The Dow soars as coronavirus slows: April 6, 2020

The market is enjoying an explosive rally Monday. Energy stocks were among the few losers as crude oil prices fell. But food companies took a hit too.

It appears that investors are encouraged by some of the headlines suggesting the death rates from the Covid-19 pandemic in the United States and Europe are starting to slow. That seems to be leading to hopes that some of the stricter shelter in place and quarantine regulations will be relaxed.

If that happens, consumers may not find it as necessary to stock up on food. Shares of Campbell Soup (CPB), supermarket king Kroger (KR) and cereal giant Kellogg (K) were among just 17 of the S&P 500 stocks trading lower midday Monday. SPAM owner Hormel (HRL), Kellogg rival General Mills (GIS) and jelly maker Smucker (SJM) were flat.

Janet Yellen thinks America's banks should slam the brakes on dividends to make sure they have enough cash to deal with the coronavirus crisis.

The former Federal Reserve chairwoman told CNBC Monday that US regulators should ask banks to suspend both dividends and stock buybacks.

Big banks, including JPMorgan Chase (JPM) and Wells Fargo (WFC) have already halted buybacks to preserve resources for the health crisis.

"We need a banking system that's able to meet the credit needs of the economy," Yellen said. "And we don't know how severe or how long-lasting this pandemic will be."

Bank CEOs have suggested they will be able to ride out this storm while preserving their coveted dividend payments to shareholders.

"Banks tend to be very reluctant to stop dividends and stock buybacks because they worry it will make them look as though they're vulnerable," Yellen said.

The good news is that Yellen believes America's banks entered this period in a far stronger position than the last recession.

Still, banks won't be immune to the millions of job losses, record-breaking declines in GDP that loom and near-zero interest rates.

"Eventually, there will be a toll on the banking system," Yellen said.

JPMorgan Chase (JPM) CEO Jamie Dimon used his annual shareholder letter to detail just how bad he thinks the US economy can get from the coronavirus pandemic.

Dimon expects a "bad recession," he wrote in the letter released Monday, saying that in the most adverse scenario, gross domestic product could plunge at a 35% annual rate in the second quarter and that a downturn would last through the rest of the year. The unemployment rate would spike as high as 14% in this environment.

But Dimon added that "this scenario is quite severe and, we hope, unlikely." And even if the worst case situation bears out, JPMorgan Chase still plans to lend an additional $150 billion to its customers.

Read the full story here.

Wayfair (W) said its first quarter sales are forecast to "meet or exceed" expectations as people are forced to stay home amid the coronavirus pandemic.

The online home retailer revealed in a release that sales doubled at the end of March and it continues to be strong for the first few days of April.

Wayfair's stock soared 40% in early trading. The company releases its first quarter earnings report on May 5.

It's 10 am and the Dow is up more than 1,000 points.

These kinds of wild swings have dominated the market for the past month.

Monday's upbeat sentiment follows some encouraging coronavirus data that showed a slowdown in infections.

The Dow was last up 1,070 points, or 5.1%. The broader S&P 500 was up 4.9%. Basic materials and financials shares are leading gains.

Federal regulators are easing rules on America's community banks in hopes they'll lend to businesses and households hurt by the coronavirus crisis.

Bank agencies announced Monday they will temporarily lower the community bank leverage ratio to 8%. That rule change -- required by the $2 trillion stimulus package that was enacted last month -- means banks no longer need to keep as much loss absorbing-capital on hand.

Under the new rules, which only apply to small banks, the leverage ratio will be 8% starting this quarter and remain there for the rest of 2020.

In 2021, the ratio will rise to 8.5% and then 9% after that.

"This transition will allow community banking organizations to focus on supporting lending to creditworthy households and businesses given the recent strains on the U.S. economy caused by the coronavirus," the regulators said in a statement.

US stocks rallied at Monday’s open following some encouraging data that showed a slowdown in coronavirus infections in multiple countries.

This is a shortened week, as exchanges are closed for Good Friday.

US stocks are gearing up for a big rally at the opening bell, and European exchanges and some Asian indexes are also in the green.

Some encouraging news regarding slowing infection rates of Covid-19 across the world put investors in a better mood.

While the growth rate of infections has slowed down, it's still too high for comfort at this point, according to Sal Guatieri, senior economist at BMO. Still, "for now, investors are eager to grab onto any ray of hope." Guatieri said.

The economic cost of the pandemic is still unknown and investors are keen to see more data on the impact so far. Last week's March jobs report was far worse than expected. But this week's economic calendar is light. Thursday's release of weekly jobless claims will likely be the main focus.

Over the past two week, claims data showed some 10 million Americans filing for first time unemployment benefits.

Apple (AAPL) CEO Tim Cook said the company will produce as many as 1 million face shields for medical workers beginning this week.

In a video posted on his Twitter account, Cook said it's a "company wide effort bringing together product designers, engineering operations, packaging teams, and our suppliers" to make the masks.

The first shipment arrived to hospitals in Silicon Valley and will be shipped to other hospitals in the United States.