By Noel Randewich and Chuck Mikolajczak

(Reuters) - Wall Street's most controversial stock may be about to go mainstream.

Tesla (NASDAQ:TSLA) Inc appears on the verge of joining the S&P 500, a major accomplishment for Chief Executive Officer Elon Musk that would unleash a flood of new demand for the electric car maker's shares, which have already surged 500% over the past year.

Higher-than-expected second-quarter vehicle deliveries, announced last week, have analysts increasingly confident the company will show a profit in its quarterly report on July 22. That would mark Tesla's first cumulative four-quarter profit, a key hurdle to be added to the S&P 500.

With a market capitalization of about $250 billion, Tesla would be among the most valuable companies ever added to the S&P 500, larger than 95% of the index's existing components. It would have a major impact on investment funds that track the index.

For a graphic on Tesla potentially in the S&P 500: https://fingfx.thomsonreuters.com/gfx/mkt/bdwvkanyyvm/VokA0-tesla-in-the-s-amp-p-500.png

While analysts and investors have recently become more confident of Tesla's addition, an S&P Dow Jones spokeswoman declined to comment about specific changes to the index.

Howard Silverblatt, a senior index analyst at S&P Dow Jones, had to look back to the dot-com era to recall a comparable situation. In 1999, Yahoo surged 64% in five trading days between the announcement that it would be added to the index on Nov. 30 and its inclusion after the close of trading on Dec. 7. Yahoo's market capitalization at the time was about $56 billion.

For a graphic on Yahoo's 1999 S&P 500 debut: https://tmsnrt.rs/3iOlA8o

"The lesson learned from Yahoo was that when you have an up and coming issue that may possibly go into the index, you should already own a little of it," said Silverblatt. "If you had to get into that stock, you were paying a heck of a premium compared to owning it a week earlier."

Funds that attempt to identically track the S&P 500 have at least $4.4 trillion of assets, according to S&P Dow Jones, and those funds would need to buy Tesla shares quickly to avoid errors tracking the index's performance.

Ivan Cajic, head of index & ETF research at Virtu Financial (NASDAQ:VIRT) estimates index managers would need to own roughly 25 million shares of Tesla stock, currently worth $34 billion.

"You have all the index funds that have no choice but to include it," said Tim Ghriskey, chief investment strategist at Inverness Counsel in New York. "That is one reason why it has been so strong here, in anticipation of that."

Additionally, actively managed investment funds that benchmark their performance to the S&P 500 will be forced to decide whether to buy Tesla shares. Such funds manage trillions of dollars in additional assets.

"Even if you don't like Tesla and you think it's overvalued, the fact that it is going into the index would mean trillions of dollars would have some kind of position," said Jim Bianco, head of Bianco Research in Chicago. "As part of their benchmark, portfolio managers would not be able to ignore it."

Up 43% in just the past eight sessions, Tesla is among the most loved - and hated - stocks on Wall Street. It is the U.S. stock market's purest play bet on the rise of renewable energy and the decline of fossil fuels, and Tesla's Model 3 sedan has made major inroads among consumers.

For a graphic on As Tesla rallies, short bets hit record levels: https://fingfx.thomsonreuters.com/gfx/mkt/xlbpgoddbpq/Yfifp-as-tesla-rallies-short-sellers-risk-more.png

However, short sellers are betting $19 billion that Tesla's shares will fall, the largest short level on record for a U.S. company, in dollars, according to S3 Partners.

Bears point to looming competition from Porsche, General Motors (NYSE:GM) and other longer-established rivals. They are also skeptical of Tesla's corporate governance under Musk, who in 2018 agreed to pay $20 million and step down as chairman to settle fraud charges.

Traders betting Tesla could be added to the S&P 500 have almost certainly contributed to the recent rally. However, Bianco warned that the stock could reverse if Tesla is not added to the S&P 500.

By Lawrence Hurley and Jan Wolfe

WASHINGTON (Reuters) - The U.S. Supreme Court on Thursday firmly rejected President Donald Trump's arguments for sweeping presidential immunity and ruled that a New York prosecutor can obtain his financial records but prevented - at least for now - Democratic-led House of Representatives committees from getting similar documents.

The twin 7-2 rulings authored by conservative Chief Justice John Roberts mark another milestone in Trump's tumultuous presidency and in the short term prevent details of his finances from becoming public because lower courts must resolve lingering issues.

