Dow ends 360 points lower but Nasdaq notches 26th record of 2020 as investors find safety in tech

U.S. stocks closed mostly lower Thursday, but off the low of the day, as investors sought safety in technology and tech-related investments amid rising cases of coronavirus in states like Arizona and Florida.

A 7-2 Supreme Court decision ruling that a New York prosecutor could have access to President Donald Trump’s tax returns, also was parsed by Wall Street.

The Dow Jones Industrial Average closed 361.19 points, or 1.4%, to end at 25,706.09, but had been down by as many as 544 points at the day’s low. The blue-chip index was weighed down by component Walgreens.

The S&P 500 index lost 17.89 points, or 0.6%, at 3,152.05, after touching an intraday low at 3,115.70. The Nasdaq Composite Index resumed its advance following a stint in negative territory, with the tech-laden index closing up 55.25 points, or 0.5%, at 10,547.75, marking its second record in a row and its 26th of 2020.

The Nasdaq-100 index
consisting of the largest companies within the Nasdaq by market value, closed up 0.8% at 10,754.59, while the small-cap Russell 2000 index
more sensitive to the economic outlook, finished off 2% at 1,398.92.

What’s driving the market?

It was a bumpy ride for stocks Thursday, with investors clutching for a handful of technology stocks amid resurgent concerns about the shape of the economic recovery from the COVID-19 pandemic that continues to wreak havoc on the domestic economy.

Investors are betting that large-cap tech names will be the clear winners in the aftermath of the viral pandemic, supported by a heavy dose of stimulus by the Federal Reserve and the U.S. government.

Stocks may have taken a leg lower late-morning after the Supreme Court ruled 7-2 that the president lacks immunity to withhold his tax returns from prosecutors. It was a bit of a “knee-jerk” reaction, said Joe Saluzzi, co-manager of trading at Themis Trading.

“Markets are a bit more friendly to the president and his policies,” Saluzzi said in an interview, “so anything that’s seen as negative to him might provoke a tiny reaction. “

The moves come after a report on weekly jobless claims showed that another 1.3 million Americans filed for first-time employment benefits in the most recent week, below the 1.4 million forecast in the MarketWatch survey, and down from 1.43 million in the prior week.

That keeps intact a decelerating trend since peaking last March, but still marks the 15th straight week of claims of at least a million.

“Initial claims remain very high and the improvement since late March has almost come to a halt,” wrote analysts at UniCredit in a daily research note. “The re-imposition of restrictions in several states facing growing numbers of new COVID-19 cases could have already had an effect,” the analysts said.

The jobless claims report came about a week after the monthly nonfarm-payroll report showed that U.S. economy regained 7.5 million jobs in May and June. That pales compared with the 22 million jobs lost during the first two months of the pandemic.

Against that backdrop, infections derived from the novel strain of coronavirus haven’t abated. Bloomberg News reported that Florida saw records in both new hospitalizations and deaths, while Arizona added 4,057 new cases.

Overall, the U.S. reported more than 58,000 new cases on Wednesday, according to data compiled by Johns Hopkins University, down slightly from the previous day. The country’s death toll stands at more than 132,309.

During a podcast with the Wall Street Journal on Wednesday, Dr. Anthony Fauci, the foremost expert on infectious diseases in the U.S., said that we remain in the throes of the first wave of the deadly pandemic.

“We have never gotten out of the first wave,” he said. “So I wish we would stop talking about waves and just look at the reality of where we are right now. ”

Indeed, cases in California, Texas and Florida, hot spots in this resurgence, also hit new daily record highs on Wednesday.

That said, Florida Gov. Ron DeSantis has encouraged Walt Disney Co
to proceed with its phased plan to reopen its theme parks starting on Thursday and through July 15. In New York, indoor shopping malls outside of New York City are eligible to reopen Friday, New York Gov. Andrew Cuomo said.

Meanwhile, Treasury Secretary Steven Mnuchin told CNBC during an interview on Thursday that the Trump administration supports a narrower aid package for Americans hurt by the pandemic. Mnuchin said that the White House backs a further extension of the Paycheck Protection Program, which has been extended to Aug. 8, and stimulus checks for individuals but at lesser level than the initial phases of recovery aid.

