Dow drops 370, Trump says ‘stop negotiating’ stimulus, airlines hit hard


Stocks close near session lows

The market was unable to erase its sharp fall during the final hour of trading and finished near session lows. The Dow lost 378 points, or 1.3%. The S&P 500 fell 1.4%, and the Nasdaq shed 1.6%. — Jesse Pound

Trump tweets spark 600-point drop

President Trump’s tweets about stopping the stimulus negotiations triggered a drop in the Dow of roughly 600 points and a sharp reversal in the other major indexes. The S&P 500 fell from roughly 3,430 to about 3,356. — Jesse Pound, Nate Rattner

Pelosi says Trump is ‘putting himself first at the expense of the country’

House Speaker Nancy Pelosi slammed President Donald Trump’s decision to call off coronavirus relief talks, saying he’s “unwilling to crush the virus” and is “putting himself first at the expense of the country.”

“Today, once again, President Trump showed his true colors: putting himself first at the expense of the country, with the full complicity of the GOP Members of Congress,” Pelosi said in a statement Tuesday afternoon.

“Walking away from coronavirus talks demonstrates that President Trump is unwilling to crush the virus, as is required by the Heroes Act.  He shows his contempt for science, his disdain for our heroes – in health care, first responders, sanitation, transportation, food workers, teachers, teachers, teachers and others – and he refuses to put money in workers’ pockets, unless his name is printed on the check,” she added. — Yun Li

Here’s what the Wall Street pros are saying about Trump cutting off stimulus negotiations

President Donald Trump just informed Americans that the White House would stop negotiating a second stimulus package until after the November election and stocks are tanking. 

CNBC Pro asked the Pros about Trump’s strategy and how to play it in the market. 

“Maybe spending this money isn’t as important to [Trump]. Maybe he feels that the economy can stand on its own two feet without another $2 trillion of government spending,” Peter Boockvar, Chief Investment Officer at Bleakley Advisory Group, told CNBC. “This comes in the context of Congress that’s already spent $3 trillion and there’s still a wide gap between what the Republicans are willing to spend, $1.6 trillion, and what the Democrats want to spend at $2.2 trillion.”

“At least for now I’m believing that this is part of a negotiation rather than something that’s firm,” added Boockvar. “Both sides don’t like each other. Both sides don’t want to give an inch to the other side.”

Read what the rest of the Wall Street pros are saying here. — Maggie Fitzgerald 

Dow down 300

The Dow was trading just at 300-point loss as the final hour of Tuesday’s session began. The S&P 500 and the Nasdaq Composite were down 1.1% and 1.3%, respectively. Stocks sold off after President Trump called for an end to stimulus negotiations until after the election. — Jesse Pound

Dow turns negative after Trump rejects stimulus deal

The Dow erased a 200-point gain in rapid fashion and last traded 100 points lower after President Donald Trump said in a tweet that he’s rejecting Democrats’ $2.4 trillion stimulus proposal and said he asked his representatives to stop negotiating a deal until after the election. — Yun Li

Trump reports no symptoms Tuesday

President Donald Trump is showing no symptoms of the coronavirus on Tuesday following his first night out of the hospital, the White House physician said.

“This morning the President’s team of physicians met with him in the Residence,” Dr. Sean Conley said in the latest memo on Trump’s condition. “He had a restful first night at home, and today he reports no symptoms,” Conley wrote. Trump’s “vital signs and physical exam remain stable,” he noted. “Overall he continues to do extremely well.” — Kevin Breuninger

Pelosi says stimulus action is ‘immediately needed’

House Speaker Nancy Pelosi stressed the need for further coronavirus stimulus after Federal Reserve Chairman Jerome Powell called on Congress for more aggressive action. “Chairman Powell’s warning could not be more clear: robust action is immediately needed to avert economic catastrophe from the devastation of the coronavirus pandemic,” Pelosi said in a statement on Tuesday. “It is long overdue for Republicans to join us in passing a bill that meets the needs of the American people by protecting our heroes, crushing the virus and putting money in the pockets of workers.” Investors are closely monitoring the ongoing stimulus talks between Pelosi and Treasury Secretary Steven Mnuchin. — Yun Li

Stocks making the biggest moves midday

  • Vir Biotechnology – Shares of Vir Boitechnology rose more than 3% after the biotech company said its experimental Covid-19 antibody treatment in partnership with GlaxoSmithKline will enter phase-3 trials.
  • Sonos, Logitech — Shares of the device companies dipped after Bloomberg News reported that Apple yanked third-party audio products from its online stores and retail locations.
  • Nvidia — Shares of the chipmaker rose nearly 3% after BMO raised its price target on the stock to $650 per share from $565 per share. 

