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Stocks - Wall Street Heads Lower Midday, Coming to Terms With Dour Data

Published 04/15/2020, 09:21 AM
Updated 04/15/2020, 11:50 AM
© Reuters.

By Geoffrey Smith  

Investing.com -- U.S. stocks extended their losses midday Wednesday as grim economic data and earnings finally overshadowed Federal Reserve dollars and underscored how much repair the global economy will need when it restarts.

By 11:45 AM ET (1545 GMT), all three major indices were extending earlier losses. The Dow Jones Industrial Average was down 660 points, or 2.75%. The S&P 500 was down 2.9% and the Nasdaq Composite was down 2%. They had posted rises of between 2.4% and 4.0% on Tuesday, all hitting their highest levels in over a month.

The market was brought down to earth by the biggest-ever monthly drop in retail sales in March, a set of data that didn't even include the full impact of the lockdowns that have been imposed across the country in stages. Retail sales fell by 8.7%, with autos and discretionary items hit particularly hard. Core sales, which exclude autos, fell by a slightly better-than-expected 4.5%. 

There was equally bad news from the nation's factories. Industrial output fell 5.4% in March, another number that far exceeded even the worst monthly falls during the 2008/9 recession. Manufacturing output fell even more acutely, by 6.3%. The Empire State Manufacturing index, which tracks factory activity in New York state, likewise plummeted to a record low of -78.2.

Those numbers were also reported in a raft of sharp falls in earnings at the country's biggest banks, which all reported spikes in provisions against bad loans. Bank of America (NYSE:BAC) stock fell 6.3% and Citigroup (NYSE:C) stock fell 4%.

There was positive news from the airline sector, where stocks rose across the board early on in response to the bailout agreement secured late on Tuesday with the federal government. But even in this sector, stocks reversed early gains to trade broadly mixed. 

United Airlines (NASDAQ:UAL) stock fell 2.8%, while Delta Air Lines (NYSE:DAL) stock was down 4.5% and American Airlines (NASDAQ:AAL) stock was down 2.8%. 

Among the outperformers was UnitedHealth (NYSE:UNH) stock, which rose 2.1% after the health insurer said it had seen no substantial impact to profitability from the pandemic so far. It thus was able to stick to its guidance for the year, in contrast to many companies that have had to pull theirs due to the acute degree of uncertainty.

Tesla (NASDAQ:TSLA) was also among the gainers after a report showing its factory in China returned to life in March as lockdowns eased. Tesla stock rose 1% to its highest in five weeks.

Oil and gas stocks remained under pressure as crude futures fell below $20 again after the International Energy Agency warned that the world market would remain extremely oversupplied in the near term and the Energy Information Administration reported a record rise in U.S. crude stockpiles. Occidental Petroleum (NYSE:OXY) stock was down 12.4%, while Exxon Mobil (NYSE:XOM) stock was down 6.8%