The businessman-turned politician, seeking re-election on Nov. 3, has fought tenaciously to keep his tax returns and other elements of his finances secret - and the rulings spare him of any major revelation at a sensitive time. But looking further ahead, Trump faces possible future criminal prosecution in his native New York, perhaps after he leaves office.

The Supreme Court emphasized that there are limits to the powers of the presidency and stoutly reaffirmed the principle that not even the president is above the law - a message delivered 3-1/2 years into a presidency in which Trump has repeatedly skirted the norms of American political conduct.

Trump's two Supreme Court appointees, conservatives Neil Gorsuch and Brett Kavanaugh, joined Roberts and the four liberal justices in both rulings, spurning Trump's arguments that the Constitution gave him absolute immunity from any criminal proceedings as a sitting president.

Manhattan District Attorney Cyrus Vance, a Democrat, and the three House committees all issued subpoenas to third parties for the records, not to the Republican president himself. Trump sued to block enforcement of the subpoenas.

The court in the New York case ruled that the subpoena to Trump's long-term accounting firm, Mazars LLP, for tax returns and other financial records to be turned over to a grand jury as part of Vance's criminal investigation can be enforced.

The justices rebuffed Trump's broad arguments on expansive presidential powers in a showdown with Congress as he tried to block subpoenas by lawmakers to Mazars and two banks - Deutsche Bank (DE:DBKGn) and Capital One - for his financial records. In doing so, the court also faulted the broad arguments made by the House and sent the litigation back to lower courts, delaying the final outcome.

Trump portrayed himself as a victim, calling the subpoenas a "pure witch hunt" and a "hoax" in comments to reporters. On Twitter, he wrote, "This is all a political prosecution ... and now I have to keep fighting in a politically corrupt New York. Not fair to this Presidency or Administration!"

Trump's argument that he was immune from any criminal process "runs up against the 200 years of precedent establishing that Presidents, and their official communications, are subject to judicial process," Roberts wrote.

"We affirm that principle today and hold that the president is neither absolutely immune from state criminal subpoenas seeking his private papers nor entitled to a heightened standard of need," Roberts added.

Roberts rejected the suggestion that the decision would subject future presidents to harassment by local prosecutors, noting that the court in 1997 rejected a similar argument made by President Bill Clinton when he faced a civil lawsuit brought by a woman who accused him of making unwanted sexual advances - litigation the court refused to delay.

The court in 1974, Roberts noted, also ruled that President Richard Nixon must turn over audio tapes in the Watergate scandal that eventually drove him to resign.

'HE IS HIDING'

Unlike other recent presidents, Trump has refused to release his tax returns and other documents that could provide details on his wealth and the activities of his family real-estate company, the Trump Organization.

House Speaker Nancy Pelosi said Democrats will continue to investigate Trump and seek to enforce the subpoenas.

"Congress's constitutional responsibility to uncover the truth continues, specifically related to the President's Russia connection that he is hiding," Pelosi said, referring to the possibility that Trump's financial records could show such an entanglement.

Roberts said lawmakers will need to further explain the need for the records at the lower court, which would then assess the burden placed on the president.

Jay Sekulow, Trump's personal lawyer, said he would "raise additional constitutional and legal issues in the lower courts."

Vance's investigation into Trump and the Trump Organization was spurred by disclosures of hush payments to two women who said they had past sexual relationships with the president, pornographic film actress Stormy Daniels and former Playboy model Karen McDougal - relationships he has denied.

Trump argued that Congress lacked a valid purpose for seeking his records and that such disclosure would compromise his and his family's privacy and distract him from his duties. In the Vance investigation, Trump's lawyers argued before a lower court that law enforcement officials would not have the power to investigate him even if he shot someone on New York's Fifth Avenue.

The House Oversight Committee issued its subpoenas after Michael Cohen, his former lawyer, told Congress Trump had inflated and deflated certain assets on financial statements between 2011 and 2013 in part to reduce his real estate taxes.

The House Financial Services Committee is examining possible money laundering in U.S. property deals involving Trump. The House Intelligence Committee is investigating whether Trump's dealings left him vulnerable to the influence of foreign individuals or governments.

By Caroline Valetkevitch

(Reuters) - The S&P 500 and Dow dropped on Thursday as investors worried about another round of business shutdowns to contain a surge in coronavirus cases and began to shift their focus to earnings, while the Nasdaq hit another record closing high.

