Stocks fell Wednesday, with each of the S&P 500 and Nasdaq posting their largest one-day declines since March 18 as coronavirus concerns continued to weigh on investors.
The S&P 500 ended 4.41% lower Wednesday, it’s largest single-day decline since its 5.18% sell-off two weeks ago. The Dow dropped 4.44%, or 973 points, for its largest percentage decline in eight sessions, and largest point decline in two weeks.
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="In the U.S., officials’ outlooks around the coronavirus outbreak have grown increasingly somber, as the case count topped 100,000 – comprising around one-fifth of known global cases – and the death toll rose about 3,000. During a White House briefing Tuesday evening, President Donald Trump said Americans should prepare for what is going to be “a very painful two weeks” as the pandemic paces toward a peak in the U.S. Based on new White House projections, the death toll could reach up to 240,000 domestically.” data-reactid=”19″>In the U.S., officials’ outlooks around the coronavirus outbreak have grown increasingly somber, as the case count topped 100,000 – comprising around one-fifth of known global cases – and the death toll rose about 3,000. During a White House briefing Tuesday evening, President Donald Trump said Americans should prepare for what is going to be “a very painful two weeks” as the pandemic paces toward a peak in the U.S. Based on new White House projections, the death toll could reach up to 240,000 domestically.
During a press conference Wednesday, New York governor Andrew Cuomo said the state – the domestic epicenter of the outbreak – would likely see a high death rate through July.
Each of the three major indices suffered stunning declines during the first three months of this year as the coronavirus outbreak escalated globally, triggering widespread stay-at-home orders, effectively shutting down travel-related industries and grinding a myriad other business operations to a halt.
As of market close Tuesday, the last day of the quarter, the S&P 500 was down 20%. The Dow fell 23.2% and the Nasdaq dropped 14.18%, with the latter’s declines cushioned relative to the other indices as investors bought into big tech names. The Information Technology sector was the leader in the S&P 500 for the first quarter, followed by the Health-Care sector.
The Energy sector, meanwhile, was the S&P 500’s biggest laggard, dropping 51% for the year to date. This coincided with a precipitous decline in crude oil prices, with domestic West Texas Intermediate posting its single largest quarterly and monthly declines on record, settling more than 66% lower for the year to date on Tuesday. Saudi Arabia has vowed to hike its oil output to a record in April, further applying downward pressure to prices on the supply side while the coronavirus simultaneously drags down energy demand.
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4:05 p.m. ET: Stocks post worst decline in two weeks
Stocks ended Wednesday’s session sharply lower, with the S&P 500 and Nasdaq posting their biggest one-day drops in two weeks.
Here were the main moves in markets at the end of regular equity trading:
S&P 500 (^GSPC): -114.09 points (-4.41%) to 2,470.5
Stocks dropped with less than an hour to go of the regular trading session, adding to earlier losses.
Boeing led declines in the Dow, with shares off nearly 12%. American Express shed 8.6%.
Here were the main moves in U.S. equity markets, as of 3:26 p.m. ET:
S&P 500 (^GSPC): -125.40 points (-4.85%) to 2,459.19
Dow (^DJI): -1,006.61 points (-4.59%) to 20,910.55
Nasdaq (^IXIC): -362.53 points (-4.7%) to 7,337.56
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3:00 p.m. ET: Crude oil prices settle lower, extending March declines as Trump reportedly set to meet with energy CEOs
U.S. West Texas intermediate futures settled 0.8% lower to $20.31 per barrel on Wednesday, extending losses after the commodity’s worst one-month and one-quarter price drop on record.
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="U.S. producers have recently continued to pump huge volumes of crude despite an existing supply glut and demand challenges. Crude inventories rose 13.8 last week, according to the Energy Information Administration’s latest weekly report.” data-reactid=”46″>U.S. producers have recently continued to pump huge volumes of crude despite an existing supply glut and demand challenges. Crude inventories rose 13.8 last week, according to the Energy Information Administration’s latest weekly report.
