Stocks try to keep the rally going: June 17, 2020

By CNN Business

Updated 6:20 p.m. ET, June 17, 2020
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5:06 p.m. ET, June 17, 2020

Dow and S&P 500 snap three-day winning streak

From CNN Business' Anneken Tappe

US stocks finished mixed on Wednesday, with the Dow and the S&P 500 closing lower. Both indexes snapped a three-day winning streak.

Momentum that had carried the stock rally over the past days faded Wednesday as the number of new Covid-19 infections rose in some areas.

The Dow fell 0.7%, or 170 points, and the S&P 500 ended down 0.4%.

The Nasdaq Composite was the only of the three main indexes to end the day higher, adding 0.2%. It was its fourth day of gains in a row.

4:02 p.m. ET, June 17, 2020

Hertz puts controversial stock sale on hold after SEC review

From CNN Business' Paul R. La Monica

Bankrupt rental car company Hertz (HTZ) had a highly unusual plan to raise money: Last week it said it was hoping to sell stock, even though shares could soon be delisted and eventually turn out to be worthless.

But the Securities and Exchange Commission has apparently put the kibosh on that.

Hertz, whose shares were halted just before noon for pending news, revealed in a regulatory filing late Wednesday afternoon that the SEC's Division of Corporation Finance told the company Monday about plans to review the offering.

Hertz "promptly suspended" the stock sale "pending further understanding of the nature and timing of the [SEC] review," the company said in its filing.

The stock was down slightly before it was halted, and it was flat in choppy action after trading resumed right before the closing bell.

Hertz has been an extremely volatile stock since the company filed for Chapter 11 protection in late May, but shares are still higher than where they were shortly after it went bankrupt.

Hertz is just one of several bankrupt companies whose shares have surged recently -- a curious phenomenon that some fear is a sign that speculative investors are embracing too much risk.

3:05 p.m. ET, June 17, 2020

Nasdaq clings to gains in the afternoon

From CNN Business' Anneken Tappe

With only an hour left in the trading day, the Nasdaq Composite is the only major index solidly on track for another day of gains. It will be its fourth up day in a row.

The S&P 500 is flat, and the Dow, which briefly fell into negative territory earlier in the day, is back in the red, down 0.2%, or 54 points.

The market lost momentum today, amid rising Covid-19 infections across the country that could jeopardize the reopening of the economy.

1:18 p.m. ET, June 17, 2020

Underestimating the virus is a major risk: JPMorgan chief strategist

From CNN Business' Anneken Tappe

Stocks are back in the green in the early afternoon, reversing earlier losses and on track for a fourth day of gains. Some better-than-expected economic data has spurred hopes that the reopening of the economy is going better than anticipated.

Not so fast.

The market is becoming complacent, warned JPMorgan Asset Management chief global strategist David Kelly on the CNN Business' digital live show Markets Now.

"The biggest concern is that we don't take the virus seriously enough," Kelly told host Alison Kosik. Eventually there will be a vaccine, but it's unclear when. Until then, America needs to be patient, although it's not her foremost virtue, Kelly said.

And as the economy begins to reopen, activity will remain restricted for many businesses, Kelly said.

"I think we'll still go into 2021 with double digit unemployment numbers," he said.

Finally, the long-term implications of the trillions of stimulus unleashed to help the economy are incalculable, which in itself is a risk, Kelly said.

1:00 p.m. ET, June 17, 2020

Cannabis sales grew during the pandemic: Curaleaf CEO

From CNN Business' Anneken Tappe

The Covid-19 pandemic has put the nation under intense stress. But for companies offering products that attempt to relieve the pressure, this has been a fruitful business environment.

"Ironically, sales have never been stronger for cannabis," said Joe Lusardi, CEO of cannabis business Curaleaf (CURLF).

Higher anxiety leels, sleeplessness and stress across the country are helping sales, which is a "silver lining" during the pandemic, Lusardi told Alison Kosik on the CNN Business digital live show Markets Now.

"I've never felt better about where we are as a company and as an industry," he said.

That said, the company's stock has fallen more than 13% this year.

But Lusardi is confident that the industry will keep growing with legalization pushing forward in many states and more jobs being created as a result.

12:45 p.m. ET, June 17, 2020

Powell thinks Washington might need to do more. He's not alone

From CNN Business' Anneken Tappe

Federal Reserve Chairman Jerome Powell has repeatedly said that both the central bank and the government might need to do more to get the economy through the pandemic recession.

He's hardly the only one.

Yesterday, more than 100 economists, including former Fed Chairman Ben Bernanke and Powell's direct predecessor Chairwoman Janet Yellen, sent a letter urging Congress to pass a “multifaceted relief bill of a magnitude commensurate with the challenges our economy faces.”

Congress and the Fed have already provided unprecedented levels of stimulus to the economy, but the economists think more will be needed to avoid prolonged suffering across the United States -- in particular for Black, Latinx and Native American communities, which have been disproportionately affected by the pandemic and the economic fallout.

12:28 p.m. ET, June 17, 2020

Fed Chairman Powell is back on the Hill... virtually

From CNN Business' Anneken Tappe

Federal Reserve Chairman Jerome Powell is talking to Congress once again today. After testifying before the Senate Banking Committee on Tuesday, Powell will testify before the House Committee on Financial Services today.

During Tuesday's hearing Powell echoed the sentiment of last week's monetary policy update, saying uncertainty remains high -- and that a full recovery from the pandemic recession is unlikely until the public is fully confident that Covid-19 is contained.

11:49 a.m. ET, June 17, 2020

Millions more jobless claims are expected tomorrow even as economic data is improving

From CNN Business' Anneken Tappe

Over the past few weeks, US economic data reports have been significantly better than expected. The May jobs report was far better than economists predicted, so were yesterday's retail sales. It seems that the economy is turning a corner.

Even so, millions more jobless claims are expected in tomorrow's Department of Labor data.

Another 1.3 million Americans are expected to have filed for first-time unemployment benefits last week, down from 1.5 million in the week before that. Initial claims have been falling every week since peaking at 6.9 million in the last week of March. Economists think this means that most job losses due to the pandemic are behind us.

Continued claims, meanwhile, which count people who have filed for benefits for at least two weeks in a row, remain high -- they have been above 20 million since mid-April. Experts are looking for this number to come down substantially over the summer. If it doesn't, it could mean that the labor market recovery is much slower than hoped.

The number of continued claims is expected to slip to 19.8 million in tomorrow's report.

11:47 a.m. ET, June 17, 2020

DraftKings will sell more shares after stock surges

From CNN Business' Paul R. La Monica

There is no definite timeline for when the baseball season will finally start. And it's unclear if the reports that players for the Dallas Cowboys and Houston Texans have tested positive for Covid-19 will jeopardize the kickoff of NFL games this fall. But fantasy sports and gambling company DraftKings (DKNG) is thriving -- and it's cashing in on this success.

DraftKings announced late Tuesday that it plans to sell 33 million shares in a secondary offering. The company is issuing 14 million of the shares and existing investors are selling the remaining 19 million.

Companies often sell more shares following their Wall Street debuts -- especially if the stock has done well. And DraftKings has been a home run/slam dunk/touchdown (or pick your other favorite sports cliche of choice) since the company went public through a merger with a special purpose acquisition company in April.

Shares of DraftKings are up nearly 130% since they began trading. The stock rose about 1% Wednesday -- even though investors often worry that new stock sales will dilute the value of existing shareholders. DraftKings said last month that sales in the first quarter rose 30% from a year ago as gamblers bet on events such as virtual NASCAR races and esports tournaments.