U.S. Stocks Close Lower Following Late-Day Pullback

After seeing strength for much of the session, stocks came under pressure in the final hour of trading on Thursday. The major averages pulled back off their highs of the day and into negative territory.

The major averages climbed off their lows going into the close but still ended the day in the red. The Dow fell 147.63 points or 0.6 percent to 25,400.64, the Nasdaq slid 43.37 points or 0.5 percent to 9,368.99 and the S&P 500 dipped 6.40 points or 0.2 percent to 3,029.73.

The late-day pullback on Wall Street was attributed to President Donald Trump announcing plans to hold a news conference about China on Friday.

China has recently stepped up efforts to curtail Hong Kong’s independence, raising concerns that Trump may announce new measures that ramp up recent tensions with China.

The strength seen for much of the day came following the release of a report from the Labor Department showing a continued decrease in first-time claims for unemployment benefits in the week ended May 23rd.

The Labor Department said initial jobless claims dropped to 2.123 million, a decrease of 323,000 from the previous week’s revised level of 2.446 million.

Economists had expected jobless claims to fall to 2.100 million from the 2.438 million originally reported for the previous week.

With the decrease, jobless claims pulled back further off the record high of 6.867 million set in the week ended March 28th.

Meanwhile, the Commerce Department released a separate report showing a substantial decrease in new orders for U.S. manufactured durable goods in the month of April.

The report said durable goods orders plunged by 17.2 percent in April following a revised 16.6 percent nosedive in March.

Economists had expected durable goods orders to plummet by 19.0 percent compared to the 14.4 percent slump originally reported for the previous month.

Housing stocks showed a substantial move to the downside on the day, dragging the Philadelphia Housing Sector Index down by 3.9 percent.

The weakness in the sector came after the National Association of Realtors released a report showing a steep drop in pending home sales in the month of April.

Significant weakness was also visible among banking stocks, as reflected by the 3.6 percent nosedive the KBW Bank Index.

Computer hardware, energy and semiconductor stocks also saw considerable weakness on the day, while strength remained visible among utilities, pharmaceutical and chemical stocks.

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Thursday. Japan’s Nikkei 225 Index spiked by 2.3 percent, while Hong Kong’s Hang Seng Index fell by 0.7 percent.

Meanwhile, the major European markets all moved to the upside on the day. While the French CAC 40 Index surged up by 1.8 percent, the U.K.’s FTSE 100 Index and the German DAX Index jumped by 1.2 percent and 1.1 percent, respectively.

In the bond market, treasuries showed a modest move to the downside over the course of the session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 2.5 basis points to 0.705 percent.

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Even Stock Optimists Grow Nervous About Rally

The most vocal optimists are getting skeptical of the never-ending stock rally.

What once seemed sensible is starting to baffle even them. The S&P 500 is up 39% in 50 days and in the midst of its longest winning streak since February. A flattening virus curve, Federal Reserve stimulus and reopening plans explain a lot of it, they say. But with $7 trillion in value created and the Nasdaq 100 near a record, many big bulls are sounding distinctly…bearish.

The S&P 500 rose 1% as of 12:15 in New York. Here’s what a few investors who believed in the rally now have to say:

Stranger Things

Peter Tchir’s bullish pronouncements amid the recent rebound have largely borne out. But for the head of macro strategy at Academy Securities, explaining why stocks keep going up is getting harder. Though the S&P 500 hasn’t yet breached 3,200 — Tchir’s near-term target for the index, which he raised from 3,000 just last week — he’s considering throwing in the towel nonetheless. His list of concerns include the escalating tiff between the U.S. and China, which is likely to escalate, the likely arc of of re-openings, and diminishing prospects for new stimulus. Tchir remains bullish but is reducing risk, he said on Wednesday.

“Normally I’m right there alongside whoever suggested tequila shots at midnight, but today, I’m going to quietly grab my jacket and leave before anyone notices I’m gone,” he wrote in a note. “Today has that feeling in the market. Bears capitulating left, right and center. I am not going to be fully short, but I am strongly in favor of reducing risk positions across equities and credit.”

