It was a tough session in the stock market today. After an impressive rally on Tuesday, equities started off lower on Wednesday. By late afternoon, the S&P 500 was down over 6%, while the Dow Jones Industrial Average was off 7%.
A late-session rally helped bring the indices off the lows, as they begin to enter a technical bear market, defined by a decline of 20% or more from the highs. We’re in a strange period now, as the coronavirus from China remains front and center. The World Health Organization declared that the virus is now officially a pandemic.
Volatility in equities, oil and rates continues to frustrate and confuse investors. It’s also got governments around the world sweating, as they worry about economic slowdowns sending us into a possible recession.
For now, some are willing to simply chalk it up to trading while the CBOE Volatility Index (VIX) is north of 50.
Movers in the Stock Market Today
Boeing (NYSE:BA) shares are down more than 50% from the 2019 highs. At one point on Wednesday, the stock was off by more than 18%, as travel-related stocks continue to get pummeled. The fall comes on reports that Boeing had 46 orders canceled last month while booking only 18 new orders, netting an overall decline of 28 orders.
Further, Boeing plans to draw down the entirety of its $13.8 billion loan, causing investors to worry a bit more about the financials. Boeing was one our Top Stock Trades on Wednesday.
Travel stocks continue to drown. Cruise operators, airlines and ride-hailing companies are under pressure. Uber (NYSE:UBER), which is near its 52-week low from November, said it may suspend accounts of those that test positive for the virus. The company is also offering financial assistance for up to 14 days to drivers that have contracted the virus.
Tesla (NASDAQ:TSLA) is moving forward with its Model Y and now, production of the Cybertruck. According to CEO Elon Musk, Tesla is looking at the central U.S. as a place to build the truck, and the East Coast for the Model Y. The company expects to begin production of the truck next year.
Cloudera (NYSE:CLDR) shares were up as much as 11% at one point on Wednesday. However, shares finished the day up just 0.5% despite better-than-expected earnings. Earnings of 4 cents per share beat estimates by 7 cents as analysts were looking for a quarterly loss. Revenue of $211.7 million grew 46.5% year-over-year and easily topped analysts estimates.
Further, management’s full-year outlook crushed consensus estimates. At some point, it should matter, but not today.
Finally, healthcare REITs tanked in the session. Reports of a coronavirus outbreak in a Sabra Health Care (NASDAQ:SBRA) facility sparked the selling. Shares fell 14.4% on the news. Welltower (NYSE:WELL), Omega Healthcare (NYSE:OHI) and Ventas (NYSE:VTR) were hit hard too, sinking 12.6%, 10.3% and 13.6%, respectively.
Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret Kenwell did not hold a position in any of the aforementioned securities.
