Stock market live updates: Dow down 2%, Powell sees risks, Tepper's warning - CNBC

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Stocks moved lower on Wednesday after Federal Reserve Chairman Jerome Powell took a cautious stance on the state of the economy. The central bank chief said that while a recovery will come, it may be slower than expected.

This is a live blog. Here's the latest:

12:09 pm: Tepper says market is overvalued

11:54 am: Markets at midday: Stocks head for back-to-back losses

The major averages were headed for another day of sharp losses on Wednesday as worries over the economy reopening sent the market tumbling. The Dow traded 450 points lower, or 1.9%. The S&P 500 slid 1.6% while the Nasdaq dropped 1.5%. Comments from Fed Chairman Jerome Powell also hurt market sentiment. —Imbert

11:33 am: Gasoline demand rises

Gasoline demand continues to bounce from the March low as states begin to reopen their economies. The U.S. Energy Information Administration said Wednesday that for the week ending May 8 demand jumped to 7.5 million barrels per day up from 6.7 million bpd the prior week. This is about 50% higher than the March low of 5.1 million bpd, but is still significantly below last year's average of 9.4 million bpd for this time of year. – Stevens, Domm

10:49 am: CFRA downgrades Beyond Meat to sell from hold

CFRA downgraded shares of Beyond Meat to sell from hold, mainly on valuation concerns. "We think much of BYND's 40%+ appreciation over the last week is speculation of a meat shortage spurring demand for plant-based meat. We think a meat shortage, if any, will be short-lived since 1) plants are reopening with help from the federal government; 2) plants are switching production from foodservice to retail; and 3) cold-storage protein reserves are near record levels," the firm said. The red-hot stock is up 8% this week and over 90% this year. - Bloom

10:32 am: GE falls below financial crisis low

General Electric's stock fell more than 4% during trading, dropping below $5.73 a share — the lowest level it hit during the financial crisis in 2009. The troubled industrial conglomerate saw a steep decline in first-quarter revenue due to the coronavirus pandemic and warned shareholders last month that it expects to take an even worse hit during the second quarter. - Sheetz

10:29 am: Nasdaq resumes leadership as tech outperforms

The tech-heavy Nasdaq was the only major index in the green in early trading, gaining roughly 0.2%, with Zoom and Netflix some of the biggest movers. Tech has been outperforming other sectors so far this year but fell in a late sell-off on Tuesday.

Bill Callahan, an investment strategist at Schroders, said the outperformance of tech could continue in the coming weeks until investors learn more about the impact of the pandemic on the sector. "As long as these companies continue to deliver on earnings, they will be fine. My big question will be Q2 earnings," Callahan said.

The market may be overconfident on some of these stocks, including those that rely on enterprise customers, Callahan said. "The question is will these companies be able to collect what they're owed from their customers and maintain their pricing power as their customers struggle. I'm not sure of the answer to that, but the implied price and multiple says that the market right now believes they will," Callahan said. — Pound

10:28 am: Bill Miller sticks by airline holdings, says not owning them is 'bet against the vaccine'

Legendary investor Bill Miller said Tuesday evening he was sticking by his investments in the airline industry despite the sharp drop in those stocks amid the coronavirus outbreak. "If you don't own the airlines, then you're making a bet against the vaccine," said Miller, founder and CIO of Miller Value Partners. "If there is a vaccine, that will eliminate all the issues people have about flying and these (stocks) will come back very, very quickly," Miller added. —Imbert

10:11 am: Morgan Stanley calls Adobe a 'steady ship in stormy seas'

Morgan Stanley reiterated its overweight rating on shares of Adobe Wednesday, saying it's the right stock at the right time. "In volatile environments, we favor owning the most durable EPS stories – where the business model and management commitment to sustaining (or improving) operating margins could enable profitability to better weather a difficult spending environment," analyst Keith Weiss said. The stock has gained more than 10% this year. - Bloom

9:57 am: Here are Wednesday's biggest analyst calls of the day: Norwegian, Beyond Meat, Peloton & more 

• JMP raised its price target on Peloton to $59 from $53.
• Argus raised its price target on Beyond Meat to $180 from $130.
• Jefferies initiated WW as a buy.
• Mizuho upgraded JD.com to buy from neutral.
• Stephens resumed coverage of Cheesecake Factory at underweight.
• Citi initiated a 90-day positive catalyst watch on Spirit Airlines.
• Wells Fargo downgraded Norwegian to equal weight from overweight.

CNBC PRO subscribers can read more here. - Bloom

9:31 am: Stocks open lower as Powell takes cautious tone

Stocks opened in the red on Wednesday following cautious remarks from Federal Reserve Chairman Jerome Powell. The Dow shed 122 points for a loss of 0.5%, while the S&P 500 lost 0.2%. The Nasdaq Composite bucked the trend to rise 0.15%. – Stevens

9:29 am: Powell knocks down idea of negative interest rates

9:27 am: Powell says recovery may come 'more slowly'

"There is a growing sense that the recovery may come more slowly than we would like, but it will. And that may mean that it's necessary for us to do more," Powell said. – Stevens

9:20 am: Powell says economy will 'substantially recover'

"It will take some time to get back to where we were. I have every reason to think we can get back there. The economy should substantially recover once the virus is under control," Powell said. – Stevens

9:18 am: Powell says unemployment rate will likely peak in the next month or so

"In terms of getting back, I would say that probably over the course of the next month or so, unemployment will peak. And then as we return to more normal levels of economic activity, it's a reasonable expectation that unemployment will start to decline again and it may decline sharply. But it's also likely to remain well above the levels that we saw earlier this year and all through 2019 and 18, which were 50-year lows in unemployment," Powell said. The unemployment rate jumped to 16% in April, topping the post-war record of 10.8%. – Stevens

