Stock market live Tuesday: Dow falls nearly 800, Fed rate cut backfires, 10-year below 1%

It was a volatile session for stocks, with the Dow moving between triple digit gains and losses. The Federal Reserve announced an emergency rate cut of 50 basis points – its first unscheduled cut since the financial crisis – and while Chairman Jerome Powell said the economy remains "strong," stocks sold off as some on the Street wondered if things are worse than they might seem.

• Dow session high: +381.27 points
• Dow session low: - 997.04 points

Here's the latest:

• S&P closed down -2.81% for its 8th negative day in 9
• S&P is 11.5% below its intraday all-time high of 3,393.52 from Feb. 19

• Dow closed down -2.94% for its 8th negative day in 9
• Dow is 12.35% below its intraday all-time high of 29,568.57 from Feb. 12

• Sectors: 11 out of 11 sectors were negative led by tech down -3.79%
• 7 out of 11 sectors closed in correction levels
• Energy closed 32.48% below its April 23rd 52-wk high of 507.26 in bear market levels
• Financials closed 13.82% below its Jan 2nd record close
• Industrials closed 13.68% below its Feb 12th record close
• Tech closed 12.55% below its Feb 19th record close
• Materials closed 11.43% below its 52-wk high close
• Consumer Discretionary closed 11.69% below its Feb 19th record close
• Communication Services closed 11.14% below its Feb 19th 52-wk high close
• US 10-year note hit a record low of 0.906%

Stocks finished the day sharply lower, marking a reversal from Monday's surge which saw all the major averages post their largest point gain in history. The Dow fell 785 points, or 2.94%, while the S&P 500 and Nasdaq fell 2.8% and 3%, respectively. Earlier in the session stocks rallied after the Federal Reserve announced an emergency 50 basis point rate cut, but markets couldn't hold onto the gains and stocks moved lower throughout the day. At the session low, the Dow dropped 997.04 points. The yield on the U.S. 10-year Treasury also broke below 1% for the first time ever as investors piled into the so-called safe haven asset. - Stevens

The crazy market volatility is starting to wear on the psyche of market traders. The Dow has moved more than 1,000 points intraday in four of the last six sessions. "The market has become uninvestible," Joe Zicherman from Stadium Capital told CNBC's Bob Pisani. "You cannot manage money on an active basis when the Dow is up 1,000 one day, and then down 1,000 the next day." Another active trader said he was simply reducing the size of his portfolio: "I'm bringing down my gross," he said. "I'm shrinking my long and short positions." That "de-grossing," as traders refer to it, will ultimately serve to reduce market volatility down the road, but for the moment the head spinning trading, and the inability to correctly interpret the Fed's moves (ahead of the curve? Needlessly wasting bullets?) has traders anxious and nervous. - Pisani

Frederick Mishkin, who served as a Fed governor from 2006 to 2008, praised the central bank's emergency rate cut on "Closing Bell," saying that the cut was proactive and shows that the Fed has learned some of the lessons from the financial crisis. "The Fed understands that even before the data actually shows that there is a problem, that this shock is going to effect the economy in a negative way. You've got to get out ahead of it. So in this case, I think the messaging was spot on and I think the action was spot on as well," Mishkin said.  — Pound

Heading into the final hour of trading stocks are sharply lower, although off the worst levels of the day. The Dow is down 671 points, or 2.5%, while the S&P 500 and Nasdaq have shed 2.3% and 2.6%, respectively. Bank stocks and tech names are dragging the market lower. Real estate is the only S&P sector currently in the green. - Stevens

The SPDR S&P Bank ETF (KBE) is down more than 4%, and on pace for its worst daily performance since March 2019, and is on track for its seventh negative session in eight. The SPDR S&P Regional Banking ETF (KRE) is also down more than 4%, and on track for its worst day since Dec. 2018. - Stevens, Francolla

Losses accelerated in late afternoon trading, with the Dow falling more than 950 points, or 3.6%. The S&P 500 and Nasdaq are down 3.3% and 3.6%, respectively. - Stevens

As the yield on the U.S. 10-year Treasury broke below 1% for the first time ever, stocks fell to fresh session lows. The Dow plummeted more than 750 points, giving back more than half of Monday's gains. The S&P 500 and Nasdaq are down 2.6% and 2.8%, respectively. - Stevens

The 10-year Treasury yield broke below 1% for the first time ever in the wake of an emergency rate cut by the Federal Reserve to combat the economic effects of the spreading coronavirus. The yield on the benchmark 10-year Treasury note fell more than 7 basis points to a record low 0.997%. The yield on the 30-year Treasury bond was also at a record low of 1.601%. - Li

