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Stocks - Wall Street Makes Weak Start to Week on Fears of Earnings Gloom Ahead

Stock MarketsApr 13, 2020 04:03PM ET
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© Reuters.

By Yasin Ebrahim 

Investing.com – Wall Street ended Monday off session lows, supported by strength in tech, but investor sentiment remained fragile amid worries companies are set to deliver a wave of gloomy earnings.

The Dow Jones Industrial Average fell 1.4%, or 328 points, but was down as many as 624 points at the lows of the day. The S&P 500 lost 1%, while the Nasdaq Composite rose 0.48%.

With just a day to go until Wall Street banks kick off the first-quarter earnings season in earnest, investors appear to be bracing for earnings and guidance that will likely underscore the material impact to growth from the Covid-19 pandemic.

JPMorgan Chase (NYSE:JPM) and Wells Fargo (NYSE:WFC) get the first-quarter earnings season underway in earnings with results on Tuesday

Bank of America (NYSE:BAC), Goldman Sachs (NYSE:GS) and Citigroup (NYSE:C) report on Wednesday, with Morgan Stanley (NYSE:MS) expected to report later this week.

The earnings arrive against a backdrop of growing optimism that some parts of the U.S. under lockdown may soon snap back into operation at a time when some Covid-19 hotspots like New York State are showing signs that the worst of the outbreak has passed.

"I think you can say the worst is over," New York Governor Andrew Cuomo said, but he stressed lockdown measures, including social distancing, would need to continue to avoid jeopardizing the progress seen so far.

Intensive care unit admissions and the three-day hospitalization average continue to drop, Cuomo added, as total cases topped 195,000 and deaths passed the 10,000 mark.

The New York governor also joined several of his counterparts from New Jersey, Connecticut, Pennsylvania, Rhode Island and Delaware to support the government's plans to reopen the economy.

President Donald Trump said in a tweet Monday that the decision to restart the economy would be made "shortly".

The losses in the broader market, meanwhile, were limited by a rise in tech stocks, led by a surge in Netflix (NASDAQ:NFLX) as investors bet the surge in consumers will not disappear after coronavirus pandemic is over.

Amazon (NASDAQ:AMZN), meanwhile, surged 6% to close near all-time highs after Canaccord Genuity raised its price target on the stock to $2,600 from $2,500. The brokerage expects that higher margins in Amazon's cloud business will help offset rising fulfillment costs as the e-commerce giant has seen a surge in demand for household essentials and groceries in the wake of the ongoing pandemic.   

Energy stocks, meanwhile, were pressured by a fall from session highs in oil prices as investors shrugged off coordinated oil production cuts from major producers as the 10 million barrel per day cut agreement will not offset the coronavirus-led loss of demand of around 20 million bpd.

Industrials fell nearly 3%, paced by an 8.7% decline in Caterpillar (NYSE:CAT) after Bank of America downgraded the stock to underperform from neutral. The bank expressed worries the hit to the energy and mining sectors from the coronavirus would hurt the heavy-equipment maker's results.

