Stocks traded around flatline as investors tracked the latest coronavirus developments. Retailers like Gap and Nordstrom and mall-owner Simon Property Group were among the S&P 500′s top performers while financial stocks lagged.
This is a live blog. Here’s the latest.
11:10 am: Luckin Coffee fires CEO and COO, trading halted
Chinese coffee chain Luckin Coffee announced it has terminated Jenny Zhiya Qian and Jian Liu from the positions of Chief Executive Officer and Chief Operating Officer, respectively. The move came after an internal investigation found that its COO fabricated 2019 sales by about 2.2 billion yuan ($310 million). Trading was halted for Luckin shares, which have fallen nearly 90% this year. — Li
Grubhub shares rocketed 23% and were then halted for volatility after a report said ride-hailing company Uber Technologies has approached the company with a takeover bid. The Bloomberg News report of Uber’s bid comes months after other outlets reported that food-delivery service Grubhub had hired advisors to explore strategic options, including a possible sale. — Franck
10:39 am: This auto company is poised to outperform in the stay-at-home economy, analyst says
Wedbush upgraded CarMax to outperform on Tuesday morning and said the used-car retailer is “poised to capture market share” after the coronavirus pandemic. “KMX is very well positioned for this new environment with multiple purchase, delivery and contactless pickup options, whereas online-only competitors such as Carvana cannot address as wide a market,” the firm said. “With a quicker path to recovery, solid omnichannel capabilities, prospects for market share gains and attractive valuation, we recommend purchase of KMX.” Shares of the company are up 5% this month. — Bloom
10:28 am: Fauci begins testifying
Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, began testifying before the Senate Health Committee. Fauci’s testimony will be closely watched by Wall Street as investors gauge the potential for the economy to reopen in a timely manner. However, The New York Times had reported earlier that reopening too quickly by states will cause “needless suffering and death.” — Imbert
10:10 am: US grocery costs jump most in 46 years as meat and egg prices pop
Prices Americans paid for groceries leaped in April as people stocked up on milk, eggs, meat and cereals amid government lockdowns designed to slow the spread of Covid-19. The government said Tuesday that prices U.S. consumers saw at supermarkets rose 2.6% in April, the largest one-month pop since February 1974. The cost of the meats, fish and eggs category gained 4.3%, fruits and vegetables rose 1.5%, cereals and bakery products climbed 2.9% and dairy goods advanced 1.5%. — Franck
10 am: Here are Tuesday’s biggest analyst calls of the day: Electronic Arts, Alphabet, Chevron & more
- UBS downgraded Chevron to neutral from buy.
- Bank of America downgraded Stanley Black & Decker to neutral from buy.
- Citi raised its price target on Alphabet to $1,600 from $1,400.
- Stephens named Electronic Arts a best idea.
- JPMorgan named AbbVie a top idea.
- Stephens upgraded PNC to overweight from equal weight.
