June gains continue, airlines jumping again, oil 3-month high

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The New York Stock Exchange (NYSE) stands in lower Manhattan on May 18, 2020 in New York City. Markets surged today as promising details of a potential COVID-19 vaccine were released and more European countries gradually re-opened after months of lockdown.

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10:55 am: Market rising without the help of big tech

The biggest tech and internet companies, which had led the market comeback over the past two months, underperformed on Tuesday as investors focus on the economic reopening and rotate out of the stay-at-home plays. Shares of Amazon dipped 0.8%, while Facebook fell 1.7%. Apple, Netflix, Microsoft and Alphabet all came under pressure on Tuesday, weighing on the Nasdaq Composite, which was down 0.3%. The tech-heavy benchmark has outpaced the S&P 500 so far this year, rising about 6% in 2020 and sitting just 3% below its record high.–Li

10:40 am: Cramer explains ‘backyard trade,’ Wayfair shares soar

Wayfair’s stock has jumped more than 12% in early trading after Piper Sandler raised its price target on the stock and CNBC’s Jim Cramer said the company was part of a ‘backyard trade’ created by the coronavirus pandemic. The shift toward more outside activities because of the pandemic has “rescued” Wayfair, Cramer said on “Squawk on the Street.” —Pound

10:35 am: Mall operators jump on hopes of reopening

As parts of the U.S. start to reopen, shares of shopping center and mall operators jumped on Tuesday. Vornado Realty rose more than 3%. Federal Realty and SL Green Realty gained 4.9% and 4.3%, respectively. Mall operator Simon Property Group also ticked up more than 3.5%. — Fitzgerald 

10:23 am: Banks rise in catch up trade as investors look to reopenings

The financials are helping to lead gains as the lagging sector continues to draw in new money. Big banks like JPMorgan, Citigroup and Wells Fargo were all higher. Other financial plays like Visa and Mastercard were also rising. The S&P financial sector was up 1.2% Tuesday morning, the third best performing major sector after energy and materials.  Year-to-date, the sector is the second worst, down 22%. Financials have been getting a lift as investors trade away from technology and look for beaten down areas that would be helped by an improving economy. —Domm

10:17 am: Lowe’s hits all-time high

Shares of Lowe’s rose more than 2% on Tuesday, to hit a new all-time intraday high. The company has benefited from strength in the housing industry as states around the country begin to reopen their economies, as well as recent data that’s shown a greater-than-expected number of people buying houses. The iShares U.S. Home Construction ETF (ITB) has gained more than 50% this quarter, putting it on track for its best quarter on record. – Stevens

10:13 am: Western Union surges 12% on MoneyGram takeover offer

Shares of Western Union jumped more than 12% on Tuesday after a Bloomberg News report said the provider of money-transfer services has made a takeover offer for peer MoneyGram. The deal could combine two of the largest U.S. players in the space. No decision has been made, the report said. The news sent MoneyGram shares surging more than 30% in morning trading on Tuesday. – Li

10:11 am: GDP to plunge 52.8% in the second quarter, Atlanta Fed says

U.S. economic activity contracted by more than half due to efforts to contain the coronavirus, according to the Atlanta Fed’s GDPNow gauge. The tracker is now estimating second-quarter GDP to shrink by 52.8% following data Monday showing a continued decline in manufacturing. One upside to the plunge could be a stronger rebound in the short term, said Ed Yardeni of Yardeni Research. He is projecting a 20% GDP surge in the third quarter and another 5% in Q4, followed a slower “swoosh” pattern after that. – Cox

10:10 am: Uber-Grubhub deal talks continuing with progress reportedly being made

Talks between Uber and Grubhub are ongoing, and progress is being made on the possible merger of the two companies, CNBC’s David Faber has learned. Uber first made an offer to buy the food delivery company in May, and as talks continue, people familiar with the matter said that Grubhub is focused on protecting its business during  what could be a potentially long anti-trust review. The price expectations have narrowed, according to those familiar with the matter, and the two companies seem to be getting closer to a ratio that would be agreeable to both. – Stevens 

10:06 am: Dick’s Sporting Goods says e-commerce sales more than doubled in the first quarter 

Shares of athletic retailer Dick’s Sporting Goods jumped more than 3% on Tuesday after the company said its e-commerce sales more than doubled in the first quarter. The online sales were a bright spot amid Covid-19 related store closures.  Dick’s added that the current quarter has gotten off to a strong start. The company, however, reported dismal quarterly results. Dick’s lost $1.71 per share, wider than the 57 cent loss expected on Wall Street, according to Refinitiv. Revenue and comparable-store sales also missed estimates. —Fitzgerald 

9:40 am: Here are Tuesday’s biggest analyst calls of the day: Lululemon, Microsoft, Goldman Sachs & more

  • Wells Fargo downgraded Lululemon to equal weight from overweight.
  • Cowen initiated Slack as outperform.
  • Deutsche Bank reinstated LabCorp and Quest Diagnostics as buy.
  • Wells Fargo raised its price target on Goldman Sachs to $230 from $198.
  • JPMorgan named Sirius XM a top pick.
  • Deutsche Bank raised its price target on PayPal to $183 from $147.
  • Wells Fargo raised its price target on Microsoft to $250 from $205.
  • Odeon Capital upgraded Citi to buy from hold. 