9:15 am: Market reaction to Powell

Stock futures turned negative following the release of Fed Chair Powell's remarks. Dow futures were last down 15 points. The 10-year Treasury yield declined by 4 basis points to 0.65%. Gold jumped by 1% and the U.S. dollar declined versus major currencies. - Melloy

9:10 am: Powell says biggest future response may have to come from Congress

While the Fed continues efforts to prop up the economy, Powell said that the biggest future response may need to come from the government.  "Additional fiscal support could be costly, but worth it if it helps avoid long-term economic damage and leaves us with a stronger recovery. This tradeoff is one for our elected representatives, who wield powers of taxation and spending," he said.  - Cox

9:03 am: Powell says more policy help may be needed to pull the US out of economic downturn

Fed Chairman Jerome Powell said more measures likely will be needed to pull the economy out of its current downturn. "While the economic response has been both timely and appropriately large, it may not be the final chapter, given that the path ahead is both highly uncertain and subject to significant downside risks," Powell said in prepared remarks for a webcast event with the Peterson Institute for International Economics. - Cox

8:52 am: Druckenmiller says he doesn't like the way the market is set up

Legendary investor Stanley Druckenmiller told the Economic Club of New York on Tuesday night that stock market is historically overvalued and that the market is overreacting to news of progress on potential virus treatments, like Gilead's remdesivir. "The risk-reward for equity is maybe as bad as I've seen it in my career. The wild card here is the Fed can always step up their (asset) purchases," Druckenmiller said, according to the organization's Twitter account. — Pound

8:45 am: Uber debt offering continues high bond market activity

Uber announced on Wednesday morning that it is planning to sell $750 million in senior notes, continuing a torrent of major debt deals during the pandemic. Ride share rival Lyft announced the pricing of a $650 million convertible debt offering on Tuesday. Other recent debt announcements include Disney, PayPal and General Motors, with $25.7 billion of investment grade debt hitting the market on Monday alone. — Pound, Domm

8:43 am: J.C. Penney is in talks for $450 million loan

Troubled retailer J.C. Penney is in talks with lenders to secure $450 million in financing for a possible bankruptcy filing, people familiar with the situation told CNBC. The financing would require the retailer to hit certain goals to receive the second half of the loan. A bankruptcy filing could come as soon as Friday, although that timing could still be delayed, according to one source. Once worth billions of dollars, the stock now trades at just 20 cents. – Hirsch, Stevens

8:41 am: US producer price index drops more than expected in April

A measure of underlying U.S. producer prices fell more than expected in April as the economy reeled from restrictions imposed to contain the coronavirus. The U.S. producer price index dropped 1.3% last month, more than the 0.5% decline expected by economists polled by Dow Jones. The reading came after data on Tuesday showed consumer prices dropped by the most on record in April. – Li

8:16 am: Buybacks slow to record low pace

Bank of America said in a note that buybacks by its clients are down 35% year-to-date and that the second quarter is on track to be the lowest total on record. Share repurchases by Bank of America clients have generally tracked total S&P 500 buybacks over the past decade."Buybacks remained extremely anemic, with QTD buybacks tracking just over $1bn — on pace for a record-low ~$2bn quarter in our data history," the note said. —Pound

8:01 am: Grubhub could fetch $75 a share in Uber takeover, says Barclays

News broke that Uber Technologies approached Grubhub with a takeover offer, sending Grubhub shares soaring nearly 30% on Tuesday. Barclays expects the potential deal to value Grubhub at $75 per share, nearly 25% upside from Tuesday's close of $60.39 per share. The bank said the move would combine two of the biggest players in the meal-delivery business at a time when the industry faces "significant tailwinds" amid the coronavirus pandemic. "Now is the right time," Barclays analyst Deepak Mathivanan said in a note on Wednesday. "The food delivery industry has seen significant tailwinds over the past few months during the COVID-19 pandemic, with volume growth ranging from 70-100%." –Li 

7:52 am: Powell appearance likely to focus on economy, negative rates

The market will hear Wednesday morning from Federal Reserve Chairman Jerome Powell, who is expected to address the weakening national economy and the potential for negative interest rates. Powell will appear at 9 a.m. on a webcast with the Peterson Institute for International Economics. Though it's not clear if the events are connected, the appearance was scheduled just after futures traders last week began making bets that the Fed's benchmark overnight interest rate would go negative by the end of the year. Powell and other Fed members have repeatedly pushed back on the kinds of negative rates that are prevalent in much of Europe and in Japan. – Cox

7:50 am: Big Tech rises in the premarket

Shares of the biggest tech companies all traded higher in the premarket Wednesday, a day after they rolled over and pressured the broader market into a sharp decline. Facebook gained about 0.5% before the bell along with Amazon and Apple while Netflix shares advanced 0.9%. Google-parent Alphabet rose 0.8% and Microsoft traded 0.5% higher. These stocks have been among the best performers since the S&P 500 hit a bottom on March 23. —Imbert

7:40 am: Stock futures rebounding

Stock futures were higher, rebounding from Tuesday's losses as big technology shares including Microsoft gained in premarket trading. The big event traders are waiting on is Federal Reserve Chairman Jerome Powell's virtual speech at 9:00 am ET. The Dow Jones Industrial Average lost more than 450 points on Tuesday. But Dow futures were higher by 148 points Wednesday morning. -Melloy

– CNBC's Jeff Cox, Jesse Pound, Lauren Hirsch, Patti Domm, John Melloy and Michael Sheetz contributed reporting.

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Stock market live updates: Dow down 2%, Powell sees risks, Tepper's warning - CNBC
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