Moody’s downgrades Tesla debt to B3, fearing liquidity pressure

Moody’s Investors Services late Tuesday downgraded Tesla Inc. corporate debt rating to B3 from B2, one notch further down on its junk-bond rating, saying the Silicon Valley car maker “will have to undertake a large, near-term capital raise in order to refund maturing obligations and avoid a liquidity shortfall.” The ratings reflect “the significant shortfall” in the Model 3 production rate as well as the company’s “liquidity pressures due to its large negative free cash flow and the pending maturities of convertible bonds ($230 million in November 2018 and $920 million in March 2019),” Moody’s said. The bond rating company also downgraded the company’s 2025 notes to Caa1, from B3, thanks to “the junior position of the notes relative to the company’s $1.9 billion secured credit facility,” it said. Tesla enjoys “solid market acceptance” of its Model S and Model X vehicles, favorable Model 3 reviews, and growing regulatory support for electric vehicles. The negative outlook, however, reflects the likelihood that Tesla will have to tap capital markets to fend off a potential liquidity crunch. The rating could be lowered further if there are shortfalls in the company’s Model 3 production targets and raised if the Model 3 production rate meets expectations and if the company maintains good liquidity, Moody’s said. Shares of Tesla were down 0.1% in the extended session, and ended the regular trading day down 8%. Tesla’s 2025 bonds were trading at the lowest levels recently.

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Tech sector on track for worst session in more than six weeks

The technology sector tumbled on Tuesday, dropping as the biggest decliner among S&P 500 sectors and leading the overall market lower. The sector sank 3.5%, dropping in what was set to be its biggest one-day decline since Feb. 8. While the group is one of only two industries to be positive for 2018 — it is up 1.8% on the year, behind only the 2.4% gain of consumer-discretionary stocks — it has struggled of late. The sector has dropped in eight of the past 11 sessions, and two of those positive sessions were gains of less than 0.1%. Thus far this month, it is down 5.3%, the second-worst performer behind financials. Among the biggest drags in the tech sector, Apple Inc. fell 2.9% while Microsoft Corp. was off 4.6%. Both are coming off sharp rallies in the previous session, including Microsoft’s best one-day pop since 2015. Semiconductor stocks also weighed on the group, with Nvidia Corp. off 9.5% and Advanced Micro Devices down 5.1%.

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Dow’s 400-point tumble, driven by Microsoft, Apple, Goldman’s stock tumbles

The Dow Jones Industrial Average was off more than 400 points in late-Tuesday afternoon trade, as shares of Microsoft Corp. and Apple Inc. , among the leaders of Monday’s surge, came under heavy selling pressure. Along with shares of Goldman Sachs Group Inc. , those Dow components were exacting a roughly 110-point toll on the price-weighted blue-chip average. The technology sector was being buffeted the most, with the exchange-traded Technology Select Sector SPDR ETF trading down 2.4% on the day. The technology-laden Nasdaq Composite Index was off 3.4%. Most recently, the Dow was down about 444 points, or 1.7%, at 23,784, while the S&P 500 index was 2.1% lower at 2,602.

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U.S. stocks extend losses; S&P 500 down 2%, Nasdaq off 3%

U.S. stocks fell sharply on Tuesday, extending their losses throughout the session as technology and financial shares led the market lower. The Dow Jones Industrial Average fell 1.7% while the S&P 500 was off 2.1% and the Nasdaq Composite Index shed 3.4% in its biggest one-day drop since early February. The day’s losses were led by the tech sector, which fell 3.6%, and by financials, off 2.1%. The session was the latest example of heavy volatility on Wall Street; Monday’s session represented the biggest one-day percentage gain for the major indexes since August 2015, and the indexes are coming off their worst week in about two years. The day’s losses were broad based, with only four of the 11 primary S&P 500 sectors in positive territory. The gains were led by defensive sectors, with utility stocks up 1.7% and telecommunications up 0.8%.

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Financial stocks take a broad beating as Treasury yields, Dow sell off

Financial stocks took a broad beating Tuesday, as a drop in longer-term Treasury yields and a stock-market selloff weighed took its toll. The SPDR Financial Select Sector exchange-traded fund dropped 2.4% in afternoon trade, with all 68 of its equity components contributing to losses. Among the most heavily weighed components, shares of Warren Buffett’s Berkshire Hathaway Inc. fell 2.3%, J.P. Morgan Chase & Co. gave up 2.7% and Bank of America Corp. dropped 3.7%. The biggest losers were shares of SVB Financial Group , which slumped 4.8%, and KeyCorp.’s stock , which slid 4.2%. Falling longer-term Treasury yields–the 10-year yield was down 5.7 basis points toward a seven-week low of 2.786%–can hurt banks’ profits is the spread made between rates tied to longer-term assets, like loans, and shorter-term liabilities narrow. In addition, the Dow Jones Industrial Average tumbled 382 points, or 1.2%, with 25 of 30 components losing ground.

