Update (Oct. 17, 2023): For today's live markets coverage, see here.
Stocks and Treasury yields climbed Monday as the rush to safe havens let up slightly at the outset of a big week for corporate earnings.
The Nasdaq gained 1.2%, while the S&P 500 climbed 1.1% and the Dow Jones Industrial Average rose 0.9%.
Oil, gold, and the Cboe Volatility Index, or the "fear index," all retreated after jumping Friday. The price of bitcoin jumped to $29,000 Monday morning—before sliding back to $28,500—on signs a spot Bitcoin ETF is closer on the horizon the previously thought.
Charles Schwab (SCHW) kicked off the first full week of big third-quarter earnings reports this morning when it reported deposits fell again last quarter. Johnson & Johnson (JNJ), Bank of America (BAC), and Goldman Sachs (GS) will follow tomorrow. Also reporting this week: Tesla Inc (TSLA), Procter & Gamble Co. (PG), Taiwan Semiconductor Manufacturing Co. (TSM), and American Express (AXP).
Stocks were mixed Friday, with the Dow advancing on strong earnings from components UnitedHealth Group (UNH) and JPMorgan Chase & Co. (JPM) while the S&P 500 and Nasdaq slipped.
S&P 500 Gains and Losses Today
October 16, 2023 05:16 PM EDT
Here are the S&P 500 stocks that gained and lost the most today, and the stories behind today's market movers.
Dow Gains More Than 300 Points Ahead of Earnings Reports
October 16, 2023 04:46 PM EDT
The Dow Jones Industrial Average had its best day in nearly a month, gaining more than 0.9%, or 314 points, as investors digested more dovish remarks from Fed policymakers and prepared for a string of earnings reports this week, including from five of the 30 Dow components.
Shares of Nike (NKE) gained 2.1% to lead the Dow higher, bringing the stock’s winning streak to five sessions. The stock has gained nearly 15% since its late-September earnings report, in which earnings and gross margin beat expectations.
Shares of Travelers Companies (TRV), Salesforce (CRM), and Verizon (VZ) all moved higher by about 2%.
Goldman Sachs (GS) shares increased 1.6% ahead of its earnings report before markets open tomorrow. Johnson & Johnson (JNJ), which will also report early tomorrow, gained 0.4%.
The Walt Disney Company (DIS) rose 1.6% on the 100th anniversary of Walt and Roy Disney founding the Disney Brothers Cartoon Studio.
Walgreens Boots Alliance (WBA) shares declined 2%, falling for the second consecutive session after surging last Thursday when the announcement of cost-cutting efforts overshadowed a disappointing earnings report.
UnitedHealth Group (UNH) shares declined 0.3%, giving back some of its gains following last week’s better-than-expected earnings report.
JPMorgan Chase (JPM) shares slipped 0.1%. Shares rose 1.5% last Friday after the bank’s earnings beat analysts’ expectations on higher interest income.
Oil Prices Slide on Reports of Possible U.S.-Venezuela Deal
October 16, 2023 04:11 PM EDT
Oil futures slipped Monday on reports the U.S. had reached an agreement with Venezuelan President Nicolás Maduro that would ease sanctions on Venezuela’s oil industry in exchange for his promise of a competitive presidential election next year.
Venezuela is home to the world’s largest proven oil reserves, with an estimated 303 billion barrels of extractable oil within its territory. Its ability to sell that oil has been hampered by U.S. sanctions that ban U.S. entities from doing business with Venezuela’s state-owned oil enterprise.
Loosening restrictions on Venezuelan oil could increase the supply of oil to global markets that have been squeezed amid production cuts by Venezuela’s OPEC peers, like Saudi Arabia. Greater supply would relieve some of the pressure that’s caused prices to surge since July.
Fed Official: Central Bank Should 'Hold Rates Where They Are'
October 16, 2023 03:33 PM EDT
The Federal Reserve shouldn’t raise its influential fed funds rate above the 22-year high where it’s been since July, Patrick Harker, president of the Federal Reserve Bank of Philadelphia and a voting member of the central bank’s policy committee, said Monday. Instead, the Fed should be patient and let today’s high interest rates do their job of slowing the economy and putting a lid on inflation, he said.