9:50 am: Retailers jump after Simon Property says half of its locations will reopen this week
Simon Property Group, the biggest U.S. mall owner, said it plans to have roughly 50% of its properties reopened within the next week, sending shares of retailers up in morning trading on Tuesday. Gap and Nordstrom both jumped more than 4%, while Macy’s rose 2.4%. Shares of Simon Property popped nearly 6%. The company closed all of its properties temporarily on March 18, and started reopening some of its malls on May 1 as states loosened their shutdown restrictions. CEO David Simon said on the earnings call that the company is “encouraged by the consumer response thus far.” — Li
9:40 am: Trump says oil market is ‘the BEST of all worlds’
President Donald Trump commented on the jump in oil prices Tuesday after Saudi Arabia said it would cut production by an additional one million barrels per day beginning in June. “Our great Energy Companies, with millions of JOBS, are starting to look very good again,” Trump said in a tweet. West Texas Intermediate, the U.S. benchmark, gained $1.39 to trade at $25.53 per barrel. “At the same time, gasoline prices at record lows (like a big Tax Cut). The BEST of all Worlds. ‘Transition To Greatness,’” Trump added. According to the latest data from AAA, the national average for a gallon of gas is $1.854, which represents a 35% year-over-year decline. — Stevens
Crude Oil prices going up as Saudi Arabia cuts production levels. Our great Energy Companies, with millions of JOBS, are starting to look very good again. At the same time, gasoline prices at record lows (like a big Tax Cut). The BEST of all Worlds. “Transition To Greatness”
9:30 am: Dow rises 100 points at the open
Stocks opened Tuesday’s session on a positive note, with the Dow Jones Industrial Average climbing 100 points. The S&P 500 rose 0.4% at the open, while the Nasdaq Composite traded up 0.5%. Investors continued to monitor actions to ease coronavirus lockdowns, while awaiting Dr. Anthony Fauci’s Senate hearing later this morning where he’s expected to warn against reopening the economy too soon. — Li
8:42: am: Consumer prices fall 0.8% in April, notch largest monthly drop since 2008
The Labor Department reported Tuesday that the prices U.S. consumers pay for everyday goods and services in April posted their largest one-month decline since the last recession. The prices Americans pay for things like haircuts, light bulbs, gasoline and groceries dropped 0.8% last month, the second consecutive month inflation has eased since Covid-19 reached the U.S. and the biggest single monthly decline since 2008. Excluding volatile food and energy components, the so-called core CPI fell 0.4%, the largest monthly drop on record dating back to 1957. — Franck
8:30 am: Casper Sleep tops revenue expectations, but falls short on profit
Shares of mattress-maker Casper Sleep jumped more than 6% during Tuesday’s premarket trading after the company beat revenue estimates for the first quarter, helped by an increase in e-commerce sales as retail locations closed. Earnings came up short, however, and the company lost $1.23 per share, larger than the 84-cent loss analysts had been expecting. The company was once a ‘unicorn’ — valued at more than $1 billion in the private market — but its time as a public company has been far less rosy. Casper went public in February after pricing at the low end of its IPO range and shares have dropped 45% since the stock’s opening trade of $14.50 on Feb. 6. It is now worth about $313 million. — Stevens
8:11 am: Citi ‘confident’ that gold prices will push higher by end of the year
Gold has paused its recent rally — the precious metal is coming off its fourth negative session in five — but Citi believes prices will move higher into the end of the year. “We are more confident about a fresh push higher in gold prices by late 2020, on the back of higher crude oil prices and perhaps an even more favorable rates environment,” the firm said in a note to clients Tuesday. Citi said that persistently low interest rates, as well as global currency debasement, are “buttressing investor buying activity.” The firm forecasts a “slow grind higher” for gold, but expects it to hold in the $1,600 to $1,700 per ounce range. “A global growth and EM recovery in 2021 could be what supports the next leg higher towards $2,000/oz,” the firm said. For the second quarter Citi sees gold averaging $1,710/oz. On Tuesday gold gained 0.6% to trade at $1,708/oz. — Stevens
7:53 am: Simon Property jumps after it says half its properties to reopen within a week
Simon Property Group, the largest U.S. mall owner, said Monday evening that it plans to reopen about half of its properties within the next week. Though it announced that its first-quarter profits fell 20.2%, investors snapped up the stock on hopes that relaxed state-imposed business closures would reinvigorate consumers and restart mall traffic. Shares were last seen up 8.5% in premarket trading at 7:50 a.m. ET. — Franck
