Stocks were under pressure Tuesday coming off a three-day weekend in the U.S., with concerns over a potentially deadly virus outbreak in China knocking global markets.
With a light line-up of corporate earnings results and economic data on the schedule for the session, attention instead turned to the World Economic Forum in Davos, Switzerland, and the start of President Donald Trump’s impeachment trial in the U.S. Senate.
4:15 p.m. ET: IBM, Netflix top Q4 expectations
The old-line technology giant saw its cloud revenue jump 21% to $6.8 billion in the fourth quarter, amid CEO Ginny Rometty’s focus on the high-margin business and away from IBM’s traditional stalwarts. The stock finished the session up modestly around $139.17.
4:07 p.m. ET: Stocks end lower
Here’s where the major indices had settled as of 4:07 p.m. ET:
S&P 500 (^GSPC): -0.27% or -8.83 points to 3,320.79
Dow (^DJI): -0.52% or -152.06 points to 29,196.04
Nasdaq (^IXIC): -0.19% or -18.14 points to 9,370.81
Crude oil (CL=F): -0.50% or -0.29 to 58.25 a barrel
Gold (GC=F): -0.13% or -2.10 to 1,558.20 per ounce
2:44 p.m. ET: Stocks hold lower after CDC announces U.S. case of potentially deadly coronavirus
Stocks held lower Tuesday afternoon after the CDC’s confirmation of a U.S. case of the Wuhan coronavirus jolted global markets.
Here were the main moves in markets, as of 2:44 p.m. ET:
S&P 500 (^GSPC): -0.26% or -8.69 points to 3,320.93
Dow (^DJI): -0.6% or -174.81 points to 29,173.29
Nasdaq (^IXIC): -0.28% or -26.23 points to 9,362.85
Crude oil (CL=F): -0.5% or -$0.29 to $58.25 a barrel
Gold (GC=F): -0.14% or -$2.20 to $1,558.10 per ounce
2:21 p.m. ET: CDC announces first U.S. case of Wuhan coronavirus in Washington state
The Center for Disease Control and Prevention (CDC) on Tuesday announced its first confirmed U.S. case of the coronavirus that killed at least six people in China.
A male traveler from China was diagnosed with the coronavirus in Washington State, according to the CDC. The illness has sickened hundreds so far in China, and the U.S. began screening for the virus at airports in New York, San Francisco and Los Angeles on Friday.
1:48 p.m. ET: Boeing swoons to 52-week low on expected delays
Shares of Boeing (BA) hit a 52-week low of $310.81 Tuesday according to Yahoo Finance data. The dip followed a CNBC report that Boeing pushed back its expectation for when federal regulators will sign off on the 737 Max 8 to June 2020 at the soonest.
12:15 p.m. ET: Worried about the new virus? Don’t, says Wall Street firm
A new virus originating in China has sent anxiety rippling across global markets, and weighed on Tuesday’s trading. Yet Capital Economics says the history suggests those fears “rarely have a long-lasting and widespread effects on equities:”
Admittedly, the most obvious comparator to the latest outbreak is the 2003 SARS epidemic, which did have a clear economic and financial market impact. This Update on our Emerging Asia service describes the economic fallout of that event in the region in detail – in short, travel and tourism spending in particular was initially hit hard. And in the weeks after the Chinese authorities eventually went public about the spread of the disease and informed the World Health Organisation, MSCI’s index of China’s equities fell by more than 10%.
12:06 p.m. ET: Guess who’s coming to dinner in Davos?
Reuters reports that President Donald Trump, fresh off the dais at Davos where he took a victory lap for the U.S. economy’s strength, will dine with Apple’s Tim Cook and other CEOs. Daughter and presidential adviser Ivanka Trump organized the confab.
11:41 a.m. ET: Stocks mixed as session rolls on
Stocks were mixed during the intraday session, with the S&P 500 hovering near unchanged. The Dow pared losses of as many as 112 points from the lows of the session.