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Dow’s 200-point slide, driven by Microsoft, Apple’s stocks as tech sector falls

The Dow Jones Industrial Average was off more than 200 points in late-Tuesady afternoon trade, as shares of Microsoft Corp. and Apple Inc. , among the leaders of Monday’s surge, came under heavy selling pressure. Along with shares of Goldman Sachs Group Inc. , those Dow components were exacting a roughly 80-point toll on the price-weighted blue-chip average. The technology sector was being buffeted the most, with the exchange-traded Technology Select Sector SPDR ETF trading down 2.2% on the day. The technology-laden Nasdaq Composite Index was off 2.1%. Most recently, the Dow was down about 200 points, or 0.8%, at 23,998, while the S&P 500 index was 1.1% lower at 2,628.

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Longfin shares cut in half after being dropped from Russell 2000

Shares of Longfin Corp , a fintech company with ties to cryptocurrencies, plunged 48% over the past two sessions, following statement from FTSE Russell on Monday that the stock will be removed from its indexes. Longfin shares skyrocketed last last year after it bought Ziddu.com, a blockchain technology provider that offers microfinance lending. FTSE Russell said in a statement that the fintech firm failed to have at least 5% of its shares available to the public, a requirement for being included in the index. The removal comes less than two weeks after the stock joined the benchmark for small-capitalization companies. Longfin shares plunged 37% on Tuesday and 17% on Monday. However, it is still up more than 600% from its initial listing in December, when it listed at just over $5. The S&P 500 is flat over the same period.

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Nvidia shows off self-driving simulator after halting tests

Nvidia Corp. demonstrated its new self-driving simulation offering Tuesday, after halting real-world tests of autonomous vehicles in the wake of a pedestrian death at the hands of an Uber Technologies Inc. car testing the technology last week. In the keynote address of Nvidia’s annual GPU Technology Conference in San Jose, Calif., Chief Executive Jensen Huang pitched the service as a way for cars to learn how to drive themselves in a virtual environment instead of on real roads. Huang noted that a fleet of 20 cars could only drive about 1 million miles in a year, while the Constellation simulator could allow for billions of miles driven in a year. Huang announced that early-access partners will have access to the system in the third quarter of this year. Nvidia shares fell after news of the self-driving testing halt arrived as Huang took the stage, and were recently down more than 5% on the day, while the S&P 500 index was trading close to flat.

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MoviePass signs deal with Mark Cuban theater group, Helios & Matheson shares surge

Shares of MoviePass parent Helios & Matheson Analytics Inc. are up 12.4% in Tuesday trading after the company announced a deal with Landmark Theatres, a movie chain owned by Todd Wagner and Mark Cuban. Landmark Theatres has 53 theaters and 255 screens nationwide, and is dedicated to independent films. Under the deal, MoviePass members will gain access to e-ticketing and seat selection at Landmark theaters. “Our relationship with Landmark represents another milestone achievement in our journey to enhancing the current movie theater ecosystem,” said Bernadette McCabe, a senior vice president with MoviePass, in a release. “It’s another step towards educating exhibitors on how we can work together in a mutually beneficial way to create a valuable and cost-effective experience for moviegoers.” Helios & Matheson shares are up 26% over the past 12 months, while the S&P 500 is up 14%.

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Housing rights groups sue Facebook for discrimination

The National Fair Housing Alliance on Tuesday filed a lawsuit against Facebook, Inc. , alleging that the popular platform’s advertising allows landlords and real estate brokers to exclude people from seeing ads for housing. “Facebook customizes the audience for its millions of advertisers based on its vast trove of personalized user data,” the fair-housing group said in a release, allowing the company to exclude women, families with children, and others. The NFHA tested its assertion by creating a fake real estate firm and submitting housing advertisements to Facebook. According to the release, “Facebook provided Plaintiffs with specific lists of groups they could exclude from receiving the ads, including families with children, moms with children of certain ages, women or men, and other categories based on sex or family status.” The group also alleges that its investigation determined that Facebook allows housing advertisers to exclude certain “interest” categories from receiving ads that are based on disabilities or national origins.

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