Aggressive Assumptions

The market’s rally has been surprising but not unthinkable considering the fiscal and monetary measures already unleashed. But stocks have yet to start discounting what’s turning out to be a long list of worries, says Ralph Bassett, head of U.S. equities at Aberdeen Standard Investments, which has about $644.5 billion under management. Exogenous shocks, including a potential second wave of infections, could pose risks. His team is looking at tweaking their allocations but it’s proving difficult: sectors that could benefit coming out of a recession have already gotten expensive, he said in a phone interview.

“It just feels like markets aren’t discounting in risks to the downside at this stage — at least to a meaningful degree,” he said. “You can certainly justify a lot of the rebound, particularly in cyclical stocks, but the assumptions to get there are aggressive in our view.”

Burgeoning Skepticism

Three days before the stock market bottom on March 23, Pacific Life Fund Advisors upped its exposure to risk. The Newport Beach-based money manager has remained optimistic since, but is now growing dubious.

According to Max Gokhman, Pacific Life Fund Advisors’ head of asset allocation, the firm’s “burgeoning skepticism” is a function of two developments. First, while economic indicators including jobless claims and PMIs are indeed improving, they aren’t accelerating at a rate that would back a V-shaped recovery. Also, new negative catalysts have emerged, from riots to U.S.-China tensions.

“Investor’s favorite horror franchise of the last two years is back — Trade Wars: Return of the Tweet,” said Gokhman. “We start to see asymmetric risks to the downside with the S&P above 3,200, or just 200 points off its all-time highs.”

Turning Down the Dial

If bullishness could be mapped out on a scale from one to 10, Neil Dutta just turned down the dial from an 8 to a 7 — or maybe a 6, he said. It’s not a drastic downgrade to his outlook but the head of economics at Renaissance Macro Research says the risks have ticked up a bit in recent days.

To Dutta, the mass protests and gatherings happening around the country heighten the potential for an increase in coronavirus cases, which, in turn, could complicate plans for re-openings. Sure, stocks are going up right now, making everyone feel better, he said, but “we had been thinking we’d open up nicely in the third quarter and that potentially puts that in doubt.”

Dutta added that it’s too early to tell whether protests will cause another wave of infections — and that there are still plenty of things to be upbeat about, including positive trends in housing data as well as an easing in global conditions, particularly in Europe.

— With assistance by Claire Ballentine

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Stocks turn higher after weekend riots, China cuts US ag purchases

Grasso: NYSE protecting people while giving them access to money

Former NYSE Chairman Richard Grasso on the New York Stock Exchange floor closing due to the coronavirus.

U.S. equity markets were higher Monday after riots over the weekend left a trail of destruction across America and China ordered state-run companies to stop the purchases of some U.S. products.

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The Dow Jones Industrial Average gained nearly 50 points, or 0.18 percent, after falling by as many as 162 points in the opening minutes of trading. The S&P 500 and the Nasdaq Composite were higher by 0.17 percent and 0.34 percent, respectively.

Ticker Security Last Change Change %
I:DJI DOW JONES AVERAGES 25460.86 +77.75 +0.31%
SP500 S&P 500 3048.17 +3.86 +0.13%
I:COMP NASDAQ COMPOSITE INDEX 9524.570862 +34.70 +0.37%

Riots erupted across the country over the weekend, causing the deployment of 5,000 National Guard members in at least 15 states. The reinforcements were unable to prevent rioters from destroying property, setting fires and looting stores nationwide.

Meanwhile, China on Monday ordered state-run agriculture buyers to temporarily halt purchases of U.S. products including soybeans and pork, according to a Bloomberg report confirmed by FOX Business.

The decision, which puts the partial trade agreement in jeopardy, comes after President Trump on Friday ordered his administration to punish Beijing for passing a national security bill that bypassed Hong Kong’s legislature, effectively ending the “one country, two systems” governing principle that was guaranteed for the 50 years following Great Britain’s 1997 handover to China.