Stock losses accelerated in early afternoon trading. The Dow is down 657 points, or 2.3%, while the S&P 500 and Nasdaq are down 2% and 2.2%, respectively. The plunge follows an emergency rate cut from the Federal Reserve.  - Stevens

"We think the Fed will cut further, delivering another 50bp of cuts in H1. The timing of those cuts is challenging due to the uncertain outlook for economic data, markets, and the virus," Bank of America strategists led by Michelle Meyer wrote in a note to clients following the Fed's emergency cut. "Our baseline is that the Fed will cut another 25bp at the upcoming meeting on March 18th followed by a 25bp cut in April. The Fed seems committed to frontloading cuts, acting aggressively and forcefully. The market is also pressuring the Fed by pricing in over a 70% probability of a March cut; the Fed won't fight it." - Stevens

Economist Mohamed El-Erian said the Federal Reserve's explanation for its emergency interest rate cut exposed a "massive communication problem." The 50-basis point cut signals the coronavirus is "an emergency situation," the chief economic advisor at Allianz said on CNBC's "Halftime Report." But on the other hand, he noted the central bank also said the fundamentals of the U.S. economy remain strong, suggesting it was an "insurance cut." "This is a no-win situation for policy makers," he said. - Stankiewicz

After the Dow surged 1,294 points on Monday the index exited correction territory, but the move appears to have been short-lived. With Tuesday's more than 300-point decline the index is back in correction territory, or more than 10% below its recent high. - Stevens

The SPDR S&P 500 ETF Trust (SPY), a widely traded ETF that tracks the broader U.S. stock average, has already seen larger-than-normal volume. By midday, the ETF had traded more than 130 million shares. That's well above its 30-day average volume of 103.4 million. The volume spike comes after the Fed cut rates by 50 basis points in an effort to stem an economic slowdown from the coronavirus. — Imbert, Francolla

The Federal Reserve announced an emergency rate cute of 50 basis points as the coronavirus outbreak continues to roil global markets. This is the first time since the financial crisis in 2008 that the Fed has implemented an unscheduled rate cut. - Stevens

The 10-year Treasury yield is threatening to break 1% for the first time ever after the Fed slashed rates. The yield on the benchmark 10-year Treasury note fell more than 5 basis points to a record low of 1.026%. The yield on the 30-year Treasury bond was also at a record low of 1.633%. The dive in bond yields is hurting bank stocks and raising concerns about the health of the overall economy. — Melloy

Stephen Roach, the former chief economist at Morgan Stanley and the former chairman of Morgan Stanley Asia, said on "Squawk on the Street" that the Federal Reserve rate cut is not the right tool to help the economy during the coronavirus outbreak. "I really think they're like a fish out of the water here. They have no idea how to contain or even to understand what may be about to happen in the public health area or the U.S. economy's response to that," Roach said. — Pound

CNBC's Jim Cramer said the Federal Reserve's emergency rate cut on Tuesday makes him more concerned about the economic risks from the coronavirus. "It's great that the Federal Reserve recognizes that there's going to be weakness, but it makes me feel, wow, the weakness must be much more than I thought," Cramer said on "Squawk on the Street." Cramer also said he's increasingly worried about how small and medium-sized businesses would be impacted by the outbreak. - Stankiewicz

Shares of Target slid more than 3% after the company reported mixed results for the fourth quarter. Adjusted earnings per share came in at $1.69 which was ahead of the $1.65 analysts polled by Refinitiv had been expecting, although the retailer's $23.40 billion in revenue missed estimates of $23.50 billion. This was the first time in 3 years that the company missed revenue estimates, and the same-store sales growth of 1.5% was the weakest in more than 2 years. - Stevens

"Listening to Jay Powell and it's evident that the key goal of sharply cutting rates was to ease financial conditions due to the acknowledgment that rate cuts are not a vaccine to the virus," wrote Peter Boockvar, chief investment officer at Bleakley Advisory Group. But "financial conditions only ease if market participants are confident enough to take risk, but because of the huge economic unknowns right now still, investors will remain risk averse thus diluting the impact of this move.... As for encouraging higher consumer and business confidence, this type of panicky move, when the Fed has only 4 more rates to cut, I believe does the exact opposite." - Melloy

Following Fed Chair Powell's press conference, stock losses accelerated. The Dow is now down more than 500 points, or nearly 2%. The S&P 500 is down 1.7%, and the Nasdaq has shed 1.5%. Today's fall is a sharp contrast to Monday, when the Dow surged 1,294 points. - Stevens