Here were the main moves in markets, as of 11:42 a.m. ET:
S&P 500 (^GSPC): -0.06% or -1.92 points to 3,327.7
Dow (^DJI): -0.1% or -30.35 points to 29,317.75
Nasdaq (^IXIC): +0.07% or +6.27 points to 9,395.02
Crude oil (CL=F): -0.48% or -$0.28 to $58.26 a barrel
Gold (GC=F): -0.23% or -$3.60 to $1,549.70 per ounce
11:28 a.m. ET: Beyond Meat spikes on Starbucks climate plan
Starbucks’ (SBUX) decision to pursue sustainable business alternatives — including plant-based options on its menu — has created a halo effect for Beyond Meat (BYND). The fake-meat company is spiking by over 11% in mid-morning trading, as investors bet on the coffee giant becoming the latest company to offer its product.
9:32 a.m. ET: Stocks edge down slightly around market open
Stocks opened slightly lower, coming off Friday’s record highs.
Here were the main moves in markets, as of 9:34 a.m. ET:
S&P 500 (^GSPC): -0.2% or -6.67 points to 3,322.94
Dow (^DJI): -0.08% or -23.52 points to 29,324.58
Nasdaq (^IXIC): -0.25% or -22.84 points to 9,365.41
Crude oil (CL=F): -0.6% or -$0.35 to $58.19 a barrel
Gold (GC=F): -0.7% or -$11.00 to $1,549.30 per ounce
8:22 a.m. ET: Credit Suisse raises S&P 500 year-end target to 3,600
Credit Suisse analyst Jonathan Golub raised his 2020 price target for the S&P 500 to 3,600 from 3,425 previously, suggesting about 8% upside from levels as of Friday’s close.
The call is based on an S&P 500 earnings per share estimate of $175, representing 6.2% growth over last year and accelerating after a sluggish 1% rise in 2019. He expects EPS will rise to $184 in 2021.
Three main factors inform Golub’s new price target: First, he believes the domestic economy will firm further in the first half of the year, bringing both bond yields and equity prices higher. Second, he said the headwinds facing energy and big tech stocks in 2019 will reverse this year amid an improving economic backdrop, driving earnings growth for cyclical stocks. And third, multiples could have more room to expand.
“With multiples at 18.7x – versus a 50-year average of 14.4x – investors are reluctant to project higher PEs despite an abundant return of capital to shareholders (div + buyback yield = 4.1%), and depressed volatility, rates and spreads. By contrast, P/FCF (price to free cash flow) is roughly in line with long-term averages,” Golub said. “Our work indicates that stocks are undervalued on a discounted cash flow basis, and should grind higher.”
8:02 a.m. ET: Uber-bearish investor loses bitcoin stash
Peter Schiff, a noted cryptocurrency skeptic who’s relentlessly bearish on Fiat currencies — and a fierce critic of Fed policy — said over the weekend that he’d lost access to his bitcoin stash. Apparently his digital wallet stopped accepting his password:
I just lost all the #Bitcoin I have ever owned. My wallet got corrupted somehow and my password is no longer valid. So now not only is my Bitcoin intrinsically worthless; it has no market value either. I knew owning Bitcoin was a bad idea, I just never realized it was this bad! pic.twitter.com/6SJvDJOZU6
— Peter Schiff (@PeterSchiff) January 19, 2020
Schiff has promoted bullion for years, but was one of a handful of gold bugs willing to publicly denounce bitcoin (BTC).
7:59 a.m. ET: World Economic Forum under way
The 50th annual World Economic Forum continues Tuesday through the end of the week, bringing together some of the world’s most powerful leaders in Davis, Switzerland.
President Donald Trump delivered a speech at 9 a.m. local time, touting the strength of the U.S. economy and his administration’s phase one trade agreement with China signed last week.
“I told you we had launched the ‘Great American comeback.’ Today, I’m proud to declare the United States is in the midst of a great economic boom, the likes of which the world has never seen before,” Trump told the audience at the World Economic Forum.
7:45 a.m. ET: Stock futures edge down slightly
Stocks paced toward their first down day in four sessions, with contracts on each of the three major indices slightly in the red in early trading. On Friday, stocks had closed at record highs.
Here were the main moves during the pre-market session, as of 7:45 a.m. ET:
S&P futures (ES=F): 3,315.25, down 9.75 points or 0.29%
Dow futures (YM=F): 29,231, down 48 points or 0.16%
Nasdaq futures (NQ=F): 9,140.00, down 34.5 points or 0.38%
Crude oil (CL=F): $57.74 per barrel, down $0.80 or 1.37%
Gold (GC=F): $1,557.60 per ounce, down $2.70 or 0.17%