Stock Market Today: Q2 Off to a Rough Start; ‘Little 3?’

It was not a good start to the second quarter. After rallying 20.5% from the March lows to this week’s high, the S&P 500 has not had an easy time, retreating 7.5% already. The index was hammered in the stock market today, falling 4.4%.

Stock Market TodayIt was a horrible way to start the second quarter, as investors now wonder whether support will come into play or if we’ll retest the lows from last month.

For what it’s worth, we took a closer look at the SPDR S&P 500 ETF (NYSEARCA:SPY) in the Top Stock Trades column on Wednesday too.

Big 3 Becoming the Little 3?

Investors don’t have to be money management professionals to realize that the automakers are getting hammered right now. That’s reflected in the group’s stock prices, as well as their first-quarter sales figures.

General Motors (NYSE:GM) is among the many companies getting hit hard by the coronavirus crisis. The company reported that its U.S. sales are down 7% in the first quarter down to 618,533 vehicles. General Motors has seen inventory decrease 18% year-over-year to 668,443 units.

Joining GM with a decrease in auto sales this quarter is Fiat Chrysler (NYSE:FCAU). Despite a strong January and February, the company reported a 10% drop to 446,768 vehicles after a brutal March, thanks to the novel coronavirus. On a brighter note, Ram sales rose 3% to 140,486 vehicles, Chrysler Pacifica sales rose 5% to 24,525 and the new Jeep Gladiator notched sales of 15,259 vehicles.

Ford (NYSE:F) has yet to report its sales results, but it’s safe to assume the company took a brutal hit too. Q2 is set to be another tough stretch for the Big 3, as they look to sidestep as much of the economic disruption as possible.

Movers in the Stock Market Today

Due to the coronavirus outbreak, Xerox (NYSE:XRX) is retracting its $24-per-share offer for HP (NYSE:HPQ). Due to the pullback in the Xerox stock price, the company’s cash-and-stock offer to buy HP declined significantly as well. Originally, the company had planned to borrow $24 billion for the deal.

Further, Xerox will also end its proxy fight to replace HP’s board. HPQ stock slipped 14.5% on the news, while XRX fell 7.1%.

Kroger’s (NYSE:KR) comparable-store sales growth climbed 30% in March thanks to the coronavirus. Kroger saw strong numbers in February and even stronger physical and digital sales in March. According to the company, sales have “remained higher than normal in the final week, as customers adjusted to the new dining, work and travel restrictions. The demand has been broad based across grocery and fresh departments.”

Still, Kroger management expects volatility in sales throughout the year. Shared finished higher by about 1.2%.

BlackBerry (NYSE:BB) shares cratered on Wednesday, falling almost 20% after disappointing quarterly results. Surprisingly, the stock didn’t hit new 52-week lows on the move, though. Fourth-quarter earnings of 9 cents per share beat estimates by 5 cents, while revenue of $291 million grew 13.2% year-over-year but missed expectations by more than $5 million.

Analyst Roundup

AT&T (NYSE:T) stock slipped 3.8% on the day (and was also included in our Top Stock Trades column). Shares were downgraded from “overweight” to “neutral” at JPMorgan. Analysts also lowered their price target to $35 from $38. In an unrelated note, AT&T announced Jason Kilar as the new CEO of its WarnerMedia division. Kilar was previously the founding CEO of Hulu, a platform now owned by Disney (NYSE:DIS).

Dollar General (NYSE:DG) shares inched higher by 1.4% on the day after snagging an upgrade from Wells Fargo. The analysts upgraded the stock to overweight from equal weight and raised their price target to $175, implying about 15% upside from current levels.

Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret Kenwell is long T and DIS.

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