"It's very important that people understand that we will always make our decisions based on the thinking we have, based on what we learn from our outreach to businesses, non-profits and educational institutions that we get every cycle from our reserve banks. We are always going to make our decisions in the interest of American people to carry forward and achieve our mandates. We are never going to consider any political considerations whatsoever," Fed Chair Powell said. - Li

"The economy continues to perform well … Financial markets are functioning in an orderly manner… We, the supervisors, will be working with banks to assure they work with their borrowers … I can imagine us doing those sorts of things but those things are not upon us at the moment," Powell said. - Li

Fed Chair Powell said that amid the coronavirus outbreak, and despite the decision to implement an emergency rate cut, the fundamentals of the U.S. economy remain strong.  - Stevens

Federal Reserve Chairman Jerome Powell held a news conference Tuesday following the central bank's decision to cut overnight interest rates by half a percentage point. The move took the Fed's benchmark rate to a target range between 1%-1.25% and was the first intermeeting action since December 2008, during the financial crisis.

"What changed really was … over the course of the last couple of weeks we've seen a broader spread of the virus. We've seen it began to spread a bit here the United States. For us, what really matters is … the risk to the economy, and we saw a risk to the outlook for the economy and chose to act," he said. - Li, Stevens

"Our best guess is that if incoming information relating to the virus and its impact on the US and global economy remains adverse the Fed will deliver another couple of 25bp rate cuts in the coming meetings before assessing in June whether the outlook is starting to stabilize or recessionary dynamics are starting to take hold," wrote Evercore ISI's Krishna Guha and Ernie Tedeschi. - Melloy

"The action is if anything a bit earlier and larger than what economist consensus and markets had expected, which should be positive for risk assets," wrote Citi's Andrew Hollenhorst. "Moreover, it will be viewed as likely to be followed by accommodation from other central banks globally."

"We would not be surprised by additional easing in March or April," Citi added. - Melloy

President Trump urged the Federal Reserve to take additional action, writing in a tweet "more easing and cutting!"

Tweet

Major homebuilder stocks spiked on Tuesday morning after the Federal Reserve's surprise rate cut. Shares of Lennar gained 4.8%, while PulteGroup, D. R. Horton and KB Home were all trading more than 3% higher.  — Pound

In a volatile trading session that's seen the Dow whiplash between triple-digit gains and losses, the major averages are once again higher as the Street digests the Federal Reserve's emergency rate cut. The Dow is up 111 points, or 0.4%, while the S&P and Nasdaq are each up 0.6%. – Stevens

Stocks rallied immediately after the Federal Reserve announced an emergency rate cut, but the major averages quickly gave back those gains to turn negative once again. The Dow is now down 100 points. – Stevens

Bank stocks came under pressure as the Federal Reserve announced a rate cut. Financials is the only negative S&P 500 sector, with JPMorgan, Wells Fargo and Bank of America each down more than 1%, while Morgan Stanley, Goldman Sachs and Citigroup are also trading lower. Tech stocks, however, are getting a boost. Apple, Netflix, Alphabet and Amazon are all up more than 1%. – Stevens

Stocks jumped with the Dow up nearly 200 points after the Federal Reserve said it was cutting rates by half a percentage point to combat the coronavirus slowdown. – Stevens

The major average are all down more than 1%, with the Dow falling more than 350 points at the low. – Stevens

Despite Monday's stock surge, transport stocks are still feeling the pain. All 20 components in the Dow Transportation Average are in correction territory, or more than 10% below recent highs. – Francolla, Stevens

After opening higher, the Dow quickly reversed course, and is now down more than 200 points. – Stevens

Stocks opened little changed as investors continue to hope for stimulus from the Federal Reserve, despite the G-7's disappointing statement that didn't outline any specific actions. The Dow Jones Industrial Average fell 25 points, or 0.09%, while the S&P 500 and Nasdaq were down 0.3% and 0.13%, respectively. – Stevens

• JMP upgraded Tesla to outperform from market perform.
• Deutsche Bank upgraded UPS to buy from hold.
• Wells Fargo lowered its price target on Disney to $155 from $180.
• Needham added Uber to its conviction list.
• Bank of America downgraded Anheuser-Busch InBev to neutral from buy.
• Piper Sandler upgraded Advanced Micro Devices to overweight from neutral.

