Stocks dropped on Thursday as fears over a possible second wave of coronavirus cases sent the major averages lower. The Dow plunged more than 1,500 points at its session low, registering a loss of 5.7%. The S&P 500 dropped more than 4.8%. Stocks most exposed to the economy’s reopening, such as retailers and cruise line operators, dragged markets lower. Stay-at-home plays were the one bright spot, with Netflix, Peloton and Zoom Video all in the green.
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1:50 pm: ‘Buy the dip,’ says New Constructs CEO
David Trainer, CEO of research firm New Constructs, said Thursday’s sell-off is an opportunity for investors to add names that have been unfairly hit. “It’s time to buy the dip,” he said. “Now is the chance to pick up stocks at a discount. Many investors missed the melt up in stocks over the past few weeks. The market is fairly valued, in my opinion, so large pullbacks create opportunity for value investors,” he added. Trainer said that while the market could be choppy going forward, he’s not expecting a repeat of the “panic-driven selloff of March.” – Stevens
1:30 pm: CFRA’s Stovall says sell off has further to go
CFRA’s Sam Stovall said it appears market sell off has further to go to the downside. “It could end up shaving 5% to 10 % off the June 8 peak,” said Stovall, chief investment strategist. The S&P hit a high of 3,233 that day. “We’ve been overbought for awhile and digesting gains would be natural,” he added. — Domm
1:28 pm: S&P 500 retesting 200-day moving average a possibility, trader says
Dan Deming, managing director at KKM Financial, said the S&P 500 could fall back to its 200-day moving average of 3,013 as concerns over the economy and the coronavirus persist. “A retest of the 200-day moving average is certainly a possibility. We’re not too far away from that,” he said. “That would probably be the first line in the sand as far if this is something a little bit more meaningful or is it the market just finding some equilibrium.” The S&P 500 closed back above its 200-day moving average on May 27 after the coronavirus-induced sell-off. —Imbert
1:10 pm: Tom Essaye, founder of the Sevens Report, on what triggered the sell-off
“Fed chair Powell yesterday really reminded investors that there’s a huge, huge gap between the economic reality and the market reality. Just that reminder combined with a lot of the second wave headlines prompted an opportunity to take profits. A lot of weak hands bought the market at the very end of this rally anyway, so you are just seeing that tumble out now. The headlines about a potential second wave are the main cause but we were due anyway for a pullback. Stocks can’t go up forever,” Essaye told CNBC. —Li
12:42 pm: Here are the biggest movers in midday trading
Rough starts from energy stocks, travel stocks and banks drove the market sharply lower on Thursday morning. Here are some of the companies making headline moves:
Citigroup, Wells Fargo, JPMorgan — Bank stocks fell on Thursday as Treasury yields dipped and investors digested forecasts from the Federal Reserve. Shares of Citigroup fell 7.2%, while Wells Fargo dropped 6.9%.
United, American, Delta, Southwest — Airline stocks cratered on Thursday as investors shed riskier reopening plays on concerns about a second wave. United and American Airlines dropped more than 10%.
Read more movers here. —Pound
12:40 pm: Market tends to fall further after morning sell-off, Bespoke says
The S&P 500 had historically tended to fall in afternoon trading when it is down at least 2% at midday, according to a note from Bespoke Investment Group. That pattern held regardless of whether stocks were considered overbought, oversold or in-between as of the previous close, the note said, and stocks tend to end the day at the lows of the session. The index was down more than 4% as of 12:30 ET. —Pound
12:35 pm: NYSE decliners lead advancers 33-1
A whopping 33 stocks traded lower for every advancer at the New York Stock Exchange as the market sold off on concerns over a potential resurgence in coronavirus cases. Overall, just 85 NYSE-listed names traded higher while 2,861 declined. —Imbert
12:17 pm: Dow on pace for biggest daily drop since March
The sell-off accelerated in midday trading with the Dow tumbling about 1,300 points, or 4.9%, at its session low, on pace for its worst one-day decline since March 18 when it lost 6.30%. The S&P 500 dropped 4.08%, on track for its worst daily performance since April 1 when the equity benchmark dropped 4.41%. –Li
12:10 pm: Trump calls Fed out for being ‘wrong so often’
President Donald Trump went back on the attack against the Fed, tweeting Thursday that the central bank is “wrong so often” on its economic forecasts. The Fed on Wednesday predicted a 6.5% drop in GDP for 2020 followed by a 5% in gain in 2021. Ironically, the central bank’s outlook for the year ahead is consistent with an assertion in Trump’s tweet that the year will be “one of our best ever.” Trump has laid off the Fed in recent months following sharp interest rate cuts and aggressive rescue programs. – Cox