The United States saw more than 60,000 new COVID-19 infections on Wednesday, setting a single-day global record while Florida and Texas reported a record one-day increase in deaths.

Investors also began to turn their focus to the second-quarter earnings season, which shifts into higher gear next week. S&P 500 companies are expected to post a more than 40% decline in year-over-year earnings, which would be the biggest quarterly profit drop since the 2008 financial crisis, based on IBES data from Refinitiv.

Walgreens Boots Alliance Inc (O:WBA) shares dropped after it reported a quarterly loss compared with a profit a year earlier, hurt by non-cash impairment charges of $2 billion as COVID-19 disrupted business at its Boots UK division. Its stock closed 7.8% lower.

"We're heading into earnings season, and you're seeing some troubling trends," said Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia.

"I expect a lot of confusing numbers and guidance. COVID is certainly not behind us in any way, shape or form, so maybe the V gets elongated some," he said.

The Nasdaq registered its fifth record closing high in six days, helped by gains in Amazon.com (O:AMZN), Microsoft Corp (O:MSFT), Nvidia (O:NVDA), Apple Inc (O:AAPL). Also, Tesla (O:TSLA) extended recent gains, ending up 2.1%.

The Dow Jones Industrial Average (DJI) fell 361.19 points, or 1.39%, to 25,706.09, the S&P 500 (SPX) lost 17.89 points, or 0.56%, to 3,152.05 and the Nasdaq Composite (IXIC) added 55.25 points, or 0.53%, to 10,547.75.

The benchmark S&P 500 is still up more than 40% from its March 23 closing low.

Helping stocks early in the day was data showing the number of Americans filing for jobless benefits dropped to a near four-month low last week. A record 32.9 million people though were collecting unemployment checks in the third week of June.

A batch of upbeat economic data including the record pace of job additions in June has underscored that the stimulus-fueled domestic economy was on the path to recovery.

In a bullish signal for near-term momentum, the benchmark S&P 500's chart formed a "golden cross" pattern, in which its 50-day moving average vaulted above the 200-day moving average.

Declining issues outnumbered advancing ones on the NYSE by a 2.56-to-1 ratio; on Nasdaq, a 2.19-to-1 ratio favored decliners.

The S&P 500 posted 33 new 52-week highs and one new low; the Nasdaq Composite recorded 117 new highs and 33 new lows.

Volume on U.S. exchanges was 10.73 billion shares, compared with the 12.23 billion average for the full session over the last 20 trading days.

U.S. stocks were mixed after the close on Thursday, as gains in the Technology, Consumer Services and Healthcare sectors led shares higher while losses in the Oil & Gas, Telecoms and Financials sectors led shares lower.

At the close in NYSE, the Dow Jones Industrial Average lost 1.39%, while the S&P 500 index lost 0.56%, and the NASDAQ Composite index climbed 0.63%.

The best performers of the session on the Dow Jones Industrial Average were Walmart Inc (NYSE:WMT), which rose 2.66% or 3.31 points to trade at 127.75 at the close. Meanwhile, Cisco Systems Inc (NASDAQ:CSCO) added 1.94% or 0.89 points to end at 46.70 and Microsoft Corporation (NASDAQ:MSFT) was up 0.70% or 1.49 points to 214.32 in late trade.

The worst performers of the session were Walgreens Boots Alliance Inc (NASDAQ:WBA), which fell 7.76% or 3.28 points to trade at 39.01 at the close. Raytheon Technologies Corp (NYSE:RTX) declined 4.75% or 2.90 points to end at 58.11 and Chevron Corp (NYSE:CVX) was down 4.18% or 3.61 points to 82.74.

The top performers on the S&P 500 were F5 Networks Inc (NASDAQ:FFIV) which rose 7.94% to 144.81, Advanced Micro Devices Inc (NASDAQ:AMD) which was up 7.16% to settle at 57.26 and Pentair PLC (NYSE:PNR) which gained 4.59% to close at 38.30.

The worst performers were Mohawk Industries Inc (NYSE:MHK) which was down 19.99% to 73.12 in late trade, Hess Corporation (NYSE:HES) which lost 9.41% to settle at 44.68 and TechnipFMC PLC (NYSE:FTI) which was down 8.34% to 6.81 at the close.

The top performers on the NASDAQ Composite were Golden Bull Ltd (NASDAQ:DNJR) which rose 62.00% to 2.4300, Nuzee Inc (NASDAQ:NUZE) which was up 40.97% to settle at 16.00 and Big 5 Sporting Goods Corporation (NASDAQ:BGFV) which gained 39.58% to close at 2.68.