Check out more midday movers here. — Maggie Fitzgerald 

Apple off its lows after event announcement

Shares of Apple jumped off their lows after the tech giant announced a new product launch event on Oct. 13 where it’s expected to reveal the next model of the iPhone.

The press invite says “Hi, Speed,” hinting at 5G iPhones. The event starts at 10 a.m. Pacific / 1 p.m. ET and will be streamed online due to the coronavirus. The stock last traded down about 1% after dropping more than 2% earlier. — Yun Li

Markets at midday: Stocks are mixed as traders await stimulus clues

The major averages were little changed on Tuesday as traders awaited news on a potential U.S. fiscal stimulus package. The Dow traded just 39 points higher in midday trading, or 0.1%. The S&P 500 slipped 0.2% and the Nasdaq Composite pulled back 0.7%. —Fred Imbert

Powell acknowledges that Fed crossed ‘red lines’ but says he doesn’t regret it

Federal Reserve Chairman Jerome Powell said he and his colleagues knew they’d come under criticism for their actions in the early days of the economic shutdown but felt they needed to do everything they could. Powell said Fed officials decided “we needed to use all of our tools and needed to do so in maybe ways where there’d been red lines saying we won’t cross those red lines.” Specifically, he said the Fed’s facilities to buy corporate debt went beyond what previous Feds had done to help the economy in times of crisis. “I think history will judge how well we did. I have never regretted the fact that we did that,” Powell told the National Association for Business Economics. — Jeff Cox

Boeing slashes forecast for new aircraft demand

Boeing has slashed its forecast for new commercial aircraft demand over the next decade based on what the company estimates will be a years-long slump due to Covid-19.

The manufacturer forecast on Tuesday that the world’s airlines will need 18,350 planes worth $2.9 trillion over the next 10 years, an 11% drop from its forecast a year ago and a jarring downbeat prediction after years of strong growth in travel around the world.

Shares of Boeing last traded about 1.4% lower.

Read more about the aircraft maker’s latest forecast here. – Leslie Josephs, Pippa Stevens

Chair Powell calls on Congress for more help

Federal Reserve Chairman Jerome Powell on Tuesday called for continued aggressive fiscal and monetary stimulus for an economic recovery that he said still has “a long way to go.”

Noting progress made in job creation, goods consumption and business formation, among other areas, Powell said that now would be the wrong time for policymakers to take their foot off the gas.

Read more on the Federal Reserve Chairman’s latest comments here. – Jeff Cox

Stocks open mixed

Stocks kicked off Tuesday’s session in the green as investors looked to ongoing stimulus talks and Federal Reserve Chairman Jerome Powell’s comments. The Dow Jones Industrial Average advanced 85 points for a gain of 0.3%, while the S&P 500 rose 0.13%. The Nasdaq Composite traded 0.12% lower. – Pippa Stevens

Powell to deliver views on economic outlook

Federal Reserve Chairman Jerome Powell provides his outlook on the economy Tuesday morning when he speaks to a virtual gathering of the National Association for Business Economics. The official topic for the central bank leader’s presentation is “Global Reset? Economics, Business and Policy in the Pandemic.” In addition to providing prepared remarks, Powell will exchange in a question-and-answer session with a moderator. The chairman’s views often can move markets. At their last meeting, in September, Fed officials officially adapted a new approach to inflation in which they effectively pledged not to raise interest rates even if the jobless rate falls below what has traditionally been considered full employment. The officials also adjusted their economic projections, taking a bit more optimistic view of growth in 2020 but reducing the outlook for the next few years. — Jeff Cox

Here are Tuesday’s biggest analyst calls of the day: Costco, SeaWorld, Beyond Meat, Nvidia & more

  • Piper Sandler raised its price target on Beyond Meat to $178 from $130.
  • RBC upgraded Northrop Grumman to outperform from sector perform.
  • JPMorgan upgraded Advance Auto Parts to overweight from neutral.
  • Barclays upgraded Costco to overweight from equal weight.
  • JPMorgan reinstated Madison Square Garden Sports as overweight.
  • Credit Suisse upgraded SeaWorld to outperform from neutral.
  • JMP initiated Generac as outperform.
  • BMO raised its price target on Nvidia to $650 from $565.

