average of 2.5%. Many businesses have reopened in California, including hair and nail salons, gyms and bars. —Li

Stocks were on pace for their worst day since June 11 under heavy trading on Wednesday. The SPDR S&P 500 ETF Trust (SPY) has traded more than 75 million shares with roughly two hours left in the session. For reference, the SPY’s 30-day average volume is 104.58 million. —Imbert

Evercore ISI strategist Dennis DeBusschere linked Wednesday’s equity sell-off to the spike in Covid-19 cases in the Sun Belt states. But aside from Wall Street’s fears of stricter quarantines and business closures, DeBusschere said the resurgence also weighs against President Donald Trump’s reelection odds, which could give challenger Joe Biden the chance to curb the 2017 tax cuts.

The “market is going down on this…bottom line,” DeBusschere wrote. It “brings up the question: What will California do? They have had consistent case growth and never really opened up.” Markets may also dislike the fact that an acceleration of the disease would reinforce calls for even more fiscal stimulus from Congress if investors believe the spending wouldn’t help slow the virus, the strategist wrote. — Franck

About 14 stocks traded lower at the New York Stock Exchange for every advancer on Wednesday as Wall Street suffered its biggest sell-off since June 11. Overall, 2,692 NYSE-listed names fell while just 188 stocks rose. Within the S&P 500, just six stocks were higher. — Imbert

Shares of major airlines extended their losses on Wednesday after the governors of New York, Connecticut and New Jersey said that travelers from coronavirus hot spots need to quarantine for two weeks when entering those states. United and Delta have both dropped over 8% so far during Wednesday’s session, while American and Southwest fell more than 6%. — Pound

The major averages were sharply lower around midday amid mounting concerns over a spike in cases in Florida and Texas. The Dow was down more than 700 points, or 3%, while the S&P 500 slid 2.8%. The Nasdaq Composite was set to post its first decline in nine sessions, losing 2.6%. The Dow, S&P 500 and Nasdaq were all on pace for their worst day since June 11. — Imbert

The Florida Department of Health reported 5,508 new coronavirus cases Wednesday, surpassing the previous record single-day increase of 4,049 new cases reported on Saturday. Florida is among a handful of states that includes Arizona and Texas that are experiencing expanding outbreaks of the virus.As cases continue to rise by the thousands every day in Florida, the percent of total tests coming back positive has also risen. On Wednesday, the state reported that 15.91% of all tests came back positive, up from 10.82%. That increase indicates that the surge in new cases is not due solely to ramped up testing. — Feuer

New York Gov. Andrew Cuomo said travelers from states with high coronavirus infection rates that are coming to New York, Connecticut and New Jersey must quarantine for 14 days. The travel advisory was made jointly with the governors of those states.

The Dow last traded down 800 points. — Pound

Market losses accelerated to their lows of the session around 11 a.m. after Florida confirmed its Covid-19 cases jumped by 5,508 on Tuesday, a new record. The state also said its positivity rate rose to 15.91% from 10.82% and total cases in Florida now sum to 109,014. The Dow swooned more than 650 points (about 2.5%) following the announcement while the S&P 500 traded down 2.3%. The Nasdaq Composite, the relative leader, lost 2%. — Franck

Shares of bankrupt car rental company Hertz spiked again on Wednesday, at one point rising by more than 100%. The stock, which closed at $1.24 per share on Tuesday, hit $2.49 per share on Wednesday. Shortly after 11 a.m., the stock was trading at $2.09 per share, representing a leap of 69%. The stock had been trending down in less-volatile trading in recent sessions. —Pound

Shares of Disney fell 3% to its low of the day after its theme park workers urged to postpone the reopening amid the rise in new coronavirus cases in Florida. More than 7,200 workers have signed a petition asking Disney and government officials to delay the Disney World reopening next month. “This virus is not gone, unfortunately it’s only become worse in this state,” the petition posted on MoveOn.org said. CNBC could not verify the names on the petition were Disney park employees. Last month, Disney proposed a phased reopening of Walt Disney World’s Magic Kingdom and Animal Kingdom on July 11, while Epcot and Hollywood Studios would reopen on July 15. –Li

• Cowen upgraded Dick’s Sporting Goods to outperform from market perform.
• Barclays raised its price target on PayPal to $199 from $169.
• DA Davidson upgraded Columbia Sportswear to buy from neutral.
• Oppenheimer initiated Baxter as outperform.
• Citi upgraded Clear Channel to buy from neutral.
• Deutsche Bank raised its price target on Square to $120 from $80.
• BTIG downgraded PayPal to neutral from buy.
• JPMorgan downgraded Cheesecake Factory to underweight from neutral.
• Wedbush downgraded Nintendo to neutral from outperform.
• DA Davidson upgraded Morgan Stanley to buy from neutral.
• Barclays downgraded Royal Caribbean and Norwegian to equal weight from overweight.
• Goldman Sachs raised its price target on Alphabet to $1,775 from $1,425.