11:50 am: Markets at midday: Dow headed for worst day since April
The Dow was on pace to post its biggest one-day loss since April 1 as traders grew more concerned of a resurgence in new coronavirus cases. The 30-stock Dow traded more than 1,100 points down, or 4.3%. The S&P 500 was down 3.6% and was headed for its longest losing streak since March. The Nasdaq Composite pulled back 2.8%. —Imbert
11:01 am: Market run had been ‘out of sync with everything,’ Cramer says
CNBC’s Jim Cramer said the market’s run higher in recent weeks wasn’t taking into consideration conditions on the ground in the U.S. “There’s just been a happiness trade that has been out of sync with everything, whether it be hot spots in Arizona, or whether it be unemployment, or whether it be the higher price of food,” Cramer said on “Squawk on the Street.” Cramer said investors need to closely watch the progression of Covid-19 cases, but cautioned against panicking over today’s market drop. “I think you just kind of have to let it come down and see whether there’s anything left of the day traders after they have their margin calls,” he said. — Kevin Stankiewicz
10:56 am: Stocks accelerate losses, Dow drops 1,000 points
U.S. equities hit their session lows around 11:00 am ET, as investors grew more worried about a second wave. The Dow Jones Industrial Average fell more than 1,000 points. The S&P 500 and Nasdaq fell 3.1% and 2.17%, respectively. — Fitzgerald
10:55 am: Oil prices dip on inventory build, fears over possible second wave of coronavirus cases
Oil prices were sharply lower on Thursday, pressured by a build in U.S. inventory, as well as by fears over a second wave of coronavirus cases. West Texas Intermediate crude futures dropped 7.45%, or $2.97, to trade at $36.63 per barrel, while international benchmark Brent crude traded 6.7% lower at $38.94. Data from the U.S. Energy Information Administration released Wednesday showed that for the week ending June 5, inventory rose by 5.7 million barrels to a record high of 538.1 million barrels. – Stevens
10:45 am: Barclays hikes 12-month S&P 500 price target, but remains cautious on the market
Barclays strategist Maneesh Deshpande hiked his S&P 500 price target to 2,800 from 2,500 citing “unprecedented stimulus” from the Federal Reserve. However, Deshpande’s new target is still about 10% below where the S&P 500 was trading at on Thursday. “We continue to believe that consensus expectations for a V-shaped recovery are too optimistic given that we believe that US GDP is unlikely to rebound to 2019 levels by 2021,” Deshpande wrote in a note to clients. He also noted that the “medical situation remains fluid.” —Imbert
10:43 am: Treasury Secretary Mnuchin: ‘We can’t shut down the economy again’
Treasury Secretary Steven Mnuchin told “Squawk on the Street” Thursday that it would be too costly to shut down the American economy again to try to slow the spread of Covid-19 despite reports of higher hospitalizations in recent days. “We can’t shut down the economy again. I think we’ve learned that if you shut down the economy, you’re going to create more damage,” Mnuchin said in an interview with CNBC’s Jim Cramer. His comments came as Wall Street punished stocks on Thursday amid growing fears that a second wave of coronavirus cases in the United States could force governors to re-institute business closures. — Franck
10:30 am: Stay-at-home trade back in vogue as concerns of a second virus wave rise
The so-called stay-at-home trade bucked the broader market’s overall negative trend on Thursday amid growing concerns of a potential second wave of new coronavirus cases. Netflix and Amazon were up 2.2% and 0.6%, respectively, clawing back earlier losses. Zoom Video shares jumped more than 4%. —Imbert
10:27 am: Banks fall on second wave fears, yields drop
Shares of national and regional banks dropped on Thursday as investors worried about a second waveand its economic ramifications. Bond yields also ticked lower, which pressures banks’ net interest margins. Shares of the SPDR S&P Bank ETF (KBE) fell about 5%. JPMorgan and Bank of America both lost more than 4% while Wells Fargo and Citi Group dropped 5% apiece. The SPDR S&P Regional Bank ETF (KRE) also fell. — Fitzgerald
9:55 am: Bankruptcy stocks volatile in early trading
Shares of Hertz, which has filed for bankruptcy, have moved wildly in the opening minutes of trading and currently down roughly 19%. Trading of Chesapeake, which has reportedly been considering bankruptcy, was briefly halted for volatility after the stock rapidly cut its losses following the opening bell. The beleaguered energy stock was down 4.4% when trading was halted. —Pound
9:53 am: Here are Thursday’s biggest analyst calls of the day: Apple, Starbucks, Uber & more
- Bank of America raised its price target on Apple to $390 from $340.