The major averages trimmed their early losses after the May reading of ISM Manufacturing climbed to 43.1 from last month's 41.5. Wall Street analysts surveyed by Refinitiv were expecting a reading of 43.6.

Retailers were in focus after a weekend of looting swept stores in major shopping areas across the country. Target, Walmart and Nike are among the companies that have temporarily shuttered locations due to the violence.

Ticker Security Last Change Change %
TGT TARGET CORP. 119.98 -2.35 -1.92%
WMT WALMART INC. 122.94 -1.12 -0.90%
NKE NIKE INC. 99.25 +0.67 +0.68%

Gun-related names also garnered attention amid the riots with gun makers Sturm, Ruger & Co. and Olin Corp., ammunition maker Vista Outdoor and police body cam and Taser stun gun maker Axon Enterprise all seeing gains.

Ticker Security Last Change Change %
RGR STURM RUGER 65.00 +2.66 +4.27%
OLN OLIN CORP 12.67 +0.64 +5.32%
VSTO VISTA OUTDOOR INC 10.95 +1.24 +12.77%
AAXN AXON ENTERPRISE 89.95 +13.99 +18.42%

Elsewhere, drugmaker Eli Lily dosed patients in a phase one study of its potential COVID-19 antibody treatment. Rival Gilead Sciences said its phase three study of experimental COVID-19 treatment remdesivir showed promise in five- and 10-day treatment groups.

Ticker Security Last Change Change %
LLY ELI LILLY & COMPANY 152.63 -0.32 -0.21%
GILD GILEAD SCIENCES INC. 74.78 -3.04 -3.91%

Coty shares soared after the beauty products maker reached a deal to sell a 60 percent stake in its hair business to private-equity firm KKR for $2.5 billion in net cash and a $1 billion direct investment.

Ticker Security Last Change Change %
COTY COTY INC. 4.39 +0.76 +20.93%

West Texas Intermediate crude fell 2.56 percent to $34.58 a barrel while gold slipped 0.52 percent to $1,743 an ounce.

U.S. Treasurys slid, running the yield on the 10-year note up by 2.5 basis points to 0.669 percent.

In Europe, France’s CAC was higher by 1.26 percent while Britain’s FTSE advanced 1.23 percent. Germany’s DAX was closed for a holiday.

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Hong Kong’s Hang Seng paced the advance in Asia, climbing 3.36 percent, while China’s Shanghai Composite and Japan’s Nikkei gained 2.21 percent and 0.84 percent, respectively.

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Hong Kong Stocks Rally After Trump Holds Fire on Retaliation

Hong Kong stocks rose, with the benchmark index capping its best day in more than two months, on speculation the U.S. administration won’t take extreme steps in response to China’s crackdown on the city.

The Hang Seng Index closed 3.4% higher, led by real estate firms, after falling almost 7% last month. Shares on the mainland also climbed, with the CSI 300 Index advancing 2.7%. News that China is halting some U.S. farm imports tempered the optimism late in the day, sending the offshore yuan down 0.2%.

While the U.S. President Donald Trump’s speech Friday was heated in rhetoric, it lacked specifics around measures that would directly impact the city. He announced the U.S. would begin the process of stripping some of Hong Kong’s privileged trade status without detailing how quickly any changes would take effect and how many exemptions would apply.

“Trump’s comments gave no immediate measures on Hong Kong and leave room for negotiations with Beijing,” said Castor Pang, head of research at Core Pacific-Yamaichi International. “Trump’s comments have eased investors’ concern about the impact of potential sanctions on the Hong Kong economy.”

Traders had increased their hedges at the end of last week due to concern over what Trump might announced in his speech. Short selling volume on Hong Kong’s main board climbed to 21% of total turnover Friday, the highest proportion in data going back more than two decades.