“The market has priced in the reality that virus is something we have to live with, mortalities are under control, and we’re not going back to a full societal lockdown,” said David Bahnsen, chief investment officer of Newport Beach, Calif.-based The Bahnsen Group, with over $2.25 billion in assets. 

“The market’s much more focused on the Fed,” Bahnsen said in an interview, “which is not necessarily a good thing but it’s sure hard for the market to form an opinion against risk assets with the liquidity and tight spreads that the Fed has produced.” 

Check out: Coronavirus tally: Global cases of COVID-19 top 12 million; 549,846 deaths and 38 U.S. states still see rising cases

Which stocks are in focus?

  • Shares of Bed Bath & Beyond

    sank 24.5% after the retailer said it would close 20% of its stores.

  • U.S.-listed shares of Hexo Corp.

    rose by about 6% Thursday, after the Canada-based cannabis company said it would start selling medical cannabis in Israel, marking the first time its medical cannabis products will be available outside of Canada.

  • Shares of Allegiant Travel Co.

    slid 7.7% even though the company said its bookings averaged $4 million a day, “exceeding” its expectations.

  • Tesla Inc.

    shares powered 2.1% higher on the back of a Wedbush analysis suggesting the car company may see a “snapback of demand.”

  • Shares of Harley-Davidson Inc.

    rose 0.6% Thursday after the motorcycle maker disclosed that it will cut about 14% of its workforce as part of a restructuring, and said Chief Financial Officer John Olin is stepping down, effective immediately, after 10 years in the role.

  • Walgreens Boots Alliance

    stock closed down nearly 8% after the pharmacy chain said it would cut 4,000 jobs.

  • Shares of Wells Fargo & Co.

    fell 2.1% on reports that the bank is seen cutting thousands of jobs.

How are other assets performing?

West Texas Intermediate U.S. crude futures for August delivery fell by $1.28, or 3.1%, to settle at $39.62 a barrel on the New York Mercantile Exchange, as virus concerns dogged demand on the New York Mercantile Exchange. In precious metals, August gold futures

fell $16.80, or 0.9%, to settle at $1,803.80 an ounce, after hitting its highest level since Sept. 2011 on Wednesday.

The 10-year Treasury note yield was down fell 3.6 basis point to 0.617%, around its lowest level since May 14. Bond prices move inversely to yields.

The greenback rose 0.4% against a basket of its major rivals, based on trading in the ICE U.S. Dollar Index. 

In European equities, the Stoxx Europe 600 index closed 0.8% lower, and London’s FTSE 100 fell 1.7%. In Asian markets overnight, China’s benchmark CSI 300 Index gained 1.4%, extending its weekly rally. Hong Kong’s Hang Seng Index rose 0.3%.

See also: ‘The market isn’t pricing in an all-clear on the economy,’ say BofA analysts, who say the S&P 500 will end the year at 2900

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British government says it will pick up half the checks at restaurants to help boost economy

Brits dining out in restaurants will have the cost of half of their meals picked up by the Government in an attempt to get them out and spending.

The innovative scheme is aimed at kick-starting economic growth and boosting the hospitality sector, which has been hit hard by the lockdown.

The measure is part of a raft of new policies unveiled on Wednesday by Chancellor of the Exchequer Rishi Sunak in a mini-budget which includes a £30 billion ($37.7 billion) plan to protect jobs and prevent mass unemployment as a result of the coronavirus pandemic.

This includes a youth employment program aimed at 16 to 24-year-olds, incentives for businesses to bring back furloughed staff, and reducing tax on property purchases to inject new life into the stagnant housing market.

Read:No one will be left without hope’—U.K. unveils £30 billion jobs plan to prevent mass unemployment

The “Eat Out to Help Out ” scheme unveiled in the Chancellor’s summer statement will entitle every diner to a 50% discount of up to £10 per head on their meal at any restaurant in the country, including upscale venues.