- HSBC upgraded Apple to hold from reduce.
- KeyBanc downgraded Starbucks to sector weight from overweight.
- Bernstein downgraded Campbell Soup, General Mills, and J.M. Smucker to underperform from market perform.
- Jefferies upgraded Keurig Dr Pepper to buy from hold and added Procter & Gamble to the franchise list.
- BTIG initiated Uber and Lyft as buy.
- Wells Fargo raised its price target on Apple to $385 from $315.
- Oppenheimer initiated DraftKings as outperform.
- JPMorgan upgraded PulteGroup to overweight from neutral and downgraded DR Horton to neutral from overweight
Pro Subscribers read more here. —Bloom
9:50 am: Airlines and cruise operators drop
Investors shed riskier reopening plays on Thursday as concerns grew about a second wave of the deadly coroanvirus. Airlines and cruise operators are some of the most punished sectors. Delta and American Airlines dropped more than 8%. United Airlines and Alaska Air Group fell more than 9%. Southwest ticked 6% lower. Shares of cruise line Carnival fell 8% and Norwegian fell nearly 9%. Royal Caribbean Cruises dropped more than 6%. — Fitzgerald
9:45 am: Retailers drop as investors flee reopening names
Retail stocks moved lower amid a broader market sell-off as fears of a second wave of coronavirus cases took hold. Investors shed stocks most exposed to the reopening theme, sending the SPDR S&P Retail ETF, which tracks the sector, lower. L Brands, Gap, Kohl’s, Nordstrom and Foot Locker all shed more than 8%. TJX Companies and Walgreens each traded more than 3% lower, while Target was down about 1%. – Stevens
9:30 am: Dow drops more than 850 points at the open, S&P 500 down 2.6%
The Dow Jones Industrial Average fell more than 800 points immediately after the opening bell Thursday morning as investors continued to grow more gloomy about the economic outlook and upticks in Covid-19 cases amid the U.S. reopening efforts. The S&P 500 traded down 2.6% and the Nasdaq Composite fell 2%. — Franck
9:15 am: Jobless claims fall for 10th straight week, but still high
Last week 1.54 million Americans filed for unemployment insurance, which marked the tenth straight week of a slowdown in new filers. By historical standards, however, the number remains high. Continuing claims, or those collecting benefits for at least two weeks, declined to 20.9 million, compared with the crisis peak of 24.9 million during the week of May 9. The report comes a week after the Bureau of Labor Statistics said that nonfarm payrolls increased by 2.5 million in May, though reporting errors have cast some doubt about how aggressive the recovery has been so far. Since the pandemic began, more than 44 million workers have filed claims. — Cox
8:30 am: Fewer-than-expected jobless claims
U.S. weekly jobless claims totaled 1.542 million last week. First-time claims for unemployment insurance were expected to total 1.6 million last week, according to economists surveyed by Dow Jones. Continuing claims, a broader look at the total unemployed, decreased by 339,000 to 20.9 million. – Cox
8:27 am: 10-year Treasury yield back to where it was before jobs numbers started to surprise
Buyers are jumping into Treasurys as stocks sell off on a gloomy Fed outlook and fears of growing virus cases in some parts of America. The 10-year yield, at 0.69%, is back where it was before ADP’s surprise job gains last Wednesday. Yields move opposite to price. After the government’s jobs report Friday showed a gain of 2.5 million jobs, the yield ran all the way up to 0.956%. Traders say the market was reacting to the Fed’s announcement that it was going to keep a large quantitative easing program going for the foreseeable future. The Fed said it would continue buying at least the $80 billion a month in Treasurys it is now buying for the foreseeable future. That coupled with the Fed’s outlook for a long recovery set a sour tone. The market had also been building in a steepening trade, meaning a wider spread between short end and long end yields. The so-called steepening trade was on better jobs data but also because of market expectations that the Fed would announce a program to control the yield curve with targeted rates. It did not announce that program Wednesday, but Fed Chairman Jerome Powell said it was under consideration. – Domm
8:01 am: Frothy stocks falling again
The volatile and risky stocks that have made headline moves in recent days were down sharply in premarket trading. Shares of bankrupt rental car company Hertz dropped 25% after losing nearly 40% on Wednesday. Chesapeake Energy, which has been reportedly considering filing for bankruptcy protection, slid more than 12% after a 29% plunge during the prior session. Shares of newly public electric vehicle company Nikola sank more than 11%, on the heels of an 18.5% fall on Wednesday. — Pound