Sun Hung Kai Properties Ltd. surged the most since September, adding 6.1% while Swire Pacific Ltd. jumped 6%. Elsewhere, Sino Biopharmaceutical Ltd. rose 6.7%. The MSCI Hong Kong Index rose 4%.

The Hang Seng Index is trading below its price-to-book value, near a record low, after being pummeled by concern over the health of the economy, U.S.-China ties and the city’s future as a financial center. The measure’s drop in May was the biggest relative to the MSCI All-Country World Index since the Asian financial crisis in 1998.

The offshore yuan last traded at 7.1437 per dollar. Chinese government officials told major state-run agricultural companies to pause purchases of some American farm goods including soybeans as Beijing evaluates the ongoing escalation of tensions with the U.S. over Hong Kong, according to people familiar with the situation.

— With assistance by Ken Wang

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U.S. Stocks Move Sharply Higher, Nasdaq Hits Three-Month Closing High

Following the sharp pullback seen late in the previous session, stocks showed a strong move back to the upside during trading on Wednesday. With the upward move, the tech-heavy Nasdaq ended the session at its best closing level in three months.

The major averages finished the session off their best levels of the day but still sharply higher. The jumped 369.04 points or 1.5 percent to 24,575.90, the Nasdaq spiked 190.67 points or 2.1 percent to 9,375.78 and the S&P 500 surged up 48.67 points or 1.7 percent to 2,971.61.

The rally on Wall Street partly reflected continued optimism about an economic recovery as states begin to reopen following the coronavirus-induced lockdowns.

Early indications suggest the states that have reopened have not seen a spike in coronavirus cases, which has led to hopes the economy may rebound more quickly than many economists predict.

Meanwhile, traders largely shrugged off a report raising doubts about Moderna’s (MRNA) potential coronavirus vaccine.

The report from STAT News questioned the validity of the results of Moderna’s vaccine trial that had sent stock markets soaring on Monday.

Positive sentiment was also generated in reaction to earnings news from Lowe’s (LOW), with the home improvement retailer reporting first quarter results that exceeded analyst estimates on both the top and bottom lines.

At the same time, the minutes of the Federal Reserve’s latest monetary policy meeting highlighted concerns about the extraordinary amount of uncertainty and considerable risks to economic activity created by the coronavirus pandemic.

The minutes said participants at the late-April meeting discussed several alternative scenarios with regard to the behavior of economic activity in the medium term that all seemed about equally likely.

“These scenarios differed in the assumed length of the pandemic and the consequent economic disruptions,” the Fed said.

A number of participants believed there was a substantial likelihood of additional waves of the coronavirus outbreak, which could lead to further economic disruptions.

Sector News

Energy stocks helped to lead the way higher on the day, benefiting from a continued increase by the price of crude oil. Crude for July delivery jumped $1.53 to $33.49 a barrel, moving higher for the fifth straight session.

Reflecting the strength in the energy sector, the Philadelphia Oil Service Index spiked by 6.4 percent, the NYSE Arca Oil Index soared by 4 percent and the NYSE Arca Natural Gas Index surged up by 2.7 percent.

Significant strength was also visible among semiconductor stocks, as reflected by the 3.7 percent jump by the Philadelphia Semiconductor Index. The index ended the session at a three-month closing high.

Transportation, financial, networking and computer hardware stocks also saw considerable strength, while gold stocks were among the few groups to buck the uptrend despite an increase by the price of the precious metal.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Wednesday. Japan’s Nikkei 225 Index climbed by 0.8 percent, while China’s Shanghai Composite Index fell by 0.5 percent.

Meanwhile, the major European markets all moved to the upside on the day. While the German DAX Index surged up by 1.3 percent, the U.K.’s FTSE 100 Index jumped by 1.1 percent and the French CAC 40 Index advanced by 0.9 percent.

In the bond market, treasuries moved higher following the Treasury Department’s first auction of twenty-year bonds since 1986. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 3.1 basis points to 0.680 percent.