Stocks - Wall Street Makes Weak Start to Week on Fears of Earnings Gloom Ahead
 

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Comments (10)
MADHAVAN NARAYANAN
MADHAVAN NARAYANAN Apr 14, 2020 9:20AM ET
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Above 24300, Bears will die
rob finch
rob finch Apr 13, 2020 8:23PM ET
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there are a lot of people trying to talk the economy down. what past event are they comparing this to? We shut down on purpose. then we will start back up. incomes are way down but so are expenses. and 2 months is only significant in the short term. all this is is a much awaited buying oppurtunity.
Rick Lai
Rick Lai Apr 13, 2020 8:23PM ET
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you believe just two months is enough?
Chris Martin
Chris Martin Apr 13, 2020 8:23PM ET
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Rick Lai Depends if you believe Swamp Media
Justin Goldman
Justin Goldman Apr 13, 2020 7:07PM ET
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Have people forgotten how these things go? We're about 2 months in and think we're already in a recovery. After one impulse wave down... Go back and look at SPY in late 2007. You'll see almost the same chart for this amount of time, then there is more than an entire year of bear market. It took multiple years to get back to the high from the initial drop. We're not even close to the bottom if it acts anything like every economic crisis since the beginning of stock markets. This ignorant optimism is a little scary, because it means people are throwing more money away, leading to a worse crisis. Do your homework. Be safe. Hedge and set stop losses at the very least.
James Dorward
James Dorward Apr 13, 2020 7:07PM ET
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certainly won't take years. bounce back is on the way.
Chris Martin
Chris Martin Apr 13, 2020 7:07PM ET
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Wrong. read a history book.
John Shiels
John Shiels Apr 13, 2020 6:28PM ET
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Trump was right to implement travel bans, unfortunately the invisible enemy was probably here festering amongst the foreign national students at our universities going on since twenty years ago. Thank Bill Clinton for that.
Jeremy Johns
Jeremy Johns Apr 13, 2020 6:28PM ET
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What is wrong with you
John Shiels
John Shiels Apr 13, 2020 6:28PM ET
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Jeremy Johns I might have been around longer than you. I’m sick of all the inferior goods that have slipped through our ports, the dog food that kills, the childrens toys that sicken, the drywall that harms, the unsafe electrical appliances, the loss of manufacturing jobs, the trade imbalance, the reverse engineering, the theft of industrial and military secrets, the hacking, the biological cocktails, and the continued assault on this country, to name a few. What’s wrong with you?
Adam Mutchler
Adam Mutchler Apr 13, 2020 6:28PM ET
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Good point and I agree John
John Shiels
John Shiels Apr 13, 2020 6:16PM ET
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I believe that China is guilty as sin, has the entire world disrupted and very mad, and that they need to pay. As a United States Citizen, who has been taken advantage of for many years by China, all debts with China are hereby cancelled.
History Light
History Light Apr 13, 2020 6:16PM ET
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We will do some reflection. This time we have virus. What about next crisis? Still finding another foreign country to blame?
Chris Martin
Chris Martin Apr 13, 2020 6:16PM ET
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psst... read the label-
Chris Martin
Chris Martin Apr 13, 2020 6:16PM ET
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Facts and theory are quite different...
Robert DZ the patterns
Robert DZ the patterns Apr 13, 2020 6:10PM ET
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Tomorrow there will be all of data it needs to go UP, remember now, the bad news is good news. Welcome to the Twilight Zone, we are all manikins now.
James Wade Kent
James Wade Kent Apr 13, 2020 5:50PM ET
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Hope trump has his waders onn
Muhamed Jaffir
Muhamed Jaffir Apr 13, 2020 5:01PM ET
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wall street should not be where it is at, weak start implies positive growth and earnings. there are none.
Robert DZ the patterns
Robert DZ the patterns Apr 13, 2020 5:01PM ET
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I agree, it should be much higher and it will be tomorrow higher amid gloomy economic data and another millions claims of unemployed on Thursday data.
Alchemist Zu
Alchemist Zu Apr 13, 2020 4:33PM ET
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What is the best play to make in this market situation? SPY? Gold?
Nick Passarella
Nick Passarella Apr 13, 2020 4:33PM ET
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Changes day to day.
Ara Gregorian
Ara Gregorian Apr 13, 2020 4:33PM ET
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INSG
Sam Jennings
Sam Jennings Apr 13, 2020 4:15PM ET
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Just remember about something called FORWARD GUIDANCE, though...
Show previous replies (4)
Michael Redden
Michael Redden Apr 13, 2020 4:15PM ET
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People recover from the flu bro smh. see ya on the ride up next quarter
mad god
mad god Apr 13, 2020 4:15PM ET
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I started going back in market gradually since 3-26. Making 10k so far.
mad god
mad god Apr 13, 2020 4:15PM ET
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Sold all on or before 2-28 and In market again starting 3-26 gradually
mad god
mad god Apr 13, 2020 4:15PM ET
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Spencer Smith  i started entering market gradually again from 3-26. making 10k so far.
mad god
mad god Apr 13, 2020 4:15PM ET
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Michael Redden   yes sold all stock on and before 2-28 and in market again starting 3-26 gradually
 
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