7:47 am: Target hikes dividend
Target said Thursday that it’s raising its dividend by 3% to 68 cents from 66 cents. The new annualized dividend yield will be 2.27%, compared with 2.2% previously. The company said in May that during the first quarter digital sales surged 141% as consumers shopped online during the Covid-19 lockdown, although sales of higher-margin items like apparel dropped. Shares of the big-box retailer were down roughly 1% during premarket trading. For the year, the stock is down 6%. – Stevens
7:24 am: Reopening plays fall in premarket trading
Companies expected to benefit from the economy reopening fell in premarket trading after data showed a spike in cases in states that started loosening restrictions. Airlines, cruise operators and brick and mortar retailers tumbled before the opening bell. Shares of American Airlines and Delta Air both dropped more than 12% in premarket trading. United Airlines fell 13%. Southwest and Alaska Air dropped 10% and 11%, respectively. Cruise ship company Carnival cratered nearly 12% and Norwegian and Royal Caribbean fell 14% and 13%, respectively. Physical retailers ticked lower as well with Michaels dropping 14% and Kohl’s and TJX Companies falling 9% and 3%, respectively. Nordstrom dropped 7% in premarket trading. The reopening trades have been leading the market higher recently but investors are now pivoting back to trusty technology darlings. — Fitzgerald
7:21 am: Fed sees sharp downturn this year, promises to keep aid coming
The Federal Reserve pointed to a protracted slowdown ahead and pledged to do what it can to help the economy recover from the coronavirus. While keeping short-term interest rates anchored near zero, the central bank also said Wednesday it will continue buying at least $120 billion of bonds a month. Fed officials estimate that GDP will fall 6.5% in 2020 then bounce back to a 5% gain next year and 3.5% in 2022. Chairman Jerome Powell said that the burden from the shutdown has impacted those at the bottom end of the economic spectrum, and the Fed will do what it can to help. Along with the bond purchases, the Fed has implemented a series of programs aimed at market functioning and lending to businesses in need. “We will continue to use those powers forcefully, actively and aggressively until we are convinced that we are solidly on the road to recovery,” Powell said. – Cox
7:14 am: U.S. coronavirus cases top 2 million
U.S. coronavirus cases have surpassed 2 million as states begin to reopen their economies, which has led to fears of a second wave of cases. Texas, which was among the first wave of states to ease lockdown restrictions, has reported three straight days of record-breaking hospitalization numbers. Across the U.S., cases have gradually been rising since Memorial Day weekend. Global cases now stand at more than 7.36 million. – Stevens
7:04 am: Latest read on the economy with jobless claims
Investors are looking to the release of the latest jobless claim numbers at 8:30 a.m. ET for a read on the state of the economy. Economists polled by Dow Jones are expecting 1.595 million claims, which would represent a slowdown in the number of new people filing. Data released last Thursday showed that 1.877 million people had filed claims in a sign that the worst is over for the coronavirus-related job crisis, although the number remains high by historical standards. Additionally, the number of continuing claims, which provides a clearer picture of how many Americans remain unemployed, continues to creep higher. Since March more than 42 million people have filed for unemployment insurance. – Stevens
6:44 am: Stock futures sharply lower
U.S. stock index futures pointed to a sell-off at the start of trading on Thursday as fears over a second wave of coronavirus cases sent the major averages tumbling. The Dow Jones Industrial Average was slated to open 560 points lower for a loss of 2%. The S&P 500 was poised to drop 1.7%, while the Nasdaq Composite was set to shed 1.4%. Stocks sensitive to the economy’s reopening, which have been sharply higher in recent sessions, led the premarket declines.
The S&P 500 is on track for its third straight day of losses and is once again negative for the year. Earlier in the week the benchmark index briefly turned positive for 2020 before the rally took a breather. Still, the S&P 500 is now just 6% below its February record high. Meanwhile the Nasdaq Composite hit a new all-time high during Wednesday’s session, and closed above 10,000 for the first time on record as Big Tech continues to outperform. – Stevens
– CNBC’s Jeff Cox and Patti Domm contributed reporting.
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