CNBC PRO subscribers can read more here. – Bloom

After briefly rallying off the worst levels of the day, U.S. stock futures extended declines and are now pointing to a triple digit loss. The Dow is set to open more than 200 points lower after a New York City high school reportedly closed due to a suspected coronavirus case in its community, according to Reuters. The S&P 500 and Nasdaq are also indicating losses at the open. Investors are still hoping for action from the Federal Reserve, despite the G-7 statement that pointed to no specific actions. Prior to the statement, U.S. futures were pointing to gains at the open. – Stevens

Shares of airline stocks are in the green, with Delta gaining more than 3% and United and American each up more than 1% in premarket trading. As the coronavirus has spread, airline companies have been hit especially hard, and all three stocks are currently trading in bear market territory. – Stevens

Chipmaker Qorvo lowered its revenue guidance for the March quarter to $770 million from a range of $800 million to $840 million previously. The chipmaker said the coronavirus has impacted "the smartphone supply chain and customer demand more than anticipated." Shares of Qorvo rose 1.6% in premarket trading, however, as the negative impact from the outbreak might have been priced in. Qorvo has already tumbled nearly 14% this year. "The full impact of COVID-19 remains difficult to forecast given the uncertainty of the magnitude, duration and geographic reach of the outbreak," the company added. - Li

Shares of Kohl's gained more than 4% during Tuesday's premarket trading after the retailer beat top and bottom line estimates in the fourth quarter. The company earned $1.99 per share on $6.537 billion in revenue, while analysts polled by Refinitiv had been expecting EPS of $1.88 and $6.523 billion in revenue. CEO Michelle Gass said the chain saw an "acceleration of traffic," and new customers both in stores and online. Same-store sales were flat, but that was better than the 0.1% drop analysts had been expecting. - Stevens

Here's what the statement said:

"Given the potential impacts of COVID-19 on global growth, we reaffirm our commitment to use all appropriate policy tools to achieve strong, sustainable growth and safeguard against downside risks.  Alongside strengthening efforts to expand health services, G7 finance ministers are ready to take actions, including fiscal measures where appropriate, to aid in the response to the virus and support the economy during this phase.  G7 central banks will continue to fulfill their mandates, thus supporting price stability and economic growth while maintaining the resilience of the financial system.

We welcome that the International Monetary Fund, the World Bank, and other international financial institutions stand ready to help member countries address the human tragedy and economic challenge posed by COVID-19 through the use of their available instruments to the fullest extent possible."

Stock futures reversed course and are now pointing to losses at the open after the G-7 statement mentioned no specific actions to combat coronavirus. - Stevens

Global investors awaited a statement from the G-7 on how the top world economies plan on counteracting the coronavirus' impact on economic activity. However, Reuters cited a G-7 official with direct knowledge of the deliberations saying that the statement does not include any specific call for new government expenditure or coordinated interest rate cuts by central banks. —Imbert

Expectations are rising on Wall Street that global central banks will soon provide stimulus in a bid to offset the potential economic fallout from the coronavirus. On Tuesday, the Reserve Bank of Australia announced a cut in its cash rate by 25 basis points to 0.5%, a new record low. The central bank's governor acknowledged that the outbreak is having a "significant effect" on the country's economy. Meanwhile, the market has already priced in a 50 basis point rate cut at the Federal Reserve's policy meeting this month. Many also see the possibility of the Fed pulling the trigger before its March 18 meeting. Investors are awaiting a statement from the G-7 major economies on plans to mitigate the virus impact following a conference call Tuesday morning led by Treasury Secretary Steven Mnuchin and Fed Chair Jerome Powell. – Li

JMP Securities upgraded shares of Tesla to market outperform from market perform and established a Street high price target of $1,060 per share, sending shares of the electric automaker up more than 6% to $793 per share in premarket trading Tuesday. "The recent market-driven pullback provides investors with a good opportunity to enter the stock in our opinion, and a perusal of offerings from competitors suggests that TSLA's market position should continue to be dominant," JMP Securities analyst Joseph Osha said in a note to clients. Shares of Telsa are up nearly 80% this year. – Fitzgerald

U.S. stock futures pointed to muted gains at the open, as the market awaits a statement from the G-7 call and as the number of coronavirus cases worldwide tops 90,000. Quiet futures trading is a departure from the market's recent volatility. Stocks roared back to life on Monday with the Dow gaining 5.09% for its best day in nearly 11 years, and all the major averages posted their largest point gains on record. Monday's surge followed the worst week since the financial crisis, however, so stocks still have a ways to go to make up for the recent declines. – Stevens

With reporting from CNBC's Fred Imbert, Gina Francolla, Jesse Pound, John Melloy, Kevin Stankiewicz, Bob Pisani and Michael Bloom.

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