Dow tumbles as coronavirus and tariffs rattle investors: June 24, 2020

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2:26 p.m. ET, June 24, 2020

Senators urge companies to stop dividend payments during pandemic

From CNN Business' Anneken Tappe

A group of US Senators, led by Democrat Brian Schatz of Hawaii, want America's banks to stop paying dividends during the pandemic recession. The goal is to ensure they are able to absorb losses they might face.

The senators, which included Massachusetts Senator Elizabeth Warren, also urged the Federal Reserve in a letter to make sure the banks held enough capital to continue lending to struggling businesses.

The results of the Fed's bank stress test, which assesses their capital buffers during crises, are due tomorrow.

“Our economy needs a safe and sound banking system to serve as a source of strength through these difficult times,” the senators wrote in their letter Wednesday

This isn't the first call for banks to stop paying out dividends. Former Fed Chair Janet Yellen is also in favor of a pause given the uncertainty the economy is facing.

The Covid-19 recession has made many businesses reliant on credit lines after the economy shut down in the spring to stop the spread of the virus.

2:00 p.m. ET, June 24, 2020

Royal Caribbean, Carnival and Norwegian plunge

From CNN Business' Paul R. La Monica

Carnival, Royal Caribbean and Norwegian were the three worst-performing stocks in the S&P 500 Wednesday. Shares of each cruise company plunged about 10% as the broader market slid due to concerns about an increase in Covid-19 cases in several states.

But the cruise companies had their own company-specific reasons to explain the drops.

Carnival (CCL), which reported a $4.4 billion quarterly loss last week, had its credit rating cut to junk status by Standard & Poor's late Tuesday. Moody's had already slashed Carnival's bond to below investment grade levels. Meanwhile, analysts at Barclays downgraded shares of Royal Caribbean (RCL) and Norwegian (NCLH) Wednesday to "equal weight" - essentially a lukewarm neutral rating.

In its report, S&P said that it expects "Carnival's credit measures to remain very weak through 2021 because of its plans for a gradual reintroduction of capacity and our forecast for continued weak demand." 

The future for cruise companies remains highly uncertain. It's not clear when they will resume voyages -- or even whether consumers will feel comfortable booking any trips. As a result, shares of Carnival and Royal Caribbean have each plummeted more than 60% this year while Norwegian has lost nearly three quarters of its market value in the same period.

Norwegian said last week it was canceling cruises that were tentatively planned for later this summer and will extend the suspensions through September.

1:07 p.m. ET, June 24, 2020

Stocks are unlikely to fall to March-lows: Mohamed El-Erian

From CNN Business' Anneken Tappe

Four items of bad news are weighing on the market today, says Mohamed El-Erian, chief economic adviser at Allianz: The IMF's lower growth forecast, rising Covid-19 infections, proposed tariffs on $3.1 billion worth of EU imports, and a mandatory quarantine for anyone coming from high-infection rate states to New York, New Jersey or Connecticut.

"All this speaks to a weaker economy," El-Erian told Alison Kosik on the CNN Business' digital live show Markets Now.

That said, stocks are unlikely to retest the lows they hit in March, he said. With monetary and fiscal stimulus in high gear already, there is a backstop to the economy.

The Federal Reserve has moved to buy non-traditional assets including high yield bonds. Some are wondering whether the central bank will go as far as buying stocks to stabilize the market, but El-Erian believes this is unlikely.

Even the step to buy high yield bonds was still a bit of a head-scratcher because the long-term effects of such unprecedented steps are uncertain, he said.

1:00 p.m. ET, June 24, 2020

Slack is flourishing even though it's a "time of turbulence"

From CNN Business' Anneken Tappe

Millions of Americans have been working from home for months as the coronavirus pandemic has shut down work life as we knew it.

In this new normal, messaging and conferencing companies like Slack (WORK) and Zoom (ZM) are flourishing because they're ever more necessary. Slack's revenues grew more than 50% in the last quarter.

