U.S. equities were mixed on Thursday as investors continued to wait on a possible stimulus package from Washington. White House economic adviser Larry Kudlow said that talks were at a "stalemate." Initial jobless claims came in under one million for the first time since March but were still above pre-pandemic records.
Thursday's market by the numbers
- S&P 500 closed down 0.20% for its second negative day in three
- The record close for the S&P 500 stands at 3,386.153 from Feb. 19
- S&P 500 is up 0.66% this week, on pace for its third straight weekly gain
- S&P 500 is up 4.42% year to date
- S&P 500 is 0.59% below its intraday all-time high of 3,393.52 from Feb.19
- S&P 500 is 53.91% above its 52-week low of 2,191.86 from March 23
- Dow closed down 0.29% for its second negative day in three
- Dow is up 1.69% this week on pace for its second straight weekly gain
- Nasdaq Composite closed up 0.27% for its second straight positive day
- Nasdaq is up 23.07% year to date
- Transports closed down 0.45% for their first negative day in 12.— Gina Francolla
Stocks end the session mixed
Stocks moved between gains and losses throughout Thursday's session as better-than-expected unemployment data boosted sentiment, while ongoing stimulus talks in Washington weighed. The Dow finished the session 79 points lower for a loss of 0.28%, while the S&P 500 slipped 0.2%. The Nasdaq Composite, on the other hand, ended the session 0.27% higher. - Pippa Stevens
Stocks hitting new all-time highs
The Dow and S&P 500 traded lower on Thursday, but a number of stocks rose to new records, including:
- Chipotle hit its highest level back to its IPO in Jan. 2006
- Dollar General hit its highest level back to its IPO in Nov. 2009
- Fortune Brands Home & Security hit its highest level since its IPO in Sept. 2011
- Yum China hit its highest level since its spinoff from Yum! Brands in Nov. 2016
- HubSpot hit its highest level since its IPO in Oct. 2014. - Chris Hayes
Final hour of trading: Stocks extend losses into the close
The major averages traded around their session lows with one hour left in the session as the market struggles to break past its February record. The S&P 500 was down 0.4% and the Dow slid 160 points, or 0.6%. The Nasdaq gave up most of its gains, but was still up 0.1%. —Fred Imbert
'Opportunities' ahead in energy names, despite challenges facing the sector says Jefferies
Energy is the worst-performing S&P 500 sector this year amid historically low oil prices, and while Jefferies believes the sector will continue to face challenges, there are buying opportunities.
"Rather than making subjective calls on the oil price, it is better to examine the solvency of the companies," Jefferies' analysts led by Sean Darby wrote in a note to clients Thursday. "The bottom line is that the oil sector is by no means perfect but a weak dollar and a re-opening of capital markets has given companies a life-line. The high negative rolling correlation of the energy companies to investment grade spreads suggests that they are still passing through the eye of the storm. We remain modestly Bullish," he added.
The firm has a buy rating on Chevron and ConocoPhillips, and a hold rating on shares of Exxon. - Pippa Stevens
Here are some of the stocks making headlines in midday trading.
Lyft — The ridesharing stock fell after Lyft reported a 61% drop in revenue for its second quarter. The company reported a loss of 86 cents per share and $339 million of revenue for the quarter, both of which beat Wall Street expectations.
Fossil — Shares of Fossil jumped after the company reported a smaller loss and more revenue than Wall Street analysts expected, according to FactSet. The fashion and manufacturing company said in the earnings release that it had more cash and cash equivalents than total debt as of July 4.
Read more movers here. — Jesse Pound
Recent economic data has been trouncing even the most optimistic estimates
The Citi Economic Surprise Index — which measures how economic data compares to expectations —hit an all-time high last month and has remained around those levels as the latest figures on the economy surpass even the most optimistic estimates.
The index hit a record of 270.80 in mid-July and hovered around 250 on Thursday. Economic indicators ranging from employment growth to manufacturing activity have topped economist expectations. The most recent example came Thursday, when the Labor Department reported initial jobless claims below 1 million for the first time since late March.
