Monday marked one of the harshest sessions in U.S. equities, as the Dow Jones Industrial Average shed close to 3,000 points and as major indices fell more than 11%. We saw a relief rally of sorts on Tuesday, with stocks closing higher in the stock market today.
Investors’ fear now is, can the rally last? The S&P 500 retested Monday’s low before reversing and closing higher by 6%. Still, after Monday’s drumming, Tuesday’s bounce barely feels like relief.
On the plus side, growth stocks caught a bid on Tuesday. Names like Roku (NASDAQ:ROKU), Nvidia (NASDAQ:NVDA), Salesforce (NYSE:CRM) and others have been under significant pressure. And they began under pressure on Tuesday too, before ripping higher on the day.
Again though, the question remains, how long does that action last?
Stimulus for Citizens
With the need for immediate economic relief, President Donald Trump’s administration is considering a plan to get checks to Americans as soon as the next two weeks. The exact details of this plan are unclear at the moment and some reports have said it may not happen before the end of April.
Still, the White House is working on an attempt to get cash into Americans’ hands sooner rather than later. The floated amount? Reportedly more than $1,000 per adult. Treasury Secretary Steven Mnuchin also mentioned extending the tax filing season by three months and is discussing a $1 trillion stimulus package.
Furthermore, the Federal Reserve will place a $10 billion backstop on the commercial paper market. That’s in addition to its $1 trillion overnight liquidity program for the repo market.
Movers in the Stock Market Today
Over the weekend, Apple (NASDAQ:AAPL) said it will close all of its retail stores outside of China until March 27. Due to the rapid spread of the coronavirus from China, today it updated that statement by announcing it will remain closed until “until further notice.”
Analysts are taking notice, too. A Morgan Stanley analyst cut Apple’s price target from $368 to $328 and a Jefferies’ analyst cut it from $370 to $320.
While most analysts think the global demand for automobiles is about to plummet, Detroit automakers worry if companies such as Tesla (NASDAQ:TSLA), Toyota (NYSE:TM), Honda (NYSE:HMC), Nissan (OTCMKTS:NSANY) and Volkswagen (OTCMKTS:VLKAY) are still able to produce cars in the U.S., it would put Ford, GM and Chrysler at a large disadvantage.
Costco (NASDAQ:COST) just made a $1 billion acquisition of logistics firm Innovel Solutions, purchasing the unit from Transformco. The company hopes this acquisition will boost its delivery power, as Innovel should increase Costco’s last-mile delivery capabilities for bulky items.
Airlines Need Help — But Will They Get It?
Boeing (NYSE:BA) shares continue to get hung out to dry. Shares fell 4.2% on the day, closing at $124.14. However, the stock traded as low as $101.25 in early Tuesday trading. It’s something many investors never would have expected, as there is a sudden concern regarding its financials.
Earlier this month, Boeing drew down the entirety of its $13.8 billion loan, raising some eyebrows. The company is now asking for short-term aid from the federal government, while agencies have taken to downgrading Boeing’s credit rating. The company is reportedly seeking “tens of billions” of dollars.
At Tuesday’s low, shares were down more than 70% from last month’s high. The stock made our Top Stock Trades list as a result.
Boeing’s not the only one struggling. Much of the airline space is dealing with negative net bookings and a drying up of capacity. International flights are being cut back too.
“We’re going to back the airlines 100%,” Trump has said. It’s not clear to what extent, but Southwest Airlines (NYSE:LUV), Delta Air Lines (NYSE:DAL), United Airlines (NASDAQ:UAL), American Airlines (NASDAQ:AAL) and others are in the spotlight.
Drawing the ire of many though, is the many billions of dollars these companies have used on buybacks over the years. Should they be bailed out? What should the terms be? That’s what readers and investors are trying to figure out.