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Coronavirus Hits Airlines, Market Volatility & Buy this Home Builder Stock - Free Lunch

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On today’s episode of Free Lunch here at Zacks, Associate Stock Strategist Ben Rains takes a look at Monday’s selloff and Tuesday’s up and down reaction. We also dive into oil prices and their impact, as well as what’s next on the coronavirus front. We then close with a look at why Lennar (LEN - Free Report) is a Zacks Rank #1 (Strong Buy) stock right now.

Stocks plummeted Monday and trading was halted for the first time in 23 years. The Dow fell 7.8% and lost over 2,000 point in one session for the first time ever. Meanwhile, the S&P 500 sunk 7.6%, for its worst day since 2008. Overall, indexes inched closer to bear market territory yesterday, as they fell close to 20% off their recent highs.


Stocks did bounce back Tuesday, up over 3% in early morning trading. But all three major U.S. indexes began to slip, and the Dow and the S&P 500 have now swung between red and green Tuesday, as volatility continues.

Luckily, oil prices jumped over 8% Tuesday after they suffered their biggest drop since 1991 yesterday, with the U.S. benchmark price down 25% to $31 a barrel. And the fight between Saudi Arabia and Russia has put a ton of pressure on U.S. oil and gas firms.

Meanwhile, Italy placed the entire country under quarantine in an effort to curb the spread of the coronavirus. And cases in the U.S. have slowly started to climb. Wall Street is now looking to what lawmakers will do next, and might have a better understanding soon, with President Trump and his administration discussing how to curb possible economic pain.

The slowdown in travel caused by the coronavirus looks poised to hurt airlines. American Airlines (AAL - Free Report) and Delta (DAL - Free Report) both joined United Airlines (UAL - Free Report) and said they would reduce the number of flights. And Southwest (LUV - Free Report) CEO Gary Kelly told employees that he would take a pay cut.

The episode then closes with why Lennar is a Zacks Rank #1 (Strong Buy) stock, as part of a strong Home Builders industry, which includes KB Home (KBH - Free Report) , PulteGroup, Inc. (PHM - Free Report) , TRI Pointe Group, Inc. (TPH - Free Report) , and other highly-ranked stocks. 

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