Stock market live Friday: Dow drops 700, TX reverses reopen, Gap jumps 19% on Kanye collab

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• The Dow fell 730 points, or 2.84%
• The Dow fell 3.31% for the week, its second negative week in three
• The Dow is down 1.45% month to date, on pace to break a two-month win streak
• The S&P 500 fell 75 points, or 2.42%, its second negative session in three
• The S&P 500 fell 2.86% for the week, its second negative week in three
• The S&P 500 is down 1.16% month to date, on pace to break a two-month win streak
• The Nasdaq Composite fell 260 points, or 2.59%
• The Nasdaq fell 1.90% for the week, its second negative week in three
• The Nasdaq is up 2.82% this month, on pace for its third positive month in a row
• All 11 S&P sectors were negative in Friday’s session, led to the downside by communication services, down 4.49%. Utilities was the best performer, down 1.03%
• All 11 Sectors were negative for the week, led to the downside by energy, down 6.44%. Tech was the best performer, down 0.45%. –Hayes

The major U.S. indexes all sank on Friday to lock in losses for the week. The Dow lost 730 points, or 2.8%, while the S&P 500 and Nasdaq lost 2.6% and 2.4%, respectively. –Pound

With roughly one hour left of trading, the major averages were on pace to post solid losses as traders worried the latest surge in coronavirus cases would halt the reopening of the economy. The Dow was down more than 600 points, or 2.6%. The S&P 500 traded 2.1% lower along with the Nasdaq Composite. –Imbert

Stocks extended their losses on Friday afternoon, with the Dow briefly falling more than 700 points for the session. The 30-stock average last traded down 670 points, or 2.6%, while the S&P 500 and Nasdaq were both down about 2%. —Pound

CNBC’s Senior Markets Commentator Mike Santoli questioned whether markets are returning to ‘fretful Fridays,’ like they did in February and March. Investors would commonly sell on Friday’s assuming more risk of ugly virus headlines over the weekend, said Santoli.

Check out more of Santoli’s market notes here. -Fitzgerald

About five stocks declined for every advancer at the New York Stock Exchange as the market faced pressure from surging coronavirus cases. FactSet data shows 2,381 NYSE-listed names were lower, while just 487 traded higher. —Imbert

Consumer goods giant Unilever said Friday they would suspend all advertising on Twitter and Facebook, citing hate speech and polarizing U.S. politics. The news sent Facebook and Twitter shares down by more than 7%. Unilever is not the only company halting its Facebook ads. On Thursday, Verizon said it would do the same. —Imbert

In the midst of a massive spike in coronavirus cases, Florida announced it would suspend “on premises consumption” of alcohol at bars in the state. The news comes after Texas said earlier it will roll back some of its reopening measures as coronavirus infections have also surged there. —Imbert

The major averages were sharply lower around midday as the number of coronavirus cases continues to rise across the U.S. The Dow slid more than 500 points, or 2.1%. The S&P 500 and Nasdaq Composite were both down more than 1%. Friday’s declines put the three averages on pace for weekly losses. —Imbert

Chinese officials have reportedly indicated that U.S. involvement in Hong Kong and Taiwan matters could impact purchases of farm goods as outlined by “phase one” of the trade deal, according to The Wall Street Journal. Citing people familiar with the matter, the report said that China remains committed to the trade deal, but officials believe that both sides need to continue to “work together” with the U.S. not “meddling” in the country’s dealings with China and Taiwan. On Thursday the U.S. Senate passed legislation imposing sanctions on those who back efforts to restrict Hong Kong’s autonomy. – Stevens

Shares of Bed Bath & Beyond jumped 8% on Friday after Bank of America said Buybuy Baby’s enterprise value could be equal to nearly all the current enterprise value of Bed Bath & Beyond. “While there are several significant earnings opportunities for the core Bed & Bath Beyond business under strong management, we believe one of the most underappreciated assets of BBBY is its buybuy Baby banner,” Bank of America research analyst Curtis Nagle said in a note to clients titled “don’t throw this Baby out with the bath water.” Bed Bath & Beyond doesn’t disclose the baby retailer’s metrics but the firm estimates Buybuy Baby is generating at least $1.2 billion in sales, well above the company average. Bank of America — which has a buy rating on Bed Bath & Beyond — hiked its price target to $14.50 per share from $12.50 per share.

CNBC PRO subscribers can read more here. -Fitzgerald

Stocks tumbled to their lows of the day around mid-morning, with the Dow sliding more than 600 points, after Texas Gov. Greg Abbott said the state would roll back some reopening measures. “At this time, it is clear that the rise in cases is largely driven by certain types of activities, including Texans congregating in bars,” Abbott said in a release. Friday’s steep losses put the Dow and S&P 500 down more than 2% each for the week. –Imbert

Shares of Wells Fargo and Capital One tumbled after Morgan Stanley analyst Betsy Graseck said they may be forced to cut their dividends after the Federal Reserve stress test introduced a new rule governing the quarterly payouts.

The Fed released the results of its annual bank exam Thursday, revealing a new formula for dividend payouts that dictates that a lender’s dividend cannot exceed its average net income from the previous four quarters.

