The S&P, Dow and Nasdaq are jumping as the weekend's updates on the coronavirus pandemic are being read as overall positive. Data over the weekend is being viewed as suggesting the apex is approaching, or may have already passed, in a number of critical places, such as New York City, Italy and Spain. Scott Gottlieb, the former FDA commissioner, was among those sharing some optimistic opinions, tweeting about "encouraging signs" he was seeing that the COVID-19 spread may be slowing in many cities, especially northeast. However, he also did call out the "southeast, New Orleans, sunbelt, southern California, Detroit, among others" that remain "areas of significant concern" in the U.S.
ECONOMIC EVENTS: There was no U.S. data of note reported.
Former Federal Reserve Chair Janet Yellen said while being interviewed on CNBC that she believes U.S. GDP in the second quarter is likely to drop by at least 30% and the current unemployment rate is likely around 12%-13% and heading higher.
Meanwhile, the latest data from the Johns Hopkins Whiting School of Engineering shows there are now 1,292,564 confirmed cases of COVID-19 and 70,798 deaths due to the disease.
TOP NEWS: Airlines stocks are in focus as many U.S. air carriers are applying for federal assistance and adjusting their flight schedules and expectations for the near future amid the COVID-19 pandemic. On Friday, Delta (DAL) said in a regulatory filing that it expects its April flight schedule to be 80% below its original plans and guided revenue for Q2 to be down 90% from the same quarter of last year. Meanwhile, United Airlines (UAL) on Friday announced that it was cutting roughly 80% of its capacity for April and estimated a 30% year-over-year decline in fourth quarter revenue. In addition, JetBlue (JBLU) CEO Robin Hayes said Friday that the company was parking over 100 aircraft and cut its April schedule by 70%. In the midst of all these announcements, Warren Buffett's Berkshire Hathaway (BRK.A) disclosed that it had sold 12.9M shares of Delta and 2.3M shares of Southwest (LUV) last week.
Adding to its output woes, Boeing (BA) announced yesterday that it is extending the temporary suspension of production operations at all Puget Sound area and Moses Lake sites until further notice due to the coronavirus outbreak. Boeing shares were up 10% near noon after the announcement.
Meanwhile, Zoom Video (ZM) shares were 6% lower near midday as reports on data privacy and security concerns surrounding the videoconferencing service continue to mount as the app has seen a surge in usage amid the COVID-19 outbreak. CNBC reported last Friday that Zoom said in an email that its waiting room feature will now be turned on by default, meaning that the meeting organizer will be able to control which participants can enter a videoconference. Following that change, Zoom CEO Eric Yuan told the Wall Street Journal that he "really messed up" on security. In addition, the Washington Post reported over the weekend that several school districts, including New York City, are banning the use of Zoom for online learning, with NYC directing teachers to use Microsoft Teams (MSFT) instead. This morning, Credit Suisse analyst Brad Zelnick downgraded Zoom Video to Underperform.
In other news, shares of Immunomedics (IMMU) have nearly doubled after the company said its late-stage ASCENT study would be halted on positive data in breast cancer. Separately, the company announced that Harout Semerjian has been appointed as president and chief executive officer.
MAJOR MOVERS: Among the noteworthy gainers was Wayfair (W), which surged 38% after saying it expects to exceed its Q1 revenue growth guidance. Also higher was Co-Diagnostics (CODX), which rose 26% after announcing that its Logix Smart COVID-19 Test has obtained emergency use authorization by the FDA to be used for the diagnosis of SARS-CoV-2. In addition, Carnival Cruise (CCL) shares were 24% higher after the Public Investment Fund of the Kingdom of Saudi Arabia disclosed an 8.2% stake in the company.
Among the notable losers was Luckin Coffee (LK), which fell 16% after Goldman Sachs said that lenders are selling up to 76.35M shares in the Chinese coffee company. Also lower was Simply Good Foods (SMPL), which declined 8% after reporting quarterly results.
INDEXES: Near midday, the Dow was up 1,168.62, or 5.55%, to 22,221.15, the Nasdaq was up 401.54, or 5.45%, to 7,774.62, and the S&P 500 was up 136.77, or 5.50%, to 2,625.42.
