* Kansas City Southern surges on bid from Canadian National
* Boeing slides on CFO's shock retirement
* CBOE volatility index hits three-week high
(Adds market close at 4 p.m.)
By Herbert Lash
NEW YORK, April 20 (Reuters) - Stocks on Wall Street fell
for a second straight day on Tuesday as a global spike in
coronavirus cases hit travel-related shares and investors had
second thoughts about big U.S. banks' apparently stellar
earnings last week.
Kansas City Southern KSU.N surged on the prospect of a
bidding war after Canadian National CNR.TO offered about $30
billion for the U.S. railroad, some $5 billion more than an
earlier offer from Canadian Pacific CP.TO . Boeing Co BA.N slid on the unexpected departure of its
finance chief, the latest shock to hit the planemaker as it
fights to recover from the pandemic and 737 MAX crisis.
Investors piled into defensive sectors considered relatively
safe during times of economic uncertainty, lifting real estate
.SPLRCR , utilities .SPLRCU , consumer staples .SPLRCS and
healthcare .SPXHC as financials and energy shares fell hard.
Shares of airline operators and cruiseliners including
JetBlue Airways JBLU.O , American Airlines AAL.O , Norwegian
Cruise Line NCLH.N and Carnival Corp CCL.N , which were
hammered last year during lockdowns but have climbed recently on
the reopening hopes, fell around 5%.
Some of the recent optimism about the leisure industry has
waned as the reopening might take a bit longer than initially
thought, said Michael James, managing director of equity trading
at Wedbush Securities in Los Angeles.
"We're not out of the woods yet when it comes to the COVID
virus and getting to where global economies are reopening," he
said. "Some of that enthusiasm has diminished."
A leading epidemiologist at the World Health Organization
said on Monday the latest rise in COVID-19 infections worldwide
reflected increases among all age groups. Wall Street scaled record highs last week as investors bet
on stocks such as industrials and miners that are seen as
benefiting from the economic rebound, while highly valued
technology stocks regained favor after a retreat in bond yields.
Unofficially, the Dow Jones Industrial Average .DJI fell
0.75% to end at 33,820.51 points, while the S&P 500 .SPX lost
0.68% to 4,134.96.
The Nasdaq Composite .IXIC dropped 0.92% to 13,786.27.
The CBOE volatility index .VIX , known as Wall Street's
fear gauge, climbed above 19 points for the first time since
March 31, but closed a bit below that.
JPMorgan Chase & Co JPM.N , Bank of America Corp BAC.N ,
Citigroup Inc C.N and Wells Fargo & Co WFC.N led financials
lower as analysts reassessed their earnings reports, said Dick
Bove, senior research analyst at Odeon Capital Group.
Accounting changes on how to report loan reserves skewered
numbers when compared to a year ago, he said.
"People made the assumption this was a gangbusters quarter
for the banking industry when that's far from the truth," Bove
said, adding second-half profits are expected to be very strong.
United Airlines Holdings Inc UAL.OQ was the largest
decliner on the S&P 500 after reporting a bigger-than-expected
adjusted net loss to push the S&P 1500 airline index .SPCOMAIR
down. Shares of video-streaming service provider Netflix Inc
NFLX.O , which thrived during last year's lockdowns, fell ahead
of its results due after the closing bell.
International Business Machines Corp IBM.N rose after
recording the biggest increase in quarterly sales in more than
two years. Analysts expect first-quarter earnings from S&P 500 firms to
jump 31.5% from a year earlier, according to Refinitiv IBES
data.