Looking Ahead

The Labor Department’s weekly jobless claims report is likely to attract attention on Thursday, potentially overshadowing reports on Philadelphia-area manufacturing activity, existing home sales, and leading economic indicators.

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U.S. Stocks Moving Sharply Higher In Morning Trading

Stocks have moved sharply higher over the course of morning trading on Wednesday, offsetting the pullback seen in the previous session. With the strong upward move, the Nasdaq and the S&P 500 have reached their best intraday levels in well over two months.

Currently, the major averages are hovering near their best levels of the day. The Dow is up 393.14 points or 1.6 percent at 24,600.00, the Nasdaq is up 172.61 points or 1.9 percent at 9,357.72 and the S&P 500 is up 50.24 points or 1.7 percent at 2,973.18.

The rally on Wall Street partly reflects continued optimism about an economic recovery as states begin to reopen following the coronavirus-induced lockdowns.

Early indications suggest the states that have reopened have not seen a spike in coronavirus cases, which has led to hopes the economy may rebound more quickly than many economists predict.

Meanwhile, traders have largely shrugged off a report raising doubts about Moderna’s (MRNA) potential coronavirus vaccine.

The report from STAT News questioned the validity of the results of Moderna’s vaccine trial that had sent stock markets soaring on Monday.

Positive sentiment was also generated in reaction to earnings news from Lowe’s (LOW), with the home improvement retailer seeing modest strength after reporting first quarter results that exceeded analyst estimates on both the top and bottom lines.

Energy stocks are turning in some of the market’s performances on the day, benefiting from a continued increase by the price of crude oil. Crude for July delivery is jumping $1.39 to $33.35 a barrel, moving higher for the fifth straight session.

Reflecting the strength in the energy sector, the Philadelphia Oil Service Index and the NYSE Arca Natural Gas Index have both surged up by 4.3 percent and the NYSE Arca Oil Index has jumped by 4.2 percent.

Substantial strength has also emerged among transportation stocks, as reflected by the 4.1 percent spike by the Dow Jones Transportation Average.

Semiconductor, financial, steel and chemical stocks are also seeing considerable strength, moving higher along with most of the other major sectors.

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Wednesday. Japan’s Nikkei 225 Index advanced by 0.8 percent, while China’s Shanghai Composite Index fell by 0.5 percent.

Meanwhile, the major European markets have all moved to the upside on the day. While the German DAX Index has jumped by 1.1 percent, the U.K.’s FTSE 100 Index is up by 0.7 percent and the French CAC 40 Index is up by 0.5 percent.

In the bond market, treasuries have shown a lack of direction over the course of the morning. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by less than a basis point at 0.714 percent.

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Major Averages Remain Mixed In Mid-Day Trading

After moving in opposite directions early in the session, stocks continue to turn in a mixed performance in mid-day trading on Tuesday. Despite the choppy trading, the tech-heavy Nasdaq has reached its best intraday level in nearly three months.

While the S&P 500 have joined the Nasdaq in positive territory, the Dow is currently posting a modest loss. The Dow is down 33.38 points or 0.1 percent at 24,563.99, but the Nasdaq is up 56.80 points or 0.6 percent at 9,291.63 and the S&P 500 is up 3.40 points or 0.1 percent at2,957.31.

The mixed performance on Wall Street comes as traders take a breather following yesterday’s rally, which lifted the Nasdaq and the S&P 500 to their best closing levels in well over two months.

Traders have recently expressed considerable optimism about the economy reopening, although lingering concerns about the coronavirus pandemic may be leading to some caution.

The markets are also reacting to the latest earnings news from big-name companies like retail giants Walmart (WMT) and Home Depot (HD).

Shares of Walmart have moved higher after the company reported better than expected first quarter results, while shares of Home Depot have moved to the downside after the home improvement retailer reported weaker than expected first quarter earnings.

On the U.S. economic front, the Commerce Department released a report showing another steep drop in new residential construction in the U.S. in the month of April.

