Stock market live updates: Dow drops 700, reopening trades plunge, Hertz falls 21%

A trader walks in front of the New York Stock Exchange on May 26, 2020 at Wall Street in New York City.

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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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