Stock Market Update Tuesday, May 19th, 2020
The major indices were flat this morning ahead of testimony by Treasury Secretary Steven Mnuchin and Fed Chair Jerome Powell.
The testimony was on the economic response to the pandemic, held before the Senate Banking Committee.
In today’s testimony, Mnuchin said that the government is “fully prepared to take losses” on coronavirus business bailouts. And Powell said that the Fed is continuing to look at ways to accommodate borrowers and that lending programs for medium-sized business as well as state and local governments will begin operating by June 1st.
But the reaction to the testimony was pretty uneventful. And 40 minutes into the trading session stocks were at session highs.
For most of the day stocks were pretty sideways. But all of the sudden stocks went into a virtual free fall about an hour before the close.
The slide came after a report revealed concerns about Moderna’s (MRNA) trial results for a potential coronavirus vaccine. The stock lost 10.4% on the news and the major indices turned negative, snapping a 3-day win streak.
Here’s where the major indices ended the day:
- The S&P finished with a 1.1% loss. Down 31 points, the S&P ended at 2,923.
- The DOW ended 1.6% lower. Dropping 391 points the DOW closed at 24,207.
- The NASDAQ was down 0.5%. With 50 point loss the NASDAQ finished at 9,185.
Crude Oil (CL) finished higher for the 4th day in a row. Up 1.1%, Crude Oil ended at 32.01.
Home Depot (HD) and Walmart (WMT) were a weight on the DOW today.
Home Depot reported a sales increase of 7.0% last quarter, but a 10.7% drop in net income because of extra coronavirus related costs. The stock was down 3.0%.
And Walmart (WMT) dropped 2.1% after being up as much as 3.4% this morning. Walmart reported a huge jump in eCommerce sales, but also warned that the jump likely had a lot to do with stimulus payments.
The Congressional Budget Office shared some interesting information today. The CBO is now forecasting a 38% drop in Q2 US GDP and the CBO doesn’t expect the economy to fully recover until next year.
Here is the economic calendar for the week:
Real Time Economic Calendar provided by Investing.com.
This Stock Market Update was provided by Rockwell Trading Services LLC.