The worst performers were Bed Bath & Beyond Inc (NASDAQ:BBBY) which was down 24.50% to 7.86 in late trade, China Finance Online Co Limited (NASDAQ:JRJC) which lost 21.86% to settle at 7.97 and Vericity Inc (NASDAQ:VERY) which was down 17.88% to 8.13 at the close.

Falling stocks outnumbered advancing ones on the New York Stock Exchange by 2178 to 618 and 65 ended unchanged; on the Nasdaq Stock Exchange, 1903 fell and 766 advanced, while 38 ended unchanged.

Shares in Microsoft Corporation (NASDAQ:MSFT) rose to all time highs; gaining 0.70% or 1.49 to 214.32.

The CBOE Volatility Index, which measures the implied volatility of S&P 500 options, was up 4.20% to 29.26.

Gold Futures for August delivery was down 0.70% or 12.70 to $1807.90 a troy ounce. Elsewhere in commodities trading, Crude oil for delivery in August fell 3.28% or 1.34 to hit $39.56 a barrel, while the September Brent oil contract fell 0.05% or 0.02 to trade at $42.36 a barrel.

EUR/USD was up 0.04% to 1.1286, while USD/JPY rose 0.05% to 107.24.

The US Dollar Index Futures was up 0.40% at 96.752.

(Bloomberg) -- A brutal selloff that’s made China’s government bonds one of the world’s worst performers is showing no signs of ending any time soon.

That’s because the chances of significant monetary easing from the country’s central bank are becoming even more remote, as the roaring stock market increases government concerns over the risk of an equity bubble. Beijing will want to avoid the kind of debt-fueled stock binge that ended chaotically five years ago, which was partly encouraged by cheap and plentiful money in the financial system.

China’s 10-year government bond yield rose the most since late 2016 on July 6, helping make the notes the world’s third-worst performer the past week. The rout comes at a time when the debt is already under pressure from a surge in issuance and Beijing’s cautious approach to liquidity. Sovereign notes are now the cheapest relative to equities in two years.

“The stock rally and bond tumble exceeded my expectations -- they were too fast, too sudden, and the past week feels like half a year,” said Ji Tianhe, a strategist at BNP Paribas (OTC:BNPQY) SA in Beijing. He forecasts that the 10-year yield will continue climbing and match last year’s high of around 3.4% in coming months. “The central bank will refrain from major easing due to the advance in equities,” he said.

With further issuance on the horizon, the declining trend looks set to continue. The notes should be avoided for now, say analysts from BNP Paribas and ANZ Bank China Co. The yield on China’s 10-year government bonds has jumped more than 20 basis points the past week, the worst five-day performance since December 2016.

Here’s a look at the factors challenging the bond market:

Stock Rally

The tumble in debt mirrors a rally in equities. Stock trading turnover has soared, margin debt has grown at the fastest pace since 2015 and online trading platforms have struggled to keep up. Bullish articles in state-run media spurred the mood.

The advance makes it even harder for the People’s Bank of China to ease -- lower funding costs also make it cheaper for investors to load up on debt and buy stocks. Loose monetary policy was one driver behind the 2015 bubble, the bursting of which wiped out $5 trillion of equity value.

“The rally in equities has disrupted China’s monetary policy. Now Beijing can’t send out a strong easing signal as that will create a stock bubble,” said Xing Zhaopeng, a markets economist at ANZ. “We won’t likely see any major easing measures over the next month, and that will be bad news for bonds.”

PBOC Caution

The central bank has repeatedly disappointed the market by not loosening its monetary policy aggressively. It has refrained from cutting the amount of cash lenders need to set aside as reserves, despite Beijing signaling last month that such an easing measure could be used. The PBOC in the past two days maintained a neutral position after draining cash from the financial system for eight straight sessions, exacerbating concerns over a liquidity shortage.

Still, analysts see an inflection point when the spike in government yields begin to hurt the economy, which may trigger action from the central bank. Collateral damage from the slumping sovereign-bond market is already roiling the credit market, where companies are shelving plans to sell debt as borrowing costs surge. They canceled about $11 billion worth of deals in June alone, according to data compiled by Bloomberg.

“The 10-year yield will fluctuate above 3% for a while,” said Chen Qi, chief strategist at private fund management company Shanghai Silver Leaf Investment Co. She added that while the PBOC will maintain an easing bias, the era of very loose monetary policy has passed.