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Meanwhile, the Wall Street Journal reported Wednesday that President Donald Trump is expected to meet with CEOs of companies including Exxon Mobil, Chevron and Occidental Petroleum on Friday to discuss potential government efforts to combat impacts of the oil price slump.” data-reactid=”47″>Meanwhile, the Wall Street Journal reported Wednesday that President Donald Trump is expected to meet with CEOs of companies including Exxon Mobil, Chevron and Occidental Petroleum on Friday to discuss potential government efforts to combat impacts of the oil price slump.
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12:37 p.m. ET: Stocks extend losses
Here were the main moves in markets, as of 12:37 p.m. ET:
S&P 500 (^GSPC): -102.18 points (-3.95%) to 2,482.41
12:04 p.m. ET: ‘I need to see stress in the credit markets ease’ before calling a market bottom, strategist says
As the coronavirus outbreak forces many businesses to halt operations, draw down their credit lines and scramble for capital, at least one strategist said the credit market will provide the first signal of whether the market has hit its bottom and is heading toward a recovery.
“I need to see the stress in the credit markets ease, particularly in the high yield,” Quincy Krosby, chief market strategist for Prudential Financial, told Yahoo Finance’s The First Trade Wednesday.
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="In March, more than $92 billion in debt was downgraded to high yield from investment grade among 11 companies, according to CreditSights data cited by Bloomberg. The rating declines largely reflected a deterioration in companies’ abilities to generate cash as large swaths of the world abide by stay-in-place orders. And as ratings go down, capital can become more inaccessible for borrowers. Companies including cruise line operator Carnival and KFC-parent Yum Brands have recently sought to tap into debt markets with massive bond offerings.” data-reactid=”70″>In March, more than $92 billion in debt was downgraded to high yield from investment grade among 11 companies, according to CreditSights data cited by Bloomberg. The rating declines largely reflected a deterioration in companies’ abilities to generate cash as large swaths of the world abide by stay-in-place orders. And as ratings go down, capital can become more inaccessible for borrowers. Companies including cruise line operator Carnival and KFC-parent Yum Brands have recently sought to tap into debt markets with massive bond offerings.
“Oil prices are hurting that as well, as a good portion of high yield comes from the energy patch,” Krosby added. “So, the credit markets typically leave and ease things once the stress and the yields come in.”
The Federal Reserve, however, has attempted to help businesses meet short-term funding needs with recent new measures like its special credit facility to purchase corporate paper from issuers, as part of a broader effort to ensure “there’s cash everywhere, in every nook and cranny in the credit markets,” Krosby said.
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Krosby said she is also monitoring volatility as measured by the VIX, or the so-called “fear-gauge” for the S&P 500. Wednesday afternoon, the VIX ticked as high as 60.59 before paring some gains. At the start of this year, the VIX was in the low-teens.” data-reactid=”73″>Krosby said she is also monitoring volatility as measured by the VIX, or the so-called “fear-gauge” for the S&P 500. Wednesday afternoon, the VIX ticked as high as 60.59 before paring some gains. At the start of this year, the VIX was in the low-teens.
“We don’t want to see it move above 60. At these stages with the VIX moving higher, there is a direct positive correlation with the equity market,” Krosby said. “We want that to start moving in the opposite direction.
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10:00 a.m. ET: Institute for Supply Management manufacturing PMI falls to 49.1 in March, but tops expectations
The Institute for Supply Management’s March manufacturing purchasing managers’ index fell into contractionary territory with a reading of 49.1 in March, according to a statement. Consensus economists had expected a steeper drop to 44.5, according to Bloomberg.
In February, the ISM manufacturing PMI had been 50.1, or above the neutral level of 50.0 to indicate expansion in the sector.
Beneath the headline index, the March new orders index dropped 7.6 points to 42.2, reflecting a drop-off in demand for new goods. Indices for production, backlogs of orders and employment each also fell, but by smaller margins. The supplier deliveries index, however, rose 7.7 points from February, helping offset the decrease in the overall PMI.