The report said housing starts plummeted by 30.2 percent to an annual rate of 891,000 in April after tumbling by 18.6 percent to a revised 1.276 million in March.

Economists had expected housing stocks to plunge by 23.8 percent to a rate of 927,000 from the 1.216 million originally reported for the previous month.

The Commerce Department said building permits also slumped by 20.8 percent to an annual rate of 1.074 million in April after falling by 5.7 percent to a revised 1.356 million in March.

Building permits, an indicator of future housing demand, had been expected to nosedive by 26.1 percent to a rate of 1 million from the 1.353 million originally reported for the previous month.

Sector News

Most of the major sectors are showing only modest moves on the day, although substantial strength remains visible among gold stocks.

Reflecting the strength in the gold sector, the NYSE Arca Gold Bugs Index is up by 3.4 percent after reaching a seven-year intraday high earlier in the session.

The rally by gold stocks comes amid a rebound by the price of the precious metal, as gold for June delivery is climbing $9.10 to $1,742.70 an ounce after tumbling $21.90 to $1,734.40 an ounce in the previous session.

Computer hardware and semiconductor stocks have also shown strong moves to the upside on the day, contributing to the advance by the tech-heavy Nasdaq.

On the other hand, oil service stocks continue to see considerable weakness in mid-day trading, dragging the Philadelphia Oil Service Index down by 2.8 percent.

The weakness among oil service stocks comes as the price of crude oil has turned lower over the course of the session, with crude for June delivery slipping $0.11 to $31.71 a barrel.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved sharply higher during trading on Tuesday. Japan’s Nikkei 225 Index jumped by 1.5 percent, while Hong Kong’s Hang Seng Index spiked by 1.9 percent.

Meanwhile, the major European markets ended the day mixed. While the German DAX Index edged up by 0.2 percent, the U.K.’s FTSE 100 Index and the French CAC 40 Index fell by 0.8 percent and 0.9 percent, respectively.

In the bond market, treasuries are regaining ground after moving sharply lower in the previous session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 3.3 basis points at 0.711 percent.

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US stocks drop on simmering US-China trade tensions

US stock indexes dropped on Friday as Sino-US tensions weighed on markets struggling to gauge the pace of economic recovery from the coronavirus.

President Donald Trump’s statement on China’s plan for a national security law in Hong Kong on Thursday raised concerns over Washington and Beijing possibly reneging on their Phase-1 trade deal.

Fears of a renewed trade war cut short Wall Street’s April rally that was powered by optimism over a potential COVID-19 vaccine and the U.S. economy gradually emerging from the lockdowns.

The three main US stock indexes have kept to a tight range in May, but are still on course for weekly gains between 2.5 percent and 2.8 percent.

“It’s a bit of a push-pull as there’s some positive news from a healthcare perspective at least, but then we also have the rhetoric ramping up with China,” said Paul Nolte, portfolio manager at Kingsview Asset Management in Chicago.

“Investors may be a little bit nervous, may pull in their horns ahead of a three-day weekend.”

At 11:23 a.m. ET, the Dow Jones Industrial Average was down 137.22 points, or 0.6 percent, at 24,336.90, the S&P 500 was down 9.8  points, or 0.3 percent, at 2,938.76 and the Nasdaq Composite was down 18.07 points, or 0.2 percent, at 9,266.81.

Eight of the 11 major S&P 500 sub-indexes were trading lower, led by energy as oil prices sank 5 percent.

Real Estate stocks were up in some defensive plays, while losses were limited in the consumer staples sector.

Mixed retail earnings from Walmart, Best Buy and Home Depot earlier in the week had shown online shopping gaining traction due to the stay-at-home orders, a trend that could damage brick-and-mortar players.

On Friday, Chinese e-commerce giant Alibaba reported better-than-expected quarterly profit, but its shares slipped 4.4 percent. Smaller rival Pinduoduo’s US-listed shares gained 9.6 percent after posting upbeat earnings report.