While the discount can be used unlimited times it will only be valid from Monday through to Wednesday on any eat-in meal. The move will likely hit Uber’s

food delivery service Uber Eats, Just Eat Takeway
and Deliveroo, who have all seen a lift in business as consumers stuck at home have turned to home delivery from their favorite restaurants.

The government scheme does not include alcoholic drinks and is valid for the entire month of August 2020 across the U.K.

Further details about are set to be announced shortly, but restaurants will apply the discount and will then be fully reimbursed.

“This moment is unique. We need to be creative. To get customers back into restaurants, cafes and pubs, and protect the 1.8 million people who work in them, I can announce today that, for the month of August, we will give everyone in the country an Eat Out to Help Out discount,” Sunak said.

This scheme will support around 130,000 businesses and boost confidence among Brits, encouraging them to spend amid the looming economic recession.

In May research showed a campaign to keep Britons locked down and protected from the coronavirus may have proved too successful with many now scared to leave their homes.

Read: Just after Elon Musk denounced coronavirus lockdowns as infringements of freedom, research shows Britons are too scared to leave their homes anyway

One-third (33%) of Britons said they would feel uncomfortable meeting friends and family outside their household, according to polling released by research firm Ipsos Mori. Just under two-thirds (61%) said they would feel uncomfortable using public transport or going to bars and restaurants.

Sunak also announced that value added tax (VAT) which is currently charged at 20% would be dropped to 5% for all hospitality and tourism businesses until Jan. 12.

Caroline Roylance, owner of The George at Fordingbridge, in Hampshire, U.K.

Rhizome Media

Caroline Roylance, who owns The George, a pub in at Fordingbridge, in Hampshire 90 miles from London said: “We will definitely be applying for the Eat Out to Help Out discount scheme, and the VAT reduction will help us make it through the next few months, because trade is unlikely to return to pre-Covid levels for some time.

“People are getting used to the new normal and social distancing measures, and we are doing everything possible to ensure customers will feel safe when they do return.

“I’m hopeful that we will have our bustling local pub back again in a few months, and the VAT cut and discount meals scheme will certainly help get there.”

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‘You feel like you’re being social — and responsible’: These Americans turned their garages into bars

Some Americans don’t have far to go to have a drink in a bar.

Michael and Lauren Lerman consider themselves outgoing. That’s why they’ve been hanging out a lot in their garage lately. As the coronavirus outbreak turns life upside down, the South Orange, N.J. couple has turned their two-car garage into a bar.

There’s hand sanitizer by the vodka and an oscillating fan to keep air blowing out the open bay doors. Guests can have individually-wrapped snacks and drink from paper cups.

The Lermans’ bar has hand sanitizer by the vodka and a fan to keep the air moving out the door.

“You feel like you’re being social,” said Lauren. “And responsible,” Michael added.

In Seattle, Wash., Matt Rarity is transforming his greenhouse into a speakeasy he can use with the families he’s been quarantining with since March.

It will include a flat-screen television, card table, dart board, walls festooned with sports team flags and a portable hand washing station. It’s supposed to be a “men’s club” for the husbands, but Rarity says the wives are also eyeing the space.

Matt Rarity in his Seattle speakeasy, which was once his greenhouse.

Courtesy Matt Rarity

“I’m sure there will be a battle for who gets what days,” he told MarketWatch.

It’s difficult to say how many people like the Lermans and Rarity are converting home space into watering holes. But Twitter

and Instagram

are dotted with mentions of newly-minted garage bars.

Garage bars pre-date COVID-19, but this round of bars fit a broader pattern. In the face of the pandemic, many people have been enhancing their homes to get some break from the monotony during a summer with far fewer options for fun.

These personal garage bars fulfill a unique role: They are sprouting up as concern grows over the real ones.

It’s not just garage bars either. Backyard pool sales have been hot. More than 70% of Americans are planning home improvement projects, according to a Bank of America

survey. Lowe’s

beat first quarter profit expectations, powered by customers tackling do-it-yourself tasks.