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9:45 a.m. ET: U.S. manufacturing sector output falls at fastest rate since 2009 and ‘worse is likely to come,’ according to IHS Markit
Manufacturing activity contracted in March by the fastest pace since August 2009 as the COVID-19 outbreak dampened demand and led to the steepest drop in production and new orders in the sector since the financial crisis, IHS Markit said in its final monthly report Wednesday.
The headline manufacturing purchasing managers’ index (PMI) fell to 48.5 in March, versus the 48.0 expected, according to Bloomberg-compiled data. Readings below the neutral level of 50.0 indicate contraction in a sector.
The March PMI was earlier reported as 49.2 in the advance print, which had already represented a decline into contractionary territory after February’s PMI of 50.7.
“Growing numbers of company closures and lockdowns as the nation fights the COVID-19 outbreak mean business levels have collapsed,” Chris Williamson, chief business economist for IHS Markit, said in a statement. “While some producers reported being busier as a result of stockpiling and anti-virus activities, notably in the food and healthcare sectors, these are very much the minority, and most sectors reported a rapid deterioration in demand and production.”
“Orders for capital equipment have deteriorated at a rate not seen since data were first available in 2009 as firms stopped investing in machinery,” he added, noting that households have also curbed spending on non-essential items. “With export sales also sliding, factories are facing a broad-based slide in demand which is already resulting in the largest job losses recorded since the global financial crisis.”
“Worse is likely to come as consumer spending falls further in coming months as lockdowns intensify and unemployment spikes higher,” Williamson said.”
Stocks fell Wednesday morning, extending Tuesday’s declines as the Dow shed more than 800 points just after market open.
The Real Estate, Financials and Energy sectors led declines in the S&P 500, each dropping more than 5%. In the Dow, Boeing and Dow Inc. posted the steepest losses.
Here were the main moves in markets, as of 9:31 a.m. ET:
S&P 500 (^GSPC): -95.71 points (-3.7%) to 2,488.88
Gold (GC=F): -$4.00 (-0.25%) to $1,592.60 per ounce
10-year Treasury (^TNX): -10.3 bps to yield 0.596%
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8:15 a.m. ET: Private payrolls declined by 27,000 in March as small businesses shed jobs, according to ADP/Moody’s report
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Private payrolls fell less than expected in March, according to the ADP/Moody’s monthly report capturing the early impacts of the coronavirus outbreak on the domestic labor market.” data-reactid=”112″>Private payrolls fell less than expected in March, according to the ADP/Moody’s monthly report capturing the early impacts of the coronavirus outbreak on the domestic labor market.
Headline private payrolls sank by 27,000, beating expectations for a decline of 150,000, according to Bloomberg-compiled consensus data. in February, private payrolls rose by 179,000, downwardly revised from the 183,000 previously reported.
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="The ADP/Moody’s survey collects data through the 12th of the month, and so does not fully capture the most recent impacts to the job market caused by the coronavirus outbreak and related social distancing measures.” data-reactid=”114″>The ADP/Moody’s survey collects data through the 12th of the month, and so does not fully capture the most recent impacts to the job market caused by the coronavirus outbreak and related social distancing measures.
By company size, small businesses bore the brunt of declines in March, with companies of up to 49 employees losing 90,000 payrolls. Medium and large business each posted net gains in payrolls.
Both the goods-producing and services sectors saw net job losses in March, with the services sector leading declines. Trade, transportation and utilities industries lost 37,000 jobs, and administrative services lost 12,000 payrolls. In the goods-producing sector, construction lost 16,000 jobs.
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Small businesses lost 90,000 jobs in March, according to ADP/Moody’s.
