Comeback rally pauses, Dow down 400, reopening plays drop

Comeback rally pauses, Dow down 400, reopening plays drop

9:43 am: Here are Tuesday’s biggest analyst calls of the day: Amazon, Dick’s, Facebook & more

  • Wells Fargo raised its price target on Amazon to $3,000 from $2,725.
  • Barclays upgraded Zynga to overweight from equal weight.
  • Bank of America raised its price target on Amazon to $3,000 from $2,600.
  • Goldman Sachs raised its price target on Facebook to $250 from $220.
  • BTIG initiated The RealReal as buy.
  • Wells Fargo upgraded eBay to equal weight from underweight.
  • Bernstein downgraded Biogen to market perform from outperform.
  • RBC downgraded KB Home to sector perform from outperform.
  • Bank of America upgraded Occidental Petroleum to buy from neutral and downgraded Chevron to neutral from buy.
  • Guggenheim downgraded T-Mobile to neutral from buy.
  • Oppenheimer upgraded Dick’s Sporting Goods to outperform from perform.
  • Morgan Stanley initiated Match Group as overweight. 

Pro subscribers read more here. —Bloom 

9:31 am: Stocks open in the red, Dow down 300 points

U.S. equities fell at the opening bell on Tuesday, as investors halted their enthusiasm about the economy reopening. The Dow Jones Industrial Average fell about 340 points, or 1.3%. The S&P 500 ticked 1.12% lower and the Nasdaq Composite fell 0.6%. The S&P 500 went slightly negative for the year. —Fitzgerald 

8:55 am: Secular bull market ‘remains alive,” BofA says

Bank of America’s Stephen Suttmeier pointed to several factors showing the secular bull market “remains alive” as the S&P 500 is within reach of upside projection levels above 3,200. “While fear may still rule the day, the S&P 500 appears to be on healthier footing today than before the 2020 correction as leadership broadens and indicators, rotation and cross-asset price action confirm the rally’s legitimacy,” said Suttmeier, the bank’s technical research strategist. —Imbert

8:15 am: Bank of America clients sold stocks last week

Bank of America Securities clients sold $3.2 billion in U.S. equities last week while the S&P 500 gained nearly 5%. The clients bought ETFs and sold single stocks for the fifth straight week. “Selling was broad-based across client groups, where hedge funds and retail clients have been sellers for the last eight and five consecutive weeks, respectively,” Bank of America equity and quant strategist Jill Carey Hall said in a note. “Financials led the outflows last week with its second-largest selling in our data history since 2008 — consistent with the record low investor positioning.” — Fitzgerald 

7:57 am: Fed kicks off meeting, with  few changes in policy expected

The Federal Open Market Committee begins its two-day meeting Tuesday with markets watching for news on several fronts. The Fed’s policymaking body is unlikely to make any major policy changes, with its benchmark rate near zero and the asset purchasing programs continuing. However, investors will be watching for thoughts on possibly implementing yield caps and strengthening forward guidance on how long the Fed will keep current policies in place. The meeting concludes Wednesday with the release of a policy statement and the quarterly summary of economic projections, then Chairman Jerome Powell’s news conference. – Cox

7:34 am: Macy’s surges premarket on better-than-expected preliminary earnings

Shares of retailer Macy’s soared more than 11% in premarket trading after the company reported better-than-expected preliminary earnings. The department store reported a loss of $2.03 per share, while Wall Street analysts were expecting a loss of $2.34 per share, according to Refinitiv. Revenue also beat estimates coming in at $3.02 billion. Analysts forecast $3.01 billion. Shares of the retailer are down about 43% in 2020. — Fitzgerald 

7:27 am: Airlines, cruise lines drop premarket

Investors shifted away from stocks that are expected to benefit from the economy reopening on Tuesday. Airlines and cruise lines have been on a tear as market participants bet on a return in travel demand; however, the equities fell in premarket trading on Tuesday. American Airlines fell 7% before the bell. Delta Air Lines and Alaska Air Group both dropped more than 4%. United Airlines and Southwest both fell about 3.9%. 

Cruise operators also ticked lower in premarket trading on Tuesday. Carnival Corp. and Royal Caribbean fell more than 4% and Norwegian Cruise Lines dropped about 3.8%. —Fitzgerald 

7:00 am: Equities’ rally hits pause 

U.S. equity futures fell on Tuesday as investors pulled back on riskier assets after a major comeback for stocks from the coronavirus market rout. The Dow Jones Industrial Average futures fell 320 points and the S&P 500 futures fell about 26 points. Nasdaq Composite futures indicated a drop of 41 points at the open. Reopening plays — airlines, cruise lines and retailers — ticked lower in premarket trading. 

Investors are awaiting the U.S. Federal Reserve’s two-day monetary policy meeting starting later in the day on Tuesday. 

On Monday, all three major averages registered sharp gains. Most notably, the S&P 500 went positive for the year. The Nasdaq Composite notched a new record high. The Dow Jones Industrial Average jumped more than 450 points. 

— with reporting from CNBC’s Jeff Cox and Michael Bloom. 

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