It was another wicked Wednesday for stocks as the major averages plunged, wiping out all of the gains accrued since President Trump took office in January 2017.
- The S&P 500 stumbled 5.18%
- The Dow Jones Industrial Average slid 6.30%
- The Nasdaq Composite wilted by 4.70%
- In a movie we’ve seen all too often in recent weeks, Boeing (NYSE:BA) was the worst-performing Dow stock, this time shedding roughly 18% of its value in a single day
Equities continued trending lower even after the White House it will step up with $50 billion in loans to the imperiled airline industry and that a $60 billion (at least) is being considered for Boeing. President Trump, now fighting for his electoral life, called the ailing airline industry the number one priority for federal aid stemming from the coronavirus pandemic.
On a related note, Boeing has shed $140 billion in market value in just five weeks and a growing number of market observers believe the company’s ability to survive now rests solely on the government rescuing the firm.
Adding to the bad news, oil prices cratered to 18-year lows earlier today, explaining Chevron (NYSE:CVX) joined Boeing among the seven Dow stocks down at least 15% today.
In late trading, 27 of the 30 Dow stocks were in the red, a surprisingly low number given how gruesome the action was today.
Not surprisingly, downtrodden American Express (NYSE:AXP) was among the Dow stocks flirting with intraday losses of 15%. That a day after the company, again not surprisingly, warned that its first-quarter earnings will take a big coronavirus-related hit.
For the current quarter, AXP expects to earn $1.90 to $2.10 a share, well below the previous Wall Street forecast of $2.17 per share. Due to the COVID-19 outbreak, AXP said that, at this time, it cannot forecast results beyond the March quarter.
No Buffer From Insurance Stocks
There was a time when insurance stocks were considered docile. This isn’t it. On essentially no news other than the market being dreadful today, Travelers Companies (NYSE:TRV) shed more than 19%.
The thesis that United Healthcare (NYSE:UNH) would be responsive to former Vice President Joe Biden’s increasing momentum in the chase for the Democratic presidential nomination — he won three more states last night — has been dealt a major blow as that stock was also in the Dow’s 15% or worse club today.
No Reason to Bet on Industrials Here
If Boeing doesn’t convince an investor to stay from the industrial sector, perhaps United Technologies (NYSE:UTX) will. That industrial conglomerate shed about 19%, extending its March loss to roughly 40%.
There will certainly be some industrial names worth scooping at some point, but with recession risk rising if not already here, investors would do well to stay from this economically sensitive sector.
Defensive Wins Again
There was little to brag about with Dow stocks today, but in a sign that defensive names, very likely because shoppers are stocking up on essential goods due to coronavirus panic, Walgreens (NASDAQ:WBA) and Walmart (NYSE:WMT) were two of the three Dow winners today.
Bottom Line on the Dow Jones Today
The White House’s stimulus ideas are admirable, but President Trump and team likely need to think bigger if he has any shot at winning reelection in November.
I mention this because J.P. Morgan was out today forecasting a 4% slide in first-quarter GDP followed by a staggering 14% drop in the second quarter. Things are expected to get markedly better in the second half, but the bank is estimating U.S. GDP for 2020 will decline 1.5%.
Todd Shriber has been an InvestorPlace contributor since 2014. As of this writing, he did not hold a position in any of the aforementioned securities.