Spike in Issuance

By the end of July, the central government intends to sell 1 trillion yuan ($143 billion) of so-called special notes, with the proceeds put toward fighting the virus outbreak. Banks will have the incentive to preserve cash to buy these higher-yielding securities, meaning China’s sovereign notes will suffer from the issuance increase. More debt is expected to hit the market in August and September, as regional authorities unleash their own launches delayed by the special bonds, meaning pressure on sovereign notes should persist throughout the third quarter.

©2020 Bloomberg L.P.

By Christiana Sciaudone

Investing.com --  The market keeps showing a whole heaping lot of love for tech, with the Nasdaq hitting a record for a second day running.

The Dow Jones, on the other hand, fell 1.4%, dragged down by Walgreens Boots Alliance Inc (NASDAQ:WBA), 3M (NYSE:MMM) and Dow Inc (NYSE:DOW).

Coronavirus infections and deaths keep coming, with top U.S. pandemics expert Anthony Fauci, speaking on a podcast hosted by The Wall Street Journal, saying that new Covid-19 cases were seeing “exponential growth.” 

“It went from an average of about 20,000 to 40,000 and 50,000. That’s doubling. If you continue doubling, two times 50 is 100,” Fauci said. “Any state that is having a serious problem, that state should seriously look at shutting down. It’s not for me to say because each state is different.”

Data shows that more than 3 million Americans have already been infected by Covid-19, with a death toll exceeding 133,000. On Wednesday, the United States reported a daily record of more than 60,000 cases. 

Walgreens and Bed Bath & Beyond Inc (NASDAQ:BBBY) dropped as retailers suffered from a weak quarter. Banks are up next week.

Here are three things that may move markets tomorrow:

1. Biden bashes Wall Street

Presumptive Democratic Presidential Nominee Joe Biden ripped rival Donald Trump and Wall Street as he started rolling out his economic plans, if elected. The federal government would spend $400 billion on manufacturing and $300 billion on research and development under an economic plan, the former Vice President said, according to USA Today. 

“It’s time corporate America paid their fair share in taxes,” Biden said. “The days of Amazon (NASDAQ:AMZN) paying nothing in federal income tax will be over.”

Biden has an “incredibly stable and unusually large” lead over Trump, according to the polling website FiveThirtyEight. Of course, the media also thought Hillary Clinton was bound to win four years ago. 

2. Oil finally slides

Eyes are on oil after prices slumped as much as 3% on Thursday, the most in over two weeks, finally seeming to acknowledge that the nascent economic recovery in the U.S. is being quashed as infections rise and cities shut back down. 

“The virus spread is not plateauing as many populous states (Texas and Florida) are still seeing significant increases in hospitalizations,” said Ed Moya, senior market strategist at New York-based OANDA said in a note on oil.   

U.S. gasoline demand was falling in areas where lockdowns were being reinstated, Lachlan Shaw, head of commodity research at National Australia Bank (OTC:NABZY), was quoted saying by Reuters, although demand for fuels continued to recover in the economically-crucial East Coast. 

3. Banks Ahead!

Banks were in the red Thursday ahead of earnings reports that kick off next week. The S&P 500 Financials was down 1% as parts of the U.S. close back down amid growing coronavirus infections across the country. Citigroup Inc (NYSE:C) dropped 2.8% and Wells Fargo (NYSE:WFC) fell 2.1%

Bank of America (NYSE:BAC) fell 1.4% after DA Davidson downgraded the stock to neutral from buy. DA Davidson upgraded JPMorgan Chase (NYSE:JPM) & Co., but shares nonetheless fell 2.2%. 

Investors will be watching bank earnings for signs that the business shutdowns and massive job losses because of Covid-19 have begun to erode credit quality, which could leave banks holding a rising number of bad loans. 

By Diane Bartz

WASHINGTON (Reuters) - The U.S. Supreme Court agreed on Thursday to decide whether the Federal Trade Commission can continue to require scam artists and firms that engaged in deceptive business practices to return money improperly obtained from consumers.

The justices will hear the FTC's appeal of a lower court's 2019 ruling that the agency could demand that alleged scam artists stop their behavior using a preliminary injunction but could not clawback any ill-gotten gains in a case involving a company called Credit Bureau Center LLC.