Latest comments

Trumps cares only about economy. Not suprised. He is a bussines man. It is normal thing that money is on first place. And he knows if stock falls everything will fall. Unfortunately this is beyond him. Whole world will suffer because of covid19, we are already suffering but after virus You will see what will hapen with economy
This is shaping up to be as bad as if not worse than the Sub Prime crisis. President Trump might well be credited for having already factored the threats into his decisions. If the analysis is right we might get a bit more than we bargained for but we have to consider fear mongering. Health first but it's the economy. I think personally I'd risk COVID-19 but I want to know what Prime Minister Johnson feels about the issue
Stocks still hanging on well. Rally ho them break after things open up
Trump is making everything to save América but this is beyond
I agree but just one corection. Trump is doing everything to save Americas economy not America. America includes people but he chooses economy infront of people
I don't get how Americans are fine with funding the airlines companies, They bought there own stocks all these years, dealt dividends to investors and paid high salaries to employees, so they never saved a dime for days like these.Obviously the airlines business isn't going to be the same and there are many redundant employees there, so why not letting them go so they will be able to learn something new and more constructive?Instead you are just paying them salaries without getting anything back.I thought Trump was a capitalist...
We are not fine with it- but what to do? How can we protest if we are under quarantine? How can we go on strike if we dont have a job
Realy? The market just realized that earnings are not looking so good -  peekaboo I see you. You can only surprise a toddler, so many times with this silly act. Jan 2020 - Peek -A- Boo - earings are not looking good, the market reacts surprise and stocks drop; Feb, Peek-A-Boo earings are not looking good, the market acts surprise and stocks drop. Do I need to continue? Maybe not - I do not want to surprise the market plus I don't want to play peekaboo any more. Knock, Knock. Who is there? Earnings!!! Earnings who? Exactly my point. All the steep price drop since Jan is the result of Peek-A-Boo earings are not looking good. Are the earning are going to get better? Of course, they always do. Food for thought. Drake Rostemi
Politics aside, let's focus on how the market works - it's always a buying opportunity when things look the worst, and the time to sell is when everything is looks great and "the bull case is that there's no bear case", as they were saying in early Feb. Most were too bullish, myself included, back then
weren't you tooting your own horn yesterday as the market went up?
it looks worst? you didnt see nothing
His main point is to buy low and sell high, which is true to a point. But he's hoping that bottom has been formed and it can only go up from here.
Oh, and did I mention the great job Donny Boy did with brokering the “beautiful” oil deal. Let’s take a look.....oil prices down -12% since the deal was sealed. Yep, great job, Donny Boy!
move to China then, you'll be GREAT there
Well, there you have it. Not only did Donny Boy botch the spread of Covid-19, he destroyed the US economy in the process. At least it will cost him the election. So long Donny Boy! And don’t forget to take Ivanka and Jared with you.
dems control the media! CNN is the epitome of fake news. they exaggerate the severity of the flu and blame trump for fauci's fault! fire fauci and shutdown cnn!
I bet you were top of your class...
and what about you? Can you prove him wrong while being honest?
you're not a trader you wouldn't understand
Yesterday writers wrote 3%. The truth is econ shrank over 6%. The medias r biggest stock manipluators.
Many more painful drops, the feds can print all they want but this house of cards will crumble.
remember, though, that's always the best buying opportunity when things look the worst...and vice versa
Sure, from a short term perspective, but the markets are clearly not bullish and instilling false hope into investors that all the events to now is baked in the stocks are clearly false. We have alot more pain coming ahead.
 sure but the main question is where the bottom and where the ceil? And looks like it's not the bottom
because of the huge tax cuts to the richest in 2018 there will be a huge price to pay as far a deficit is concerned and now this pandemic will remain for a couple of years, hence don't count on American economy ever getting close to being as strong as it was especially with bankruptcy king Mnuchin and the mindless trio of Kudlow, Lighthouser and Navarro and his phoney alter ego
If Hillary woulda won the down would be down to four digits right now
*dow
Buy yet again never short this
market won't stay down for long. the Fed will buy, blackrock will buy, the boe will buy, ecb will buy, etc. airlines are getting bailed out, munchkin is buying mbs by the billions to prevent a housing crash, the banks are getting backstopped so they can allow mortgage holders to not pay for 3 months, and last but not least the Congress is already working on the next stimulus which they will vote on in the next two weeks. now is a time to buy
Yeah, last time middle-class got wiped out when they bought the 1st wave lol, more waves commin - this is not going to be over just yet. You expect the market just whistle along like nothing ever happened, Look at VIX, it hit ATH for last 10years. I also remember "experts" embracing and vvanking off in early January screaming that a decade went without an economic turmoil, 2 weeks after sky came tumbling. - Like now JP Morgan screaming it's all over we will grow back, LOL they are just afraid of what's coming and are trying to bait investors with a bad 5 star dinner already deep in the sewer system. Good luck and be careful.
because of the huge tax cuts to the richest in 2018 there will be a huge price to pay as far a deficit is concerned and now this pandemic will remain for a couple of years, hence don't count on American economy ever getting close to being as strong as it was especially with bankruptcy king Mnuchin and the mindless trio of Kudlow, Lighthouser and Navarro and his phoney alter ego
China has been the money laundering hub for WS billionaires for decades. With what has happened the US should pull out of china and put them back behind the iron curtain. Do you think that will happen? HN!
This is an interesting comment, as Chinese we believe the US is a safe haven for the "red noble" class in China, it harbors the rich and the powerful families from top political tier to slave the poor and the unprivileged people.
 @TeaMakerTex - rich has no nationality, rich just protects rich
NASDAQ still ABOVE 8000, you kidding me?
China is doing the right thing to support the WHO.unlike the US who is commiting genocide of an unprecedented kind in the midst of all the suffering that's already occurring around the world.
grim data? really? you mean to say that the data was excellent yesterday hence the market rallied and today it has suddenly turned grim?
This
Dow has already been to 18k . its recovering slowly since first week of April
fake recovery, it's going to go back below 18k
definitelly. Even if jumps to 25000 it will go back below 18k. People can not recognize what is happening in whole world
I thought all the data released today already priced in with Fed $6 trillion pumping?
Nice! So how much taxpayers money evaporated in one day? Thanks to the Fed for all the fish
DOW gotta hit 18K b4 recover.
you think in september? q4?
Why does the market always act like it's surprised?
One would think the algorithms would work a little better.
Will eventually bottom between 15-18K
market should’t be more than 19000 even in this moment. It is manipulation. Economy is infront of disaster. So on bottom it must be 15 000
It already happen on March 23rd 2020. I don’t think another Major correction will happen so quickly
 It's impossible for a correction to last more less than a month during the worst economy in our lifetime. There was no correction yet, there was the natural sell off during a disaster and it was reinflated with QE money. The correction hasn't started yet.
Grim data, earnings and economic woes. These aren't new or hidden. This is just the manifestation of serpentine market capitalism initiating a rally and leaving the have nots with bag in hand.
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