7:48 am: Saudi Aramco hit hard by plunging oil prices, profit slides 25% in the first quarter
Saudi Aramco saw net income drop 25% in the first quarter as low oil prices hit the company’s bottom line. The state-owned oil giant reported income of 62.5 billion riyals ($16.6 billion) for the quarter, which was “primarily reflecting lower crude oil prices, as well as declining refining and chemicals margins and inventory re-measurement losses,” a statement said. The earnings release comes one day after the kingdom said it would cut production by an additional 1 million barrels per day beginning in June in an effort to prop up global oil prices. Aramco went public in December. — Stevens
7:44 am: The Fed is going to start buying corporate bonds and ETFs
The Federal Reserve is cranking up its corporate bond buying program, which will include companies whose debt was downgraded to junk primarily because of the coronavirus crisis. As corporate America issues record amounts of debt, the Fed will be scooping up both ETFs and, ultimately, individual bonds of companies that meet certain criteria. Debt issuance was up almost 70% year to date through April and multiple companies have priced significant offerings in the early part of May as well. – Cox
7:31 am: Hyatt Hotels to lay off 1,300 workers as virus hamstrings global travel
Hyatt Hotels announced late Monday that it would lay off 1,300 workers around the globe starting June 1 as it struggles to cope with the Covid-19 crisis that’s halted travel. Hyatt also said it’s cut pay for senior management, board members and all employees as part of a broader restricting. The company said all employees who are laid off would be eligible for severance pay. “Due to the historic drop in travel demand and the expected slow pace of recovery, Hyatt has made the extremely difficult decision to implement layoffs,” Hyatt said in a statement. — Franck
7:28 am: Boeing expects airline passenger traffic under 25% in September
Boeing Chief Executive Dave Calhoun told NBC he believes one major U.S. airline will file for bankruptcy protection before the end of 2020. “Yes, mostly likely. You know, something will happen when September comes around,” Calhoun said in an interview with NBC’s “Today” scheduled for release Tuesday. Calhoun said he doesn’t expect passenger traffic to reach even 25% of its prior levels by September. — Franck
7:26 am: Dr. Fauci set to testify before Senate where he will reportedly warn of the danger of reopening too soon
On Tuesday Dr. Anthony Fauci will testify before the Senate, and he reportedly plans to warn about the dangers of reopening economies too soon, according to The New York Times. “If we skip over the checkpoints in the guidelines to: ‘Open America Again,’ then we risk the danger of multiple outbreaks throughout the country,” Fauci wrote in an email to the Times. “This will not only result in needless suffering and death, but would actually set us back on our quest to return to normal,” he added. The hearing will begin at 10 a.m. ET. — Stevens
7:22 am: Citi raises Alphabet’s target price to $1,600 per share
Citi raised its price target on Google-parent Alphabet to $1,600 per share from $1,400 per share on Monday evening. This implies a 13% rally in the next 12 months from Alphabet Monday’s closing price of $1,403.59 per share. Citi said it raised its 2021 free cash flow estimate to $64 per share and continues to apply a 25x forward cash flow multiple. “We are updating our model to reflect 1Q20 results and latest post COVID outlook,” Citi anlayst Jason Bazinet said in a note to clients. “We now model 5% year-on-year growth in 2020, with full-year revenue reaching $169.6 billion, and we expect 20% year-on-year rebound in 2021, with full-year revenue reaching $203.4 billion.” Shares of Alphabet were flat in premarket trading on Tuesday. — Fitzgerald
7:18 am: US stock futures rise slightly after Nasdaq’s 6-day winning streak
U.S. stock futures traded slightly higher on Tuesday as Wall Street stayed focused on the economy reopening. Dow Jones Industrial Average futures gained 89 points, or 0.4%. S&P 500 and Nasdaq 100 futures were up by 0.3% each. Those gains come after the tech-heavy Nasdaq Composite notched its sixth straight advance on Monday. That’s the average’s longest winning streak since December. The Nasdaq entered Tuesday’s session up more than 2% for 2020. At one point, the index had fallen more than 25% year to date. Investors will turn their eyes to Washington as Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, gets set to discuss the economic reopening, among other issues concerning the coronavirus. — Imbert
—With reporting from CNBC’s Fred Imbert, Yun Li, Michael Bloom and Jeff Cox.
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