The court also took up a companion case involving a company called AMG Capital Management that appealed a ruling by the San Francisco-based 9th U.S. Circuit Court of Appeals that endorsed the FTC's authority to recoup ill-gotten gains.

In appealing a ruling by the Chicago-based 7th U.S. Circuit Court of Appeals in the Credit Bureau Center case, the FTC in court papers described the challenge to its practice of demanding return of ill-gotten gains as potentially "eliminating one of its most important and effective enforcement tools."

In the case at issue, consumers responded to ads for apartments on the advertising website Craigslist, only to find the homes did not exist or were not for rent. But in the process they were required to click a link for a free credit score from company, which also used the names MyScore and eFreeScore. This turned out to be a credit monitoring service costing $29.94 per month.

A federal judge ordered the credit monitoring website owner to pay $5.2 million in restitution.

The Supreme Court's consideration of the legal disputes comes at a time when the United States is awash in scams, with some taking advantage of fears about the spread of the coronavirus to bilk unsuspecting consumers. Robocalls inundate landlines touting phony medical devices and other deceptive offers. Since they often originate overseas, U.S. law enforcement has difficulty in combating the scam artists.

The cases will be heard together in the court's next term, which starts in October.

By Katanga Johnson

WASHINGTON (Reuters) - An official with the U.S. Securities and Exchange Commission's (SEC) accounting oversight arm on Thursday said it sees "no prospects" of being able to properly do its job overseeing disclosures and preventing accounting fraud in China, amid ongoing consideration by the Trump administration of how to stave off the possible investor risk.

The comments by William Duhnke, chairman of the Public Company Accounting Oversight Board (PCAOB), comes as the latest in a series of statements in response to pressure from the White House and lawmakers to reduce the perceived risks Chinese companies pose to U.S. investors.

"I have been actively engaged with the (Big Four accounting firms) about how, in the absence of access, do we make sure staff can ensure audit quality of U.S.-listed Chinese companies," said Duhnke, who sat on a virtual SEC panel on the topic with other U.S. regulatory authorities.

"We must trust and verify, but we have no ability to verify in China, and no prospects to do so on the horizon."

The SEC has been locked in a decade-long struggle with the Chinese government to inspect audits of U.S.-listed Chinese companies, and its accounting arm is still unable to access those critical records, it has said.

The PCAOB, which was set up by the 2002 Sarbanes-Oxley Act and is overseen by the SEC, is tasked with policing the accounting firms that sign off on the books of the nation’s listed companies. Its problems with Chinese audit quality have been festering since 2011, when scores of Chinese companies trading on U.S. exchanges were accused of accounting irregularities.

Chinese authorities have long resisted audit papers leaving China, making it hard for U.S. regulators to check the quality of audits of Chinese companies.

But a bill passed by the U.S. Senate which, if signed by President Donald Trump, would require U.S.-listed foreign companies to disclose levels of government control. It would also require that Chinese companies comply with U.S. oversight of their audits or potentially face being delisted.

Chinese firms accounted for about a third, or some $279 billion, of funds raised globally via IPOs in the past five years. About half of that was offshore of China, mostly through New York and Hong Kong floats.[nL4N2DL03X]

Amy McGarrity, the chief investment officer at the Public Employees' Retirement Association of Colorado said that investors should have access to "ample" disclosures, but was worried restricting listing of Chinese companies could harm U.S. capital markets and force investors to private markets.

By Jonathan Stempel

(Reuters) - A U.S. judge on Thursday refused to grant immediate bail to a Massachusetts father and son who are trying to avoid extradition to Japan, after being accused of helping smuggle former Nissan (OTC:NSANY) Motor Co chairman Carlos Ghosn out of that country.

U.S. District Judge Indira Talwani in Boston said Michael Taylor and Peter Taylor, who have been detained since their May 20 arrests, have yet to show they deserve freedom, in part because a magistrate judge also weighing bail has yet to rule.

The Taylors said bail was warranted because they might contract COVID-19 at the suburban Norfolk County Correctional Center, where 36 inmates and staff have tested positive. Michael Taylor, a Special Forces veteran, is missing part of one lung.

Talwani also said the Taylors have not shown it likely there was no probable cause to detain them, after they argued that the offenses described in Japan's extradition requests would not support their extradition.

"Petitioners have not demonstrated here the high probability of success necessary to establish special circumstances justifying release on bail in an extradition case while these legal issues are being resolved," Talwani wrote.