Based on Graseck’s estimates for second-quarter earnings, that means Wells Fargo would need to cut its third-quarter dividend to $0.36 from $0.51, and Capital One would have to slash it to zero, from its current $0.40, the bank analyst wrote Friday in a research report. Shares of Wells Fargo tumbled 4.4% shortly after the open of trading in New York, while Capital One fell 3.5%.

CNBC PRO subscribers can read more here. –Son

Shares of companies most sensitive to the economy’s reopening, including airlines and cruise lines, moved lower on Friday as Covid-19 cases continue to rise in the U.S. Royal Caribbean and Norwegian Cruise Line fell around 3% each, while Carnival Corporation slid 1%. United Airlines dropped more than 5%, while Delta and American were down 3% and 4%, respectively. Casino names also took a hit, with Las Vegas Sands and MGM tumbling more than 2%. – Stevens

Shares of Virgin Galactic opened up as much as 5.6% in trading before slipping, after the space tourism company successfully completed its second glide flight test in New Mexico on Thursday. Virgin Galactic said that, after completing “an extensive data review” of the glide flight, it will begin preparing for full rocket-powered test flights. – Sheetz

Texas Gov. Greg Abbott announced Friday morning that the state is reinstating restrictions on some businesses after the spread of the coronavirus accelerated recently in the state. Under the new rules, bars are closed to in-person customers, while restaurants cannot exceed 50% capacity starting on Monday. Additionally, rafting and tubing businesses must close and local governments must approve outdoor gatherings of more than 100 people. –Pound

The major averages moved lower at the opening bell as bank stocks weighed on the broader market. The Dow dropped 186 points for a loss of 7%. The S&P 500 and Nasdaq Composite were down 0.45% and 0.24%, respectively. The Dow and S&P are on track to end the week lower, while the Nasdaq is set to eke out a small gain. – Stevens

• SunTrust raised its price target on Amazon to $3,400 from $2,700.
• Deutsche Bank upgraded eBay to buy from hold.
• Bernstein downgraded Boeing to market perform from outperform.
• Rosenblatt initiated DraftKings as buy.
• Wells Fargo raised its price target on Snap to $28 from $20.
• Evercore ISI named Qualcomm a top pick.
• Deutsche Bank raised its price target on Amazon to $3,333 from $2,750.

CNBC PRO Subscribers read more here. – Bloom

Shares of Gap surged more than 15% in premarket trading after the company announced a partnership with musician Kanye West. West tweeted out a promotional photo that had “developed by Yeezy and Gap” written on a bag. He also tweeted about the partnership using the hashtag #WestDayEver. The Yeezy-Gap line will be aimed at young shoppers, according to Reuters. –Pound

Bernstein downgraded shares of Boeing to market perform on Friday based on a lower delivery outlook over the long-term. The firm pointed to uncertainty around when the 737 Max will return to the sky, as well as questions around what the company’s production ramp will look like once operations resume. “To reflect this uncertainty around the demand environment and return timeline, we have reduced our 2020 deliveries forecast from 80 to 40, and assumed a slower delivery and production ramp in 2021 and beyond,” the firm said. Bernstein also cut its full-year 2020 to 2024 free cash flow estimates for the company by around $9.5 billion. Shares of Boeing slid 1% during premarket trading. For the year, the stock is down 46%. – Stevens

On Thursday the Federal Reserve imposed new restrictions on U.S. banks after its annual stress test found that several banks could get uncomfortably close to minimum capital levels in scenarios tied to the coronavirus pandemic. The Fed said in a release that big banks will be required to suspend share buybacks and cap dividend payments at their current level for the third quarter of this year. The regulator also said that it would only allow dividends to be paid based on a formula tied to a bank’s recent earnings. Shares of Wells Fargo slid more than 2% during premarket trading, while JPMorgan and Bank of America were each down more than 1%. Goldman Sachs was more than 3% lower. – Son, Stevens

Shares of Nike slid more than 3% during premarket trading after the company reported a surprise loss for the fourth quarter as sales fell 38% year-over-year. Street analysts had expected the sportswear maker to report a profit of 7 cents per share, but the company instead lost 51 cents per share. By comparison, in the fourth quarter of 2019 the company earned 62 cents per share. Revenue also came up short as stores were forced to close amid the pandemic. Digital sales did jump 75%, but expenses for shipping and returns cut into margins. – Stevens

U.S. stock index futures pointed to a mixed open for the major averages on the final trading day of a volatile week. The Dow Jones Industrial Average was set to shed 40 points at the open, while the S&P 500 and Nasdaq-100 were set to rise 0.1% and 0.2%, respectively. Bank stocks weighed on the market after the Federal Reserve imposed restrictions on bank dividends following its annual stress test. During Thursday’s session the sector had rallied after the Federal Deposit Insurance Commission officials said they were loosening some restrictions on the Volcker Rule.

Elsewhere in the market, stocks most sensitive to the economy’s reopening, including airlines and cruise lines, moved higher, despite Texas and Florida pausing their reopening efforts as the number of Covid-19 cases in the states jump.

For the week, the S&P and Dow are slated to register their second weekly loss in three weeks, while the Nasdaq Composite is on track to end the week higher. – Stevens

– With reporting from CNBC’s Hugh Son, Michael Sheetz, Maggie Fitzgerald and Michael Bloom.

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