“We are at the point where we can hold rates where they are,” Harker said in a speech to the Mortgage Bankers Association in Philadelphia, according to prepared remarks.
Several Fed officials who vote on monetary policy said last week they favored holding the rate steady. However, several emphasized the possibility of more rate hikes if inflation doesn’t stay on a downward trajectory.
News Corp Shares Jump After Report Activist Investor Is Looking to Make Changes
October 16, 2023 02:54 PM EDT
Shares of News Corp (NWSA) gained Monday following reports activist investor Starboard Value has added to its stake in Rupert Murdoch’s media company and is looking to make strategic and governance changes.
Starboard Value is said to be recommending spinning off News Corp's digital real estate businesses, including Realtor.com, and ending the firm’s dual-class stock structure. That division has given Murdoch and his family voting rights that Starboard believes exceed their economic ownership. The family trust controls 39% of the voting shares.
News Corp shares hit their highest level in a year and a half following the news. Shares were 4% higher as of Monday afternoon, and up more than 22% year-to-date.
Lululemon, Hubbell Shares Rise Ahead of Joining the S&P 500
October 16, 2023 01:33 PM EDT
Lululemon (LULU) stock price jumped and was about 10% higher as of 1 p.m. Eastern Time Monday, ahead of the athletic wear company’s upcoming inclusion on the S&P 500 Index. Shares of Hubbell (HUBB), which designs, manufactures, and sells electrical products, were more than 3% higher ahead of joining the index on Wednesday as well.
Lululemon is set to replace Activision Blizzard (ATVI), which has been acquired by Microsoft (MSFT), while Hubbell would replace Organon & Co. (OGN), which will be moved to the S&P SmallCap 600, a small-cap benchmark.
Charles Schwab Beats Profit Estimates and Moves to Save $1 Billion Per Year
October 16, 2023 12:44 PM EDT
Charles Schwab (SCHW) shares jumped in early trading on Monday after the discount brokerage and investment reported fiscal 2023 third-quarter earnings per share of $0.77, beating estimates.
Revenue slipped 16% from a year ago to $4.61 billion, just short of forecasts. Net interest revenue of $2.24 billion was more than anticipated.
CEO Walt Bettinger explained that, after absorbing $1.3 trillion in TD Ameritrade client assets over the Labor Day weekend, Schwab would be focusing on “advancing our strategic key initiatives.” He said the company “has identified a number of opportunities for increased efficiency,” that once fully implemented are expected to provide at least $1 billion in incremental annual expense savings.
Shares were 5% higher Monday afternoon but were still down 35% year-to-date.
Waning Demand for Covid Products To Hit Pfizer Earnings
October 16, 2023 12:03 PM EDT
Pfizer (PFE) lowered its full-year 2023 revenue guidance by $9 billion on Friday after it said the U.S. government would return nearly 8 million doses of its Covid antiviral Paxlovid, resulting in a write-down of over $4 billion.
The company also lowered its full-year sales outlook for its Covid vaccine, Comirnaty, by $2 billion, citing lower-than-expected vaccination rates. BioNTech (BNTX), the German firm that co-developed Comirnaty, said it expects an up to 900 million euro write-down owing to slumping vaccine demand.
Pfizer also laid out a cost-cutting plan that it expects to save it $1 billion this year and $2.5 billion in 2024. Still, the company lowered its full-year earnings guidance to a range of $1.45 to $1.65 a share, from its original guidance of $3.25 to $3.45.
Meanwhile, Moderna (MRNA) reiterated its 2023 Covid sales guidance. It still expects to sell between $6 billion and $8 billion of its Covid-19 vaccine this year.
Shares of Pfizer gained more than 5% on its cost-cutting plan and an investor call held Monday morning. Moderna and BioNTech were both 5% lower by midday Monday.
Rite Aid Files For Bankruptcy, Will Close Underperforming Stores
October 16, 2023 11:04 AM EDT
Drugstore chain Rite Aid (RAD), which has struggled in the face of slowing sales and opioid litigation, filed for bankruptcy Sunday.
