Stocks turn positive after Fed says it will keep stimulus coming for years: June 10, 2020

By CNN Business

Updated 5:52 p.m. ET, June 10, 2020
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1:16 p.m. ET, June 10, 2020

Tesla is the most valuable auto company on the planet

From CNN Business' Paul R. La Monica

Big techs aren't the only stocks surging to record highs. Elon Musk's electric car maker Tesla (TSLA) soared 8% Wednesday and topped the $1,000 level for the first time.

That pushed Tesla's market value to $188.5 billion, making it worth more than Toyota (TM) at $182 billion.

Investors clearly believe electric vehicles will steal even more market share from traditional gas guzzlers.

That's obvious in this stunning statistic: Tesla is now worth more than two times the COMBINED values of Big Three auto makers General Motors (GM), Ford (F) and Fiat Chrysler (FCAU).

Nikola (NKLA), a new rival to Tesla, has surged since it went public -- even though the the maker of trucks powered by battery and hydrogen fuel cells doesn't even have a product on the road yet. Nikola shares plunged 14% Wednesday, but they have still more than doubled in the past week.

1:17 p.m. ET, June 10, 2020

'Jerome Powell has to thread a needle at today's Fed meeting': strategist

From CNN Business' Anneken Tappe

The Federal Reserve's monetary policy update is less than an hour away, and will be followed by the new conference with Fed Chairman Jerome Powell.

It will be a tricky meeting for Powell, who will have to talk the economy down, Danielle DiMartino Booth, CEO and chief strategist of Quill Intelligence, told Alison Kosik on the CNN Business digital live show Markets Now.

Following last week's much better-than-expected jobs report, which showed 2.5 million positions were added to the US economy versus experts' expectations of 8 million lost jobs, more voices have gotten louder about the reopening rebound. President Donald Trump has characterized the economy's rebound as a rocket ship earlier this week.

At the same time, the market is pricing in ultra-low interest rates will be in effect for years to come. Lower rates are good for stocks because they allow companies to borrow at cheap interest rates.

This is a thorny issue for the Fed," DiMartino Booth said. "Disappointing markets at this point is very risky given that valuations have popped up to the highest on record."

Stocks have been rallying in recent weeks. The Nasdaq Composite is on track today for its third consecutive all-time closing level.

1:06 p.m. ET, June 10, 2020

Vroom roars in its first days of trading

From CNN Business' Anneken Tappe

A pandemic and recession might not seem like the best time to take a company public, but this week disproves that thesis.

Used car retailer Vroom IPOed with the ticker VRM yesterday, rallying 118% in its first trading day.

"We're not surprised that the business has done well in the public markets," said Paul Hennessy, Vroom's CEO.

The company operates as an e-commerce business rather than a traditional brick-and-mortar car dealership, and its no-contact way for customers to purchase a car is becoming more attractive during the pandemic.

Its test drive allows potential customers to keep a car for seven days, and "if it's not right they can send it back to Vroom, no questions asked," Hennessy said on CNN Business' digital live show Markets Now.

In fact, customers are now twice as likely to buy a car online than they were three months ago, he added. "We became a great alternative for customers."

12:43 p.m. ET, June 10, 2020

Stocks are mixed at midday

From CNN Business' Anneken Tappe

Stocks are mixed around midday, with only the Nasdaq Composite in positive territory. The index is on track for yet another record-breaking day, having closed at all-time highs on both Monday and Tuesday.

The Dow is 0.6%, or 156 points lower, dragged down by energy and industrials stocks.

The S&P 500 traded 0.2% lower.

12:42 p.m. ET, June 10, 2020

The top five tech stocks are now worth $6 trillion

From CNN Business' Paul R. La Monica

The Nasdaq is above 10,000 and investors clearly cannot get enough of the titans of tech.

Apple (AAPL), Microsoft (MSFT), Amazon (AMZN) and Facebook (FB) all hit new record highs Wednesday and Google owner Alphabet (GOOGL) is not far from one. This quintet is now collectively worth $6 trillion.

Apple's surge pushed its market value above $1.5 trillion for the first time and Microsoft is approaching that level too.

10:15 a.m. ET, June 10, 2020

Nasdaq hits new all-time intraday high

From CNN Business' Anneken Tappe

Nothing can stop the Nasdaq Composite. Today the tech-heavy index is on track for its third straight record close, and yesterday it rose above 10,000 points for the first time ever.

Less than an hour into today's trading session, the index soared to a new intraday high of 10,028.6 points.

"Nasdaq continues to be the flavor of the month," Edward Moya, senior market analyst at Oanda, wrote in a note. "[T]echnology stocks [remain] where investors want to be positioned even if a second wave hits the US."

10:05 a.m. ET, June 10, 2020

Airline stocks sink after JPMorgan analyst's warning

From CNN Business' Chris Isidore

A JPMorgan analyst is warning that the recent rally in airline stocks is overdone.

Airline analyst Jamie Baker downgraded United and JetBlue shares Wednesday. He also warned the entire sector could be in for more trouble once the summer travel season ends in August.

Baker's research note to clients helped send almost all airline shares down at least 7% in early trading Wednesday. Southwest was off 5%.

"We do not believe the current pace of equity ascent can be potentially maintained for much longer," Baker wrote, adding that the recent modest rebound in US air travel is "likely to moderate this fall as corporate demand inadequately backfills pent-up summer leisure travel."

He cut his sales estimates for the three largest carriers -- American, Delta and United -- to a 75% drop for the third quarter and a 50% drop in the fourth quarter. He had previously forecast declines of 50% and 25%, respectively.

Baker also raised his estimates for fuel costs in the second half of the year. Sharply lower fuel prices have been the one bright spot for airlines during the crisis, as fuel is typically their second-largest expense after labor.

9:51 a.m. ET, June 10, 2020

Mall owner Simon terminates its purchase of rival Taubman because of the pandemic

From CNN Business' Jordan Valinsky and Chris Isidore

Simon Property Group (SPG), the largest owner of US malls, has terminated its $3.6 billion purchase of rival mall operator Taubman Centers (TCO).

Simon announced the deal in February, just a month before the coronavirus pandemic caused US malls to temporarily shut down.

The company explained that its merger agreement lets Simon "terminate the transaction in the event that a pandemic disproportionately hurt Taubman."

In Simon's eyes, it did, writing in a release that the pandemic had a "uniquely material and disproportionate effect on Taubman compared with other participants in the retail real estate industry."

Simon said that Taubman didn't do enough in conserving cash during the pandemic including "making essential cuts in operating expenses and capital expenditures."

Taubman's stock dropped 30% in early trading, while Simon's shares fell nearly 5%.

9:33 a.m. ET, June 10, 2020

American Airlines brings 141 planes back from storage

From CNN's Pete Muntean

American Airlines (AAL) says it will activate more than 140 planes than have been in storage due to the coronavirus pandemic. 

"We’re expecting to move 83 Airbus A320 Family (A319, A320 and A321) aircraft and 58 Boeing 737 aircraft from storage to the active fleet to support July flying," American Airlines spokesperson Ross Feinstein told CNN. 

He cautions that July is still expected to be “way down” from a year ago. At its peak this July, the airline will operate about 4,000 flights, compared to about 7,000 flights in July 2019, he said.

Still, activating theses planes is a sign that demand for air travel is starting to trickle back. 

The Transportation Security Administration recently announced it had screened 400,000 people nationwide for the first time since March, but that is well below the levels of a year ago.