Why Shares of Avis Budget Tanked 10% Wednesday

Shares of vehicle-rental company Avis Budget Group (NASDAQ: CAR) declined 10% Wednesday as markets continued to digest news for the hard-hit auto industry and gloomy economic data.

First, taking a look at broader economic data that sent the Dow roughly 200 points lower toward the end of Wednesday's trading session, the U.S. private sector cut a record 20.2 million jobs in April, the latest sign of how devastating the COVID-19 coronavirus pandemic has hit the economy. All eyes will look to states loosening their stay-at-home orders, in hopes of gradually reopening the economy, for a better idea of how slowly or quickly the economy could recover. One of the hardest-hit industries has been the automotive sector, especially the car rental business that has sent shares of Avis and rival Hertz Global Holdings (NYSE: HTZ) spiraling compared to the S&P 500.