But these personal garage bars fulfill a unique role: They are sprouting up as concern grows over the real ones. With infection rates climbing in many places, states like Texas and Arizona are closing bars and other public spaces for the second time.

“Congregation at a bar inside is bad news. We really got to stop that right now, when you have areas that are surging like we see right now,” Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, told senators on Tuesday.

‘This is not a work space, this is a fun space’

The idea for the Lermans’ bar sprang from an argument their teenage daughters were having over the backyard trampoline (which pre-dated the pandemic).

Their older daughter, Carly, recommended clearing out the garage for more space. Until then, the garage was “the biggest dump. It was furniture on top of crap, on top of other crap,” Michael, 56, said.

They cleared the 400 square-foot space and weeks later visited a friend who had a pool and a cabana bar. A family friend at the gathering, Daniel Teitelbaum, 18, said he could build a bar for the Lermans.

Teitelbaum used reclaimed wood from a barn, shipping palettes and corrugated metal; the student told MarketWatch he already has a lead on another garage bar job.

Michael Lerman tests his free throw skills.

Andrew Keshner

The Lermans added amenities like a television from BestBuy

for $130 and a $180 Pop-a-Shot basketball game on eBay
Tapestries cover the wall and there’s a couch on the way. “I wanted to populate this with fun stuff,” said Michael, a real-estate developer.

The biggest expense was a hot tub, which is something the kids have always wanted. Michael wasn’t willing to pay for an expensive new one, so he found a six-month-old, lightly-used hot tub on eBay. It cost $1,500 to purchase and $2,000 to ship from its previous Wisconsin owner.

The entire project has cost approximately $5,000, but the Lermans say it’s been worth it.

With the line blurring between professional and domestic duties, the bar is a refuge from all that.

With professional and domestic duties mushing together in the rest of the house, the bar is a refuge from all that. “This is not a work space, this is a fun space,” said Lauren, 53, who works in publishing.

It’s been open for two weeks and getting steady use. The Lermans’ oldest daughter graduated from high school, but didn’t have a prom and there’s no word on a real-life graduation ceremony. So she had a small party in the space with a couple friends instead.

The Lermans don’t invite too many people over at a time.They can entertain two other couples and still keep a comfortable distance.

Once the pandemic ends, they want to maintain their beloved bar. “Some day we’ll sell this house. Some day. And hopefully [the buyers are] going to see the value of this too,” Michael said. “Or, they’ll turn it back into a garage,” Lauren said.

A garage bar isn’t a guaranteed home value boost, according to Amanda Pendleton, Zillow

Home Trends Expert. Some buyers will love it, but others will see it as a renovation project they’ll need to accomplish to restore the space to its original purpose, she said.

“Consider this project an investment in your happiness and your enjoyment of your home, but don’t expect to earn the money back when it comes time to sell,” she said.

‘An alternative way for us to connect’

Rarity’s family and two other families will start using the re-purposed greenhouse over the July Fourth weekend.

Rarity’s greenhouse, before he poured in his ‘sweat equity’ to convert the space.

Courtesy Matt Rarity

Rarity and his wife have long been planning a house remodeling. About two months ago, a friend casually remarked they could turn the approximately 300 square-foot greenhouse into a bar.

The speakeasy started with ‘a month of back-and-forth dude banter.’

That sparked “a month of back-and-forth dude banter,” which grew into real-life renovation plans, Rarity said.

Rarity, who works in telecommunications, spent between 20 to 30 hours clearing out the greenhouse and building benches.

The biggest expense so far has been the $320 kegorator. Fellow speakeasy users are donating the 60-inch flat-screen television and Rarity is using an old refrigerator he had lying around. The portable handwashing station costs $170.

“All of it has been sweat equity,” he said.

Now Rarity is ready for a pint and good times. “All the bars are shut down. You can’t go out and comfortably have a drink with friends.”

A garage bar, he said, seemed like a no-brainer: “This became an alternative way for us to connect.”

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Undetected community transmission in N.Y. drove nursing home deaths, report says

Asymptomatic staff, and possibly visitors in February and early March, unknowingly brought COVID-19 into New York nursing homes, leading to deaths among elderly residents, according to a report by the state’s health department released Monday. 