That said, companies are struggling with an unprecedented economic environment.

"We don’t want global pandemics but it is accelerating a shift to digital transformation," said Slack CEO Stewart Butterfield on the CNN Business' digital live show Markets Now.

"It's really a time of turbulence, he added. There is a "strong tail wind on one side, strong head wind on the other."

The company is now launching "Slack Connect", which allows different companies to communicate with each other using its channel-based platform, which is traditionally used for internal communications only.

"I think it will be a big step forward for how corporations communicate but also for security," Butterfield said.

12:09 p.m. ET, June 24, 2020

'Sell stocks. The economy is going down,' says MUFG economist

From CNN Business' Anneken Tappe

The stock market doesn't like the escalation of Covid-19 infections across America's Southern states one bit. New York, New Jersey and Connecticut will require anyone coming from areas with high infection rates to quarantine for 14 days. This doesn't bode well at all for the reopening of the economy.

The Big Apple is going to turn into a rotten apple for tourism if visitors are forced to quarantine and this travel restriction shows the second wave of coronavirus cases is putting its foot down hard on the economic recovery which looks more and more dicey by the day. Sell stocks. This economy is going down," said Chris Rupkey, chief financial economist at MUFG.

While investors initially worried about a second wave of infections in the fall, it seems these concerns could actually dominate the summer.

11:52 a.m. ET, June 24, 2020

Stocks tumble: Dow plummets more than 800 points

From CNN Business' Anneken Tappe

The Dow has now fallen more than 800 points, or 3.1%.

Investors are clearly downcast today.

The S&P 500 is down 2.9% and the Nasdaq Composite is down 2.6%.

As Covid-19 infections rise across some states, New York, New Jersey and Connecticut announced people coming from areas with high infection rates have to quarantine for 14 days.

11:42 a.m. ET, June 24, 2020

Dollar climbs higher on stock slide

From CNN Business' Anneken Tappe

Riskier investments like stocks are taking a nosedive today, but on the other end of the spectrum, safe haven bets are enjoying increased demand.

The US dollar, which has fully established its role as a safe haven currency during the US-China trade war, is up against most of its rivals today. The ICE US Dollar Index climbed 0.5% just before midday.

The euro, which is the dollar's main rival, and the British pound have been hit particularly hard by the greenback's climb.

One euro last bought $1.13, down 0.3%, while sterling fetched $1.24, down 0.8%.

11:24 a.m. ET, June 24, 2020

Millions more jobless claims expected tomorrow

From CNN Business' Anneken Tappe

It's a quiet day on the US economic calendar today, but we won't be so lucky tomorrow.

Another 1.3 million first-time claims for unemployment benefits are expected in tomorrow's Labor Department report -- the 12th-straight week that initial claims are falling. That's not necessarily good news, given that they remain above the 1 million mark. Until the coronavirus pandemic, there has never been such an onslaught of claims in so short a time period.

Continued claims, which count people who have filed for unemployment benefits for at least two weeks in a row, are expected to number just below 20 million, a slight decline from the prior week's 20.5 million.

The story in claims remains the same: while we are seeing improvement it will be a long road to recovery.

In addition to the jobless claims, the Bureau of Economic Analysis will publish its final reading of first quarter gross domestic product. In May, the GDP drop between January and March was revised down to 5% from a 4.8% decline in a preliminary report. No further revisions are expected in tomorrow's final reading.

11:23 a.m. ET, June 24, 2020

No end to the selloff: Dow slides more than 600 points

From CNN Business' Anneken Tappe

If you blink, you'll miss it!

Stocks continue on their downward spiral as we're approaching midday. The catalysts remain the same, but the selloff has worsened.

The Dow plummeted 645 points, or 2.5%, while the S&P 500 is down 2.4%.

The Nasdaq Composite fell 2.1%.

It's shaping up to be the worst day for stocks in about two weeks.