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8:00 a.m. ET: Home Depot announces early store closures, expanded COVID-19 safety measures
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="The Home Depot (HD) became one of the latest major retailers to announce operational changes amid the coronavirus outbreak. The company said Wednesday morning it will shrink its store hours and close at 6 p.m. daily to give staff “additional time to perform cleaning and restock shelves.” Store associates will take their temperatures before work, it added.” data-reactid=”139″>The Home Depot (HD) became one of the latest major retailers to announce operational changes amid the coronavirus outbreak. The company said Wednesday morning it will shrink its store hours and close at 6 p.m. daily to give staff “additional time to perform cleaning and restock shelves.” Store associates will take their temperatures before work, it added.
The company also said it is limiting the number of customers inside at any given time, and eliminating spring promotions to avoid incentivizing more shoppers into retail locations. The company froze prices nationwide on products in high demand due to the coronavirus outbreak, and is prioritizing fulfillment to health-care centers and personnel.
Home Depot also said it is expanding its paid time off policy for workers to accommodate disruptions due to the coronavirus, and is implementing a temporary bonus program for workers in stores and distribution centers.
Shares of Home Depot fell 3.8% in early trading to $179.55 each.
7:00 a.m. ET Wednesday: Mortgage applications jumped last week as refinances surge, but new purchases extended declines
Mortgage applications jumped by a seasonally adjusted 15.3% over the prior week for the week ending March 27, the Mortgage Bankers Association (MBA) said Wednesday. This came following a 29.4% weekly drop for the week ending March 20.
The MBA’s index tracking refinances surged 26% from the previous week and was more than double that of the comparable period last year. Purchases, however, decreased 10% compared with the previous week, and 24% compared to the same week last year.
“Mortgage rates and applications continue to experience significant volatility from the economic and financial market uncertainty caused by the coronavirus crisis. After two weeks of sizable increases, mortgage rates dropped back to the lowest level in MBA’s survey, which in turn led to a 25 percent jump in refinance applications,” Joel Kan, MBA’s associate vice president of economic and industry forecasting, said in a statement. “The bleaker economic outlook, along with the first wave of realized job losses reported in last week’s unemployment claims numbers, likely caused potential homebuyers to pull back.”
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6:01 p.m. ET Tuesday: Stock futures open little changed
Here were the main moves in markets, as of 6:01 p.m. ET:
S&P 500 futures (ES=F): down 0.47%, or -12 points to 2,557.75
Dow futures (YM=F): down 0.45% or -98 points to 21,653.00
Nasdaq futures (NQ=F): down 0.32% or -25 points to 7,761.25
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The empty Trading Floor of the NYSE after the market has closed.
MONTREAL – Travel company Transat AT Inc. reported a loss in its latest quarter compared with a profit a year earlier as its revenue edged lower.
The parent company of Air Transat says it lost $39.9 million or $1.03 per diluted share in its quarter ended July 31.
The result compared with a profit of $57.3 million or $1.49 per diluted share a year earlier.
Revenue in what was the company’s third quarter totalled $736.2 million, down from $746.3 million in the same quarter last year.
On an adjusted basis, Transat says it lost $1.10 per share in its latest quarter compared with an adjusted profit of $1.10 per share a year earlier.
Transat chief executive Annick Guérard says demand for leisure travel remains healthy, as evidenced by higher traffic, but consumers are increasingly price conscious given the current economic uncertainty.
This report by The Canadian Press was first published Sept. 12, 2024.
Dollarama Inc.’s food aisles may have expanded far beyond sweet treats or piles of gum by the checkout counter in recent years, but its chief executive maintains his company is “not in the grocery business,” even if it’s keeping an eye on the sector.
“It’s just one small part of our store,” Neil Rossy told analysts on a Wednesday call, where he was questioned about the company’s food merchandise and rivals playing in the same space.
“We will keep an eye on all retailers — like all retailers keep an eye on us — to make sure that we’re competitive and we understand what’s out there.”
Over the last decade and as consumers have more recently sought deals, Dollarama’s food merchandise has expanded to include bread and pantry staples like cereal, rice and pasta sold at prices on par or below supermarkets.