The report is a direct response to criticism of a state policy Gov. Andrew Cuomo enacted in late March that said nursing homes could not refuse to admit a resident because of confirmed or suspected COVID-19 infection. Critics argued that policy enabled infected patients to return to care facilities from hospitals and spread the disease among vulnerable residents. 

The report, based on data submitted from the state’s nursing homes, refutes that assumption, saying community transmission made its way into care facilities weeks before the admission policy went into effect on March 25 and was the primary driver of nursing home deaths. 

Read: Crowding and the coronavirus: Why different parts of NYC have been hit harder

The data in the report paint a timeline in which the admission policy could not have been the driving force behind nursing home fatalities, said Dr. Howard Zucker, New York’s health commissioner at a briefing on Monday. 

The greatest number of nursing home staff reported symptoms of COVID-19 in mid-March, before the admission policy went into effect, followed by peak nursing home deaths several weeks later in early April. By contrast, the greatest number of readmissions to nursing homes from hospitals didn’t occur until mid-April, about a week after nursing home deaths peaked, according to the report. 

Of the facilities that readmitted residents from the hospital, 81% already had a COVID-19 diagnosis at the nursing home, Zucker added.

“If you want to place the blame,” Zucker said, “blame COVID.”

New York state health commissioner Howard Zucker, who released the report on nursing homes Monday, at a June news conference.

Don Pollard

New York updated its nursing home admission policy in mid-May to say hospital patients had to test negative before returning to a nursing home. The change came after growing criticism from state lawmakers, some care facilities and the Society for Post-Acute and Long-Term Care Medicine, a professional trade group of long-term care providers. 

In response to the report, state Sen. Rob Ortt, a Republican whose district covers Niagara and Orleans counties, said in a statement that independent state and federal investigations into the policy are still needed.

New York state has reported more than 6,400 nursing home deaths, the most of any state in the U.S., though they make up about 25% of the near-25,000 deaths recorded as of Monday. By contrast, nursing home deaths account for 43% of all deaths in the U.S.

Michael Dowling, CEO of Northwell Health, which along with experts at Mount Sinai peer-reviewed the report, said it confirmed what the hospital network also witnessed. 

“When the virus hit our local communities, it quickly spread through asymptomatic carriers into our nursing homes, hospitals, places of worship and other congregate settings,” Dowling said at the Monday briefing.  

Cuomo, speaking at a separate briefing on Monday, said New York had gone from the worst outbreak in the country to having it the most under control because of its data-first approach. Of the 54,000 people tested for the disease on Sunday, less than 1% were positive, according to the state. 

Nine people died on Sunday, down from a daily peak of nearly 800 in early April. There were a little more than 800 hospitalized with the virus on Sunday, the lowest that number’s been since mid-March, Cuomo said. 

New York’s stable infection rate now contrasts sharply with the U.S., where daily cases climbed past 50,000 over the weekend. 

New York City, once the worst-hit area in the world, entered Phase 3 of reopening on Monday, but with indoor dining still closed. Two more regions of New York state will enter the fourth and final phase of reopening this week, the mid-Hudson Valley on Tuesday and Long Island on Wednesday, Cuomo said. Phase 4 allows professional sports to resume without fans, college and university campuses to reopen with new health protocols, and low-risk arts and entertainment at reduced capacity.

Also read: Why some nursing homes did better in protecting residents from coronavirus

Despite the state’s progress, Cuomo announced Monday that the New York State Fair, held annually each summer in Syracuse, would be canceled this year. The event is a boon to the Central New York economy and attracted over one million fairgoers last year. 

“That makes me personally very unhappy,” Cuomo said. “But that is where we are.”

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Brent oil scores lift from Saudi price rise, China optimism, while U.S. crude weighed down by rising coronavirus cases

Crude-oil futures on Monday traded mixed, with the U.S. oil moves pressured by evidence of growing cases of coronavirus, while international prices climbed on hopes of China’s perceived recovery from the pandemic.

