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Midday Summary: Stocks trade lower in profit-taking trade
The S&P 500 is down 2.9% in midday action in a profit-taking trade following its three-day rally. Investors continue to wait for a House decision on the stimulus package while assessing the latest updates on the coronavirus. The Dow Jones Industrial Average is down 3.1%, and the Nasdaq Composite is down 2.9%.
All 11 S&P 500 sectors are trading in negative territory, led lower by the cyclical energy (-5.3%), industrials (-4.1%), and information technology (-3.4%) sectors. The consumer staples sector (-0.3%) is down the least today.
In Washington, a voice vote for the stimulus bill will soon be conducted in the House, but its passage could be delayed without unanimous consent. Ideally, the market wants that unanimous consent to provide relief for households and businesses as soon as possible, especially considering that the U.S. just surpassed China for the most confirmed cases of COVID-19.
On a related note, President Trump said he spoke with his Chinese counterpart, President Xi, last night and is working closely together to combat the virus.
General Motors (GM 21.49, -1.09, -4.9%) has been in the news after President Trump also lashed out at the company regarding ventilator production and threatened to invoke the Defense Production Act. General Motors recently announced a deal with Ventec to mass produce ventilators, which was already in the works.
In other corporate news, lululemon athletica (LULU 189.82, -10.98, -5.5%) reported better-than-expected quarterly results but shares are getting swept with the broader market. Procter & Gamble (PG 110.01, +3.63, +2.5%) was upgraded to Buy from Hold at Stifel.
Elsewhere, in separate interviews with Bloomberg TV, Atlanta Fed President Bostic and Dallas Fed President Kaplan expressed confidence in an economic rebound once the coronavirus situation clears up. Mr. Kaplan is a current FOMC voter, while Mr. Bostic is an alternate voter this year.
U.S. Treasuries are trading mixed with longer-dated maturities accumulating most of the buying interest. The 10-yr yield is down seven basis points to 0.74%. The U.S. Dollar Index is down 0.6% to 98.81. WTI crude is down 4.4% to $21.60/bbl.