The company said that its agreement with creditors includes a "store optimization" plan, which will lead to the closure of underperforming outlets. Some of those creditors have committed to fresh funding of $3.45 billion to the turnaround plan.
Interim CEO Elizabeth Burr will hand over the reins to Jeffrey Stein, founder of Stein Advisors, an advisory firm that specializes in restructuring and bankruptcies. Burr will remain at the company as a director.
Bitcoin Jumps on ETF Optimism
October 16, 2023 10:38 AM EDT
Bitcoin soared Monday morning on optimism that a Bitcoin spot ETF is on the horizon.
According to a Bloomberg report Friday, the Securities and Exchange Commission does not intend to appeal a court’s decision in August that blocked the SEC’s denial of crypto management firm Grayscale’s application to convert its Bitcoin trust into an ETF.
Bitcoin jumped from about $27,300 to nearly $28,000 around 1 a.m. ET Monday. It soared again when U.S. markets opened at 9:30 a.m. ET, leaping more than 8% to as high as $29,580—its biggest intraday jump since June when several major asset managers, including BlackRock and Invesco, filed their own Bitcoin ETF applications.
Today's second surge was shortlived, with prices slipping back down to about $28,000 before 10 a.m.
Stocks Making the Biggest Moves Premarket
October 16, 2023 09:25 AM EDT
- Lululemon Athletic Inc. (LULU): Shares rose more than 6% after S&P Dow Jones Indices said Friday the sportswear company would replace Activision Blizzard, which was acquired by Microsoft (MSFT) last week, in the S&P 500 starting Wednesday.
- Bitcoin miners: Shares of bitcoin miners Marathon Digital (MARA) and Riot Platforms (RIOT) gained about 5% amid optimism that a spot Bitcoin ETF is on the horizon, introducing the cryptocurrency to the nearly $7 trillion ETF market.
- Instacart (CART): Shares of the grocery delivery service rose about 2% after 7 Wall Street firms, including Goldman Sachs and Citi, initiated coverage of the newly public company with a buy rating.
- BioNTech SE (BNTX): Shares of the German pharmaceutical company fell more than 4% after it said slumping demand for Covid products would force it to write down up to 900 million euros worth of vaccine inventory. Pfizer (PFE), with which it developed its Covid-19 vaccine, announced similar write-offs and lowered its full-year vaccine sales forecast by $2 billion.
- Tesla Inc. (TSLA): Shares fell about 1% as investors awaited the EV leader’s earnings report Wednesday. After the company reported a drop in deliveries last quarter, investors will be looking closely at the company’s margins, which are expected to take a hit from price cuts.
- Nvidia Corp. (NVDA): The chip company’s shares slipped 1% after the Biden administration said it was expanding restrictions on the sale of chips to China as it seeks to further constrain the sale of graphics chips, like Nvidia’s, used for artificial intelligence.
5 Things to Know Before Markets Open
October 16, 2023 08:55 AM EDT
Here's what investors need to know to start their day:
- The Biden Administration is reportedly considering further tightening restrictions on China’s access to American artificial intelligence (AI) chips, adding new rules to restrictions that are set to go into effect in the coming days.
- Drugstore chain Rite Aid (RAD) filed for Chapter 11 bankruptcy protection after it reached a deal with creditors that included restructuring to evaluate its retail footprint and close underperforming locations.
- Pfizer (PFE) shares fell 3.1% in premarket trading after the drug maker cut $9 billion from its full-year revenue guidance and warned that layoffs could be coming.
- Activist shareholder firm Starboard Value will reportedly push for strategic and governance changes at News Corp (NWS) including spinning off its real estate division and ending its dual-class share structure.
- Shares of drug maker Novavax (NVAX) plunged by more than 4% after European Union regulators delayed its approval of the company’s Covid-19 vaccine targeting the XBB variant.
Futures Rise at Outset of Big Earnings Week
October 16, 2023 08:31 AM EDT
Futures contracts connected to the Dow Jones Industrial Average were up more than 0.4% about an hour before markets opened Monday.
S&P 500 futures advanced 0.3%.
Nasdaq 100 contracts wavered, seesawing between gains and losses.