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End of Day Briefing - Monday March 30, 2020

Stock market gains more than 3% to start the week

Dow +690.70 at 22327.54, Nasdaq +271.77 at 7773.50, S&P +85.18 at 2626.65

[BRIEFING.COM] The S&P 500 climbed 3.4% on Monday, led higher by shares of health care and technology companies, even as the White House extended its social distancing guideline through the end of April. The Dow Jones Industrial Average (+3.2%) and Nasdaq Composite (+3.6%) also rose more than 3.0%, while the Russell 2000 increased 2.3%.

President Trump's original goal to reopen the economy was April 12, but the forward-looking market wasn't bothered by the slight extension amid hope that these measures will further contain the virus, so economic restrictions can later be loosened.

In addition, quarter-end rebalancing continued to play a factor in trading, while medical breakthroughs from Abbott Lab ($ABT 79.34, +4.78, +6.4%) and Johnson & Johnson ($JNJ 133.01, +9.85, +8.0%) helped sentiment. Specifically, Abbott Labs is launching a point-of-care test to detect COVID-19 in as little as five minutes, while JNJ said it selected a lead vaccine candidate that it plans to test in clinical trials by September.

Fittingly, the health care sector (+4.7%) was today's leader, followed by the information technology sector (+4.2%) amid strength in Microsoft ($MSFT 160.23, +10.53, +7.0%) and the semiconductor stocks. The Philadelphia Semiconductor Index rose 3.8%. The energy sector lagged with a 1.5% gain.

On the downside, shares of Boeing ($BA 152.28, -9.72, -6.0%) eased back from last week's 70% surge, while airline stocks like American Airlines ($AAL 12.25, -1.79, -12.8%) did get hit by the social distancing guideline extension.

Separately, oil prices continued to falter with WTI crude settling down 6.6%, or $1.43, to $20.22/BBL, as the market remained plagued by excess supply and crippling demand. On a related note, President Trump said he would call Russian President Putin to discuss the price dispute with Saudi Arabia.

U.S. Treasuries, particularly longer-dated tenors, rose alongside equities to start the week. The 2-yr yield declined two basis points to 0.21%, and the 10-yr yield declined eight basis points to 0.67%. The U.S. Dollar Index rose 0.7% to 99.01.

Monday's lone economic report was Pending Home Sales, which increased 2.4% in February following an upwardly revised 5.3% in January (from 5.2%).

Looking ahead, investors will receive the Conference Board's Consumer Confidence Index for March and the S&P Case-Shiller Home Price Index for January on Tuesday.

  • Nasdaq Composite: -13.4%
  • S&P 500: -18.7%
  • Dow Jones Industrial Average: -21.8%
  • Russell 2000: -31.0%

Market Snapshot

Dow22327.54+690.70(3.19%)
Nasdaq7773.50+271.77(3.62%)
SP 5002626.65+85.18(3.35%)
10-yr Note -2/320.708
NYSEAdv 1775 Dec 1174 Vol 1.2 bln
NasdaqAdv 2043 Dec 1220 Vol 3.8 bln


Industry Watch

Strong: Health Care, Consumer Staples
Weak: Energy, Real Estate


Moving the Market

-- Stock market starts week on higher note

-- Abbott Labs (ABT) and Johnson & Johnson (JNJ) prop up health care sector amid coronavirus developments

-- White House extends social distancing guidelines through April 30

-- Quarter-end rebalancing

-- Oil prices extend losses


ECONOMIC EVENTS: In U.S. data, an index of pending home sales rose 2.4% to 111.5 in February, which was better than forecast. The Dallas Fed manufacturing index plunged 68.8 points to an all-time low of -70.0 in March.

Meanwhile, the latest data from the Johns Hopkins Whiting School of Engineering shows there are now 741,030 confirmed cases of COVID-19 and 35,114 deaths due to the disease.

TOP NEWS: Shares of Johnson & Johnson are up 6.5% at midday after the pharma giant announced the selection of a lead COVID-19 vaccine candidate from constructs it has been working on since January 2020. Additionally, J&J announced the rapid scaling of the company's manufacturing capacity, with the goal of providing global supply of more than one billion doses of a vaccine if one is found to be successful. Of note, Johnson & Johnson CEO Alex Gorsky said while being interviewed on CNBC that the company's work on a COVID-19 vaccine will be done on a not-for-profit basis in the interest of public health. 

Abbott shares are 7% higher near noon after the company said Friday that it has received emergency use authorization from the U.S. FDA for "the fastest available molecular point-of-care test" for the detection of novel coronavirus. Abbott's test can deliver positive results in as little as five minutes and negative results in 13 minutes, the company noted.

Meanwhile, shares of Microsoft ($MSFT) are on the rise on Monday after the company said in a blog post that it has seen a 775% usage increase of its Microsoft 365 cloud services in regions that have enforced social distancing or shelter in place orders. 

Additionally, shares of Macy's ($M) are fractionally lower after the retailer told staff that it will furlough the majority of its employees since it has lost most of its sales despite continuing to sell products online. 

MAJOR MOVERS: Among the noteworthy gainers was Owens & Minor ($OMI), which rose 32% after it maintained its fiscal 2020 EPS guidance and said it has been ramping up personal protective equipment production since January. Also higher was Carvana ($CVNA), which gained 9% after it announced a $600M registered direct offering and withdrew its previous guidance provided on February 26.

Among the notable losers was Service Properties ($SVC), which slid 21% after it announced a cut to its dividend as part of its efforts to mitigate COVID-19. Also lower was Tegna ($TGNA), which fell 19% after it said that two of four parties that had made unsolicited acquisition proposals in recent weeks have subsequently informed Tegna that they were ceasing discussions.


Source: (Briefing.com)(theFly.com)

Disclosure: I may trade in the ticker symbols mentioned, both long or short. My articles represent my personal opinion and analysis and should not be taken as investment advice. Readers should do their own research before making decisions to buy or sell securities. Trading and investing include risks, including loss of principal.

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