Pro Subscribers can read more here. — Bloom

9:30 am: Stocks open higher, Dow up 100 points

U.S. equities opened in the green on Tuesday as investors continued to pile into riskier assets as the economy tried to reopen. The Dow Jones Industrial Average rose more than 130 points at the opening bell. The S&P 500 and Nasdaq Composite gained 0.3% and 0.1%, respectively. — Fitzgerald 

8:45 am: Large IPOs pricing this week after market rebound

There are multiple IPOs expected to raise roughly $1 billion or more this week as the market rebound and lower volatility has made companies and investors more confident in going public. The last U.S. IPO to raise more than $1 billion was GFL Environmental, which debuted on March 3, according to the Nasdaq’s website.Warner Music Group, whose offering will be priced tonight, will trade on the Nasdaq under the ticker WMG, and has an estimated pricing range of $23 to $26 per share, according to securities filings. ZoomInfo will also trade on the Nasdaq, under the symbol NI. The expected pricing range is $19 to $20 per share, according to securities filings, and it is slated to begin trading on Thursday. —Pound

8:41 am: Microsoft jumps after Wells Fargo says market cap can top $2 trillion

Shares of Microsoft jumped nearly 1% in premarket trading on Tuesday after Wells Fargo said it believes Microsoft’s market capitalization can top $2 trillion in the next few years due to strength in its cloud business. The Wall Street firm — which has an overweight rating on the Satya Nadella technology giant — said the coronavirus “has created a Zeitgeist moment for the cloud as a whole,” and Microsoft’s Azure is poised to benefit. With growth in cloud revenue, Microsoft’s market capitalization can reach $2.2 trillion by 2023, the firm said. Wells Fargo has an overweight rating on the stock and hiked hiked its 12-month price target on Microsoft to $250 per share from $205 per share. —Fitzgerald

8:09 am: U.S. equities see back-to-back weekly inflows, BofA says

Bank of America said in a note that its clients were net buyers of stocks for a second week in a row as investors plowed money into ETFs. Overall, clients increased their exposure to stocks by $60 million in assets as ETFs had an inflow of $1.044 billion, offsetting the sale of single-stock holdings. —Imbert, Bloom

8:02 am: Reopening stocks head higher

7:45 am: Oil hits highest level in nearly three months

Oil moved higher on Tuesday, ahead of the meeting between OPEC and its oil-producing allies, where the current production cut policy will be discussed. West Texas Intermediate, the U.S. oil benchmark, rose 3% to hit $36.51 per barrel, its highest level since March 6. Meanwhile international benchmark Brent crude rose to $39.55, a level not seen since March 11. “OPEC+ cuts are clearly working with solid help from recovering crude oil demand, especially in Asia. An extension of the current cut levels will definitely be a further boost for the market. Not only will the market rebalance, but stock builds of oil will also feel some relief. Prices rise on this prospect and are set for higher levels if the cuts are indeed extended,” said Bjornar Tonhaugen, head of oil markets at Rystad Energy. “Bottom line is that the market is on a recovery path. If OPEC+ extends the high-level oil production cuts, that recovery will speed up and prices won’t lag behind.” —Stevens

7:47 am: Slack jumps after Cowen rates stock as outperform

Shares of Slack rose 3.8% in premarket trading after Cowen initiated the stock with an outperform rating and a $45 price target. The price target is 21% above where trading closed on Monday. The firm said in a note that the shift to working from home during the pandemic has expanded the potential market for Slack and that Wall Street is overly worried about competition from Microsoft Teams. Slack is set to report its fiscal first quarter results after the bell on Thursday.  —Pound

7:35 am: Zoom moving higher ahead of earnings

Shares of Zoom Video gained 3% during Tuesday’s premarket trading, ahead of the company’s first quarter earnings results, which will be released after the market closes. According to estimates from FactSet, analysts are expecting the company to earn 9 cents per share, on $202.3 million in revenue. The stock gained 13.75% on Monday, hitting a new all-time high, and breaking above $200 for the first time. The video-conferencing company has seen its user base jump amid the coronavirus pandemic, and shares have gained 200% this year. –Stevens

7:34 am: Dow futures gain more than 100 points as Wall Street focuses on economy reopening

Stock futures rose on Tuesday morning as traders focused on the economic reopening and looked past the civil unrest in the U.S. Stocks that would benefit from the economic restart — such as airlines, cruise lines, some retailers and banks — led the early gains. The market has largely ignored the unrest across the U.S. However, that could change if traders believe protest could continue through the summer, potentially hurting the reopening and dampening consumer confidence. —Imbert

—With reporting from Maggie Fitzgerald, Yun Li and Jeff Cox. 

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