However, the competition in the discount segment of the market Dollarama operates in intensified recently when the country’s biggest grocery chain began piloting a new ultra-discount store.
The No Name stores being tested by Loblaw Cos. Ltd. in Windsor, St. Catharines and Brockville, Ont., are billed as 20 per cent cheaper than discount retail competitors including No Frills. The grocery giant is able to offer such cost savings by relying on a smaller store footprint, fewer chilled products and a hearty range of No Name merchandise.
Though Rossy brushed off notions that his company is a supermarket challenger, grocers aren’t off his radar.
“All retailers in Canada are realistic about the fact that everyone is everyone’s competition on any given item or category,” he said.
Rossy declined to reveal how much of the chain’s sales would overlap with Loblaw or the food category, arguing the vast variety of items Dollarama sells is its strength rather than its grocery products alone.
“What makes Dollarama Dollarama is a very wide assortment of different departments that somewhat represent the old five-and-dime local convenience store,” he said.
The breadth of Dollarama’s offerings helped carry the company to a second-quarter profit of $285.9 million, up from $245.8 million in the same quarter last year as its sales rose 7.4 per cent.
The retailer said Wednesday the profit amounted to $1.02 per diluted share for the 13-week period ended July 28, up from 86 cents per diluted share a year earlier.
The period the quarter covers includes the start of summer, when Rossy said the weather was “terrible.”
“The weather got slightly better towards the end of the summer and our sales certainly increased, but not enough to make up for the season’s horrible start,” he said.
Sales totalled $1.56 billion for the quarter, up from $1.46 billion in the same quarter last year.
Comparable store sales, a key metric for retailers, increased 4.7 per cent, while the average transaction was down2.2 per cent and traffic was up seven per cent, RBC analyst Irene Nattel pointed out.
She told investors in a note that the numbers reflect “solid demand as cautious consumers focus on core consumables and everyday essentials.”
Analysts have attributed such behaviour to interest rates that have been slow to drop and high prices of key consumer goods, which are weighing on household budgets.
To cope, many Canadians have spent more time seeking deals, trading down to more affordable brands and forgoing small luxuries they would treat themselves to in better economic times.
“When people feel squeezed, they tend to shy away from discretionary, focus on the basics,” Rossy said. “When people are feeling good about their wallet, they tend to be more lax about the basics and more willing to spend on discretionary.”
The current economic situation has drawn in not just the average Canadian looking to save a buck or two, but also wealthier consumers.
“When the entire economy is feeling slightly squeezed, we get more consumers who might not have to or want to shop at a Dollarama generally or who enjoy shopping at a Dollarama but have the luxury of not having to worry about the price in some other store that they happen to be standing in that has those goods,” Rossy said.
“Well, when times are tougher, they’ll consider the extra five minutes to go to the store next door.”
This report by The Canadian Press was first published Sept. 11, 2024.
TORONTO – The U.S. Consumer Financial Protection Bureau has ordered TD Bank Group to pay US$28 million for repeatedly sharing inaccurate, negative information about its customers to consumer reporting companies.
The agency says TD has to pay US$7.76 million in total to tens of thousands of victims of its illegal actions, along with a US$20 million civil penalty.
It says TD shared information that contained systemic errors about credit card and bank deposit accounts to consumer reporting companies, which can include credit reports as well as screening reports for tenants and employees and other background checks.
CFPB director Rohit Chopra says in a statement that TD threatened the consumer reports of customers with fraudulent information then “barely lifted a finger to fix it,” and that regulators will need to “focus major attention” on TD Bank to change its course.
TD says in a statement it self-identified these issues and proactively worked to improve its practices, and that it is committed to delivering on its responsibilities to its customers.
The bank also faces scrutiny in the U.S. over its anti-money laundering program where it expects to pay more than US$3 billion in monetary penalties to resolve.
This report by The Canadian Press was first published Sept. 11, 2024.