Pro Subscribers read more here.– Bloom

The market sell-off deepened in morning trading with the 30-stock Dow falling about 400 points. The S&P 500 dropped about 1.3%, while the Nasdaq dipped 0.9%. Big technology shares, which opened higher, are now in the negative territory. Netflix traded 0.5% lower, and Facebook fell 2.2%. Amazon is down 0.3% after hitting a record earlier in the session. –Li

Shares of Amazon gained 0.2% to an intraday record of $2,796.00 in morning trading. The e-commence giant has soared nearly 50% this year amid a surge in demand. The stock last traded down 0.4%. —Li

The Dow dropped 220 points, or 0.9%, at the open as investors grew concerned over the rising number of coronavirus cases. The S&P 500 dipped 0.7% and the Nasdaq slid 0.3%. If the Nasdaq ends the day lower, it will be its first daily decline in nine sessions. —Imbert

CNBC’s David Faber reported Dell Technologies is exploring its options with regards to its massive stake in VMWare, confirming earlier reports from the Wall Street Journal. Faber reported, citing sources, that a sale or a spinoff of the VMWare stake can’t happen until after September 2021. Dell shares were up more than 11% in the premarket. –Imbert

The International Monetary Fund projected that the contraction in the global economy will be worse than previously feared, shrinking 4.9% in 2020. Previous projections called for a 3% decline. The Fund also lowered growth projections in 2021, saying the global economy will expand 5.4%, down from 5.8%. —Pound, Amaro

Shares of companies that would benefit from the economy reopening were under pressure on Wednesday amid a spike in coronavirus cases. United Airlines slid 3.8% in the premarket. Delta, American and Southwest fell more than 2% each. Cruise stocks such as Carnival and Royal Caribbean were down at least 4.1%. Gap shares dropped 2.2%. —Imbert

Oil moved lower on Wednesday as fears of a second wave of Covid-19 cases, and what it could mean for oil demand, weighed on prices. West Texas Intermediate, the U.S. oil benchmark, slipped 2.1%, or 85 cents, to trade at $39.52 per barrel. International benchmark Brent crude shed 77 cents, or 1.8%, to trade at $41.86. Rystad Energy’s Paola Rodriguez Masiu also pointed to building stockpiles as reason for the pullback in prices. “If the pandemic triggers a second round of lockdowns, storages will struggle to accommodate the unused oil and the gasoline uptick that we currently see will be scrapped if new travel restrictions are put in place,” she said. On Monday WTI closed above the key $40 level for the first time since early March. –Stevens

The U.S. Trade Representative is eyeing new tariffs on $3.1 billion of exports from France, Germany, Spain and the U.K., according to a notice released Tuesday evening. The products subject to the new duties include olives, beer, gin and trucks, and the tariff can be up to 100%, the statement said. The U.S. also wants to increase existing tariffs on products including aircrafts, cheese and yogurt by 15% to 25%. –Li

Shares of Royal Caribbean and Norwegian Cruise Line dropped more than 4% during Wednesday’s premarket trading following a downgrade from Barclays. These stocks have been popular with retail investors, who’ve piled into the names at record pace and sent shares soaring nearly 30% in the last month. But Barclays said that cruise line companies face a “murky path” ahead.

CNBC PRO subscribers can read more here. —Stevens

Gold prices rose to their highest level in nearly eight years as a resurgence in coronavirus cases pushed investors into the safe haven. Spot gold prices climbed 0.5% to $1,774.53 per ounce, having earlier hit their highest since October 2012 at $1,779.06. U.S. gold futures gained 0.4% to $1,789.60. The U.S. reported upward of 31,000 new coroavirus cases on Monday, sending the nation’s seven-day average up more than 30% from a week ago, according data compiled by Johns Hopkins University. The precious metal is seen as a safe haven during time of economic uncertainty. –Fitzgerald

Shares of Dell have risen more than 14% in extended trading after the Wall Street Journal reported on Tuesday night that the tech company was considering options for its stake in VMware. Dell owns roughly 81% of the company, and is considering buying out the minority stake or selling its position, according to the report. Dell’s stake is worth about $50 billion. VMware shares rose more than 8% in premarket trading. —Pound

The U.S. added more than 31,000 new Covid-19 cases on Monday, sending the nation’s seven-day average up more than 30% from a week ago, according to a CNBC analysis of data compiled by Johns Hopkins University. Texas, Arizona and California are among the states that have seen a dramatic increase in cases over the past few weeks as they started reopening their economies. California saw a massive jump in its daily report of positive cases on Monday, adding 6,219 new cases, while 3,110 people are currently hospitalized in Texas based on a seven-day moving average, a 43% increase compared with a week ago, according to Covid Tracking Project data. –Li, Jasmine Kim

U.S. stock futures were under pressure Wednesday as investors grew concerned about the rising number of coronavirus cases. Dow Jones Industrial Average futures traded more than 200 points lower, or 0.9%. S&P 500 futures slid 0.8% while Nasdaq-100 futures were off by 0.5%. Those losses put the tech-heavy Nasdaq — which notched a record high on Tuesday — on track to post its first loss in nine sessions. —Imbert

–With reporting from Jeff Cox, Michael Bloom, Maggie Fitzgerald, Thomas Franck, William Feuer, Jasmine Kim and Pippa Stevens.

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