Brent, the international benchmark oil, also was supported by Saudi Arabia’s decision to raise the premium of its benchmark grade crude, and all other grades, by $1 a barrel, according to Reuters, citing people familiar with the matter, representing the third straight price increase by one of the biggest exporters of oil and the most influential member of the Organization of the Petroleum Exporting Countries.

A blockade of oil-producing country Libya also remains in place, hindering exports from the north African producer, and helping to fuel expectations that supplies for crude may tighten more than expected.

Mustafa Sanalla, chairman of Libya’s National Oil Company, told the Financial Times (paywall) in an interview over the weekend that “some regional countries are complicating the negotiations while enjoying the absence of Libyan oil from the market.” The oil embargo has driven Libya’s daily oil production to 100,000 a barrel from an average of 1.2 million, the FT reported.

“Libya is shipping out a lot less crude and this just helps with that tighter supply theme,” wrote Edward Moya, senior market analyst at Oanda, in a daily research report.

“Maybe crude prices have a couple of dollars left in this rally, but the catalyst won’t come from modestly improving economic data, stimulus support for the global economy, tighter supplies, and improving OPEC+ compliance,” he said. “Everyone is bracing for the easing of production cuts in August and that will be when the battle for market share resumes.”

Energy-producing nations have “weathered the COVID-19 demand devastation storm and non-compliance [with output cuts] should become the end-of-summer theme for OPEC+,” said Moya.

On Monday, West Texas Intermediate crude for August

was down 13 cents, or 0.3%, at $40.49 a barrel on the New York Mercantile Exchange, after posting a weekly gain of 5% on Thursday, with U.S. markets closed for Independence Day on Friday.

Global benchmark Brent oil for September

rose 38 cents, or 0.9%, at $43.18 a barrel on ICE Futures Europe.

U.S. markets have been contending with growing cases of COVID-19, with the U.S. adding more than 49,000 new cases on Sunday, according to data compiled by Johns Hopkins University. Cases in the U.S. account for about a quarter of the global total of more than 11.4 million infections.

But assets considered risky also have seen an uptrend, partly on the back of hope that China, one of the biggest importers of crude globally, can continue to show progress from emerging from the viral pandemic.

Over in the U.S., a federal judge on Monday ordered the shutdown of the Dakota Access pipeline and said it must be emptied within 30 days, until a more extensive environmental review is completed, according to court documents. The 1,172-mile underground pipeline, which has been in operation since June 2017 and can transport 570,000 barrels of oil per day, runs beneath the Missouri River, north of the Standing Rock Indian Reservation.

“While the pipeline closure may be a win for environmentalists and the Standing Rock Sioux tribe, it is another blow to the U.S. shale patch that has already been hit hard from the COVID-19 virus and a historic drop in demand,” said Phil Flynn, senior market analyst at The Price Futures Group.

Last week, markets were supported by data from the Energy Information Administration, which reported Wednesday that U.S. crude inventories fell by 7.2 million barrels for the week ended June 26, coming after three consecutive weeks of increases. Analysts polled by S&P Global Platts had forecast an average crude supply decline of 2.7 million barrels.

On Nymex Monday, August gasoline

fell by 1.3% to $1.2431 a gallon, while August heating oil

tacking on 1.3% to $1.2472 a gallon.

Meanwhile, Duke Energy Corp.

and Dominion Energy

said that they were abandoning plans to build a $8 billion natural-gas pipeline in West Virginia and North Caroline, with Dominion agreeing to unload natural-gas assets to Warren Buffett’s Berkshire Hathaway


for a total of $9.7 billion, including debt.

“If completed, the pipeline would have brought gas from the most prolific gas shale region —which also has some of the lowest breakeven costs—to the broader market, likely pressuring Henry Hub [gas] prices,” said Robbie Fraser, senior commodity analyst at Schneider Electric, in a daily note.

August natural gas

was trading 5.3 cents, or 3.1%, higher at $1.787 per million British thermal units on Monday, after putting in a weekly gain of 12% on Thursday.

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