Pro Subscribers can read more here. – Michael Bloom

Credit Suisse upgrades SeaWorld, shares rise

Shares of SeaWorld Entertainment rose more than 4% in the premarket after an analyst at Credit Suisse upgraded them to outperform from neutral. The analyst also hiked his price target on the stock to $30 per share from $13 per share, implying a 46% upside from Monday’s close.

Originally, “there were three concerns that made us cautious,” said analyst Benjamin Chaiken in a note, referring to: “(1) impact from Epic Universe in Orlando, (2) a cost structure that looked fully optimized, or close to it, and (3) high leverage to Orlando.”

“Since the COVID-19 outbreak, we believe the data points surrounding those headwinds have either changed or are now fully priced in, making us more constructive on a stock with relatively low expectations,” Chaiken said.

SeaWorld shares are down more than 35% year to date. However, they have surged 95.8% over the past six months. —Fred Imbert

Moderna vaccine trial slows down after company fails to attract enough minorities

Moderna’s Covid-19 vaccine trial has slowed after the company failed to attract enough Black, Latino and Native American participants, according to Reuters. As of Sept. 17 roughly 7% of the 30,000 participants were Black Americans, a number that should have been closer to 13%, Reuters said citing those familiar with the matter.

Shares of Moderna were about 1% higher during premarket trading on Tuesday. The stock is up more than 260% this year. – Pippa Stevens

Treasury sell-off pushes yields to key support area

Treasury yields continue to push higher in early trading, as markets eye the possibility of a massive stimulus package.

The sell-off in Treasurys Monday triggered a big move in yields, which rise as investors dump bonds.

BMO says the 10-year’s move to 0.782% was its third run at that support level since mid-July. The 10-year yield, which moves opposite price, was on both sides of that level in Tuesday trading.

“The risk-on price action in other markets certainty contributed to the selloff in Treasuries, as did the effort to price in an auction concession for this week’s 10- and 30-year supply,” BMO strategists note. “What remains to be seen is whether US rates have established an interim floor in the wake of the overnight bid, or if 78.2 bp in 10s is too strong of support to fade at this stage.”

The bond market is also awaiting Fed Chairman Jerome Powell, who speaks at NABE later this morning. —Patti Domm 

Bank of America clients see biggest inflows into stocks since the March lows

Clients at Bank of America were big buyers of equities last week, posting their biggest inflows into stocks since the March lows, the bank said in a note.

Equity positions increased by $3.715 billion among BofA clients, with institutional investors contributing $2.98 billion of the total inflows. Hedge funds increased their equity positions by $209 million last week while retail investors added $238 million.

Flows were mainly driven by ETF purchases. Flows also increased across seven of the 11 S&P 500 sectors. Last week’s surge in equity buying brought the four-week flow average back to pre-coronavirus levels, BofA said. —Fred Imbert

Chamath Palihapitiya to take Clover Health public in another SPAC deal worth $3.7 billion

Chamath Palihapitiya just unveiled his next SPAC target — Clover Health, a Medicare insurance startup backed by Alphabet. Clover will go public via a merger with Social Capital Hedosophia Holdings Corp. III, a special purpose acquisition company. The deal values Clover at $3.7 billion and includes up to $1.2 billion in cash proceeds, $400 million of which will be provided through Palihapitiya-led private investment in the public entity. The move came just three weeks after Palihapitiya announced his $4.8 billion SPAC deal with real estate startup Opendoor. — Yun Li

Costco upgraded at Barclays

Barclays lifted its rating on shares of Costco to overweight on Tuesday based on factors including “robust” traffic. The firm also hiked its price target on the stock to $400 from $330. Shares of Costco were about 1% higher during premarket trading on Tuesday.

CNBC PRO subscribers can read more here. – Pippa Stevens

Stock futures are little changed after Monday’s monster rally

Wall Street was headed for a muted open on Tuesday as traders took a breather following the market’s best one-day performance in weeks.

Dow Jones Industrial Average futures were up just 16 points, or 0.1%. S&P 500 futures traded 0.2% lower and Nasdaq 100 futures slid 0.3%. 

On Monday, the Dow posted its biggest one-day jump since July 14, rallying 1.7% as optimism around President Donald Trump’s health grew along with the possibility of further economic stimulus. The S&P 500 and Nasdaq rose 1.8% and 2.3%, respectively, for their best day since Sept. 9. 

Trump left Walter Reed National Military Medical Center on Monday night, while House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin spoke for an hour on Monday regarding another stimulus package but did not reach an agreement. Drew Hammill, Pelosi’s spokesman, said the two are expected to speak again on Tuesday. —Fred Imbert

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