Lawyers for the Taylors did not immediately respond to requests for comment.

Ghosn escaped in late December to his childhood home of Beirut via Istanbul from Japan, where he had been under house arrest on financial crimes charges. He was transported in a large black box to an awaiting private jet.

Lebanon has no extradition treaty with Japan.

At a Wednesday hearing, federal prosecutor Stephen Hassink called the Taylors an "extraordinary flight risk."

Lawyers for the Taylors disagree, and have said their clients will abide by all reasonable bail conditions.

On Tuesday, the magistrate judge, Donald Cabell, refused to quash the Taylors' arrest warrants. He has yet to explain why. Another hearing before Talwani is scheduled for July 28.

By Christiana Sciaudone

Investing.com --   Financials traded lower on Thursday ahead of earnings reports that start being released next week. The S&P 500 Financials fell 2.2%, and the Dow fell 1.4%.

Banks are falling as parts of the U.S. close back down amid growing coronavirus infections across the country. Citigroup Inc (NYSE:C) dropped 2.8%, and Wells Fargo (NYSE:WFC) by 2.1%

Bank of America (NYSE:BAC) fell 1.4%, to $22.77, after DA Davidson downgraded the stock to neutral from buy with a $25 price target, according to Briefing.com. BofA has nine buy ratings, six holds and no sells, according to data compiled by Investing.com, with an average price target of $28.33.

BofA shares are down about 35% in 2020.

DA Davidson upgraded JPMorgan Chase (NYSE:JPM) to buy from neutral, but the stock still dropped 2.2%, to $91.28. The bank has seven buys, six holds and no sells, according to data compiled by Investing.com. JPMorgan has an average price target of $107.58.

JPMorgan is down about 33% this year. 

Both JPMorgan and BofA report earnings next week.

By Yasin Ebrahim

Investing.com – The Nasdaq closed at a record high for the second straight day Thursday as investors continued to seek refuge in megacap tech stocks at a time when the spread of the coronavirus threatens a V shape recovery.  

The S&P 500 lost 0.52%, while the Nasdaq Composite rose 0.63% to close at record hghs, and the Dow Jones Industrial Average fell 1.38%.

Apple (NASDAQ:AAPL), Microsoft (NASDAQ:MSFT), Alphabet (NASDAQ:GOOGL) and Amazon.com (NASDAQ:AMZN), the so-called Fab 5, which collectively make up about 40% of the Nasdaq, ended higher to help keep broader market losses in check.

Beyond tech, however, investors had to contend with losses in stocks tied to the progress of the economy amid rising Covid cases.

Total cases rose to about 3.05 million from 2.98 million yesterday, with the death toll rising to deaths 991 from 932, according to the Center for Disease Control. 

As the outbreak continues to hit key hotspots including Texas, Florida and California, Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases said states should opt to pause reopening measures rather than revert to a complete shut down.

"Rather than think in terms of reverting back down to a complete shutdown, I would think we need to get the states pausing in their opening process," Fauci said.

But that did little quash investor jitters of looming shutdowns that threatened to undo the economic progress seen recently.

The U.S. Department of Labor reported Thursday that initial jobless claims decreased by about 100,000 to 1.31 million in the week ended July 3, beating forecasts for a decline to 1.3 million.

Continuing claims fell 698,000 to 18.06 million, extending a trend of downside momentum that is "encouraging," Jefferies (NYSE:JEF) said. "Continuing claims are down 2.5 million over the past 4 weeks."

Energy led the selloff, paced by a decline oil prices as the pause of reopening measures in pockets of the U.S. offset signs of a recovery in gasoline demand seen a day earlier.

Financials were not far behind, falling 2% just days ahead of quarterly results from banks. The second-quarter earnings reports for a slew of Wall Street banks are likely to underscore a rough quarter amid rising loan loss provisions and weaker profit from lending activity weighed down by near-zero interest rates.

Elsewhere, AMC Networks (NASDAQ:AMCX) rallied as rumors swirled the company had hired Morgan Stanley (NYSE:MS) to explore a sale.

Philip Morris (NYSE:PM) Stock fell by 3.07% to trade at $70.08 by 15:32 (19:32 GMT) on Thursday on the NYSE exchange.

The volume of Philip Morris shares traded since the start of the session was 2.93M. Philip Morris has traded in a range of $70.08 to $72.10 on the day.

The stock has traded at $73.7600 at its highest and $69.3659 at its lowest during the past seven days.