Hewlett Packard Enterprise fell 11.5 percent after missing second-quarter revenue and profit estimates, hit by global lockdowns since February.

Data analytics software maker Splunk rose 10.7 percent after saying it expects higher demand for its cloud services as people around the world take to working from home.

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Cannabis stocks soar on hopes pot wards off coronavirus

Cannabis company stocks are skyrocketing as investors are high on new hopes that marijuana might help ward off the deadly coronavirus.

Shares in major pot firms climbed in late trading Thursday after The Post reported on a Canadian study showing that certain strains of cannabis may help prevent COVID-19 from entering host cells.

Canadian pot giant Canopy Growth Corporation saw its stock jump 7.8 percent to close at $18.25 thanks to a spike in the final hour of trading. The shares had climbed another 0.5 percent in premarket trading Friday to $18.34 as of 9:19 a.m.

British Columbia-based Tilray’s shares also surged late to close up nearly 20 percent at $9.65, followed by a roughly 2 percent jump before Friday’s opening bell.

The ETFMG Alternative Harvest ETF, an exchange-traded fund that targets the global cannabis industry, ended Thursday up 6 percent at $13.47 and climbed another 1.3 percent in premarket trading Friday.

And shares in Alberta-based Aurora Cannabis got a late boost to close up more than 36 percent Thursday at $17.40 after it announced it was buying American CBD firm Reliva. The stock was recently down 7.4 percent in premarket trading after Jeffries analysts reportedly cast doubt on the company’s short-term strength.

The research inspiring the boost showed that at least 13 cannabis plants could block proteins that create a “gateway” for the new coronavirus to enter host cells. The strains are all high in CBD — the anti-inflammatory found in some consumer products — and low in THC, the psychoactive component of pot, according to the findings.

But the study published in the online journal Preprints has not yet been peer-reviewed. It was carried out by cannabis research firms Pathway Rx and Swysh Inc.

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Bank Stocks Sputter Even After Powell Downplays Negative Rates

Jerome Powell’s warning that the U.S. economy faces unprecedented risks tanked bank stocks even after the Federal Reserve head pushed back against negative interest rates.

The Fed chairman said policy makers weren’t looking to follow other central banks into negative rates policy, batting down growing speculation in the futures market. However, shares of financial companies still fell as much as 5% on Wednesday, outpacing the broader S&P 500 Index’s 2% drop, after Powell cautioned that the economy’s recovery from the coronavirus “may take some time” to gather momentum.

Powell’s caution on the recovery outweighed the relief financial stocks may have enjoyed from policy makers downplaying negative rates, according to Miller Tabak + Co. The ensuing risk-off sentiment, along with an increase in tensions with China drove down shares in cyclical sectors such as energy, automobiles and consumer durables. Tech and health-care stocks had the smallest declines, continuing a trend of outperformance.

“A very weak economy is bad for the banks even if we do not see negative interest rates,” said Matt Maley, an equity strategist at Miller Tabak. “Investors are worried about buying stocks in a broad manner due to the economy, so they continue to put money in the stocks of companies that seem recession proof in this unique recession.”

State Street’s SPDR S&P Regional Banking ETF, ticker KRE, tumbled as much as 6.8%.

Investors had been speculating that the Fed might lower rates into negative territory to cushion the virus outbreak’s economic blow. While Powell stopped short of ruling the tool out as an option, he said the policy is “not something that we’re considering.” Traders of fed funds futures pushed bets on a negative policy rate into next year after Powell’s comments.

Commercial banks are charged interest on their deposits at the Fed in a negative rate environment, weighing on their profitability. But despite Powell’s push back on the policy, concerns over an extended economic downturn are dragging down financials and real estate stocks, according to Evercore ISI.

“Banks/REITS have the same issues to deal with which is the potential for an extended period of very high unemployment that leads to a bankruptcy,” wrote Evercore strategist Dennis DeBusschere in a note.

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