"We all knew there would be some eye-popping numbers on the way down and then on the way up … but what we're seeing that's even more encouraging is data beating expectations at a record pace," said Megan Horneman, director of portfolio strategy at Verdence Capital Advisors. —Fred Imbert
Markets at midday: S&P 500 struggles to reach record high
The S&P 500 hovered around the flatline in midday trading as it struggled to continue its run toward the February all-time high. The Dow Jones Industrial Average dipped 51 points, or 0.2%. The Nasdaq Composite outperformed, rising 0.8% as shares of major tech companies rose broadly. —Fred Imbert
Apple to join the 40-year club with latest debt offering
Apple is joining the growing list of companies offering investors a 40-year bond.
The company plans to issue a four-part debt deal, including 5-year, 10-year, 30-year and 40-year securities. Apple last issued debt in May in an $8.5 billion offering.
With super low interest rates and a wide-open debt market, companies have issued record amounts of debt this year. The market for corporate deals has been turbocharged since the Fed announced plans to buy corporate bonds and ETFs in March.
Other companies with 40-year bonds include Boeing, S&P Global, Alphabet, Amazon, Coca-Cola, Pepsico and Walt Disney, according to Credit Flow Research. Early talk is that Apple is seeking to offer about $5 billion in total, but that could increase. So far, the 40-year is expected to price at a spread of 135 basis points over the 30-year Treasury yield, but traders expect that to come in even narrower once it prices.
Apple is joining a small but expanding club of companies looking to stretch out the duration of their debt at very low rates. "There are only certain companies the market will allow to do 40 years," said Andy Brenner of National Alliance. - Patti Domm
Morgan Stanley reiterates overweight ratings on long-term winners Disney and Netflix
Morgan Stanley said in an earnings wrap-up note to clients on Thursday morning that it has "never been more clear" that the future of video consumption is "streamed, bundled and a la carte, wholesale and retail." The firm said it's remaining overweight on NFLX and DIS shares "where we see the leaders in distribution and content respectively scaling to global profitability." Shares of Disney are up almost 1% this week while Netflix is down almost 3%. — Michael Bloom
Kudlow says White House and Democrats are at 'stalemate' over relief bill
President Donald Trump's top economic advisor, Larry Kudlow, said on Thursday that the White House and top Democrats remain firmly at odds over the next wave of Covid-19 relief. Kudlow, who joined CNBC from the White House, said that certain proposals from the Democrats are non-starters with the Trump administration.
"President Trump has acted forcefully because we couldn't reach a deal with the Democrats. They're asking for too much money, $3.5 trillion dollars. We've already spent over $3 trillion," Kudlow said. "So much of the Democratic asks are really liberal, left wish lists. You know, voting rights and aid to aliens and so forth: That's not our game, and the president can't accept that kind of deal."
"We'll wait and see on the negotiations," he added. "Treasury Secretary Mnuchin is working on that, but so far, it's a stalemate. No question." — Thomas Franck
Goldman Sachs bullish on Monster's potential entry into hard seltzer
Goldman Sachs raised its price target on Monster Beverage to a Street high $93 from $87 and said it sees an $800 million revenue opportunity should the company enter the hard seltzer category. "Recent commentary from MNST mgmt suggests they are seriously considering entering the category - and we think an announcement could come soon based on commentary from our beer distributor contacts," analyst Bonnie Herzog said. "KO's stake in MNST helps them diversify their own business - We also find it quite interesting that both KO and MNST have both discussed hard seltzers as a potential growth opportunity in recent weeks," she said. The firm kept its buy rating on the stock. Shares were up almost 6% this month. — Michael Bloom
Here are Thursday’s biggest analyst calls of the day: Micron, Walmart, Best Buy, Deere & more
- Oppenheimer upgraded Estee Lauder to outperform from perform.
- Citi raised its price target on FedEx to $235 from $170.
- Deutsche Bank downgrade Micron to hold from buy.
- JPMorgan reinstated Ceasars as overweight.
- JPMorgan downgraded Deere to underweight from neutral.
- Deutsche Bank downgraded BJ's to hold from buy.
- Goldman Sachs initiated Penn National Gaming as buy.
- Stephens raised its price target on Walmart to $160 from $140.
- Piper Sandler raised its price target on Best Buy to $127 from $112.
Pro subscribers read more here. — Michael Bloom
Nasdaq opens higher, S&P 500 lags under record levels
U.S. stocks opened mixed on Thursday with Big Tech ushering the Nasdaq Composite 0.15% higher but weakness in financials and other cyclical names leaving the S&P 500 and Dow Jones Industrial Average down 0.3% and 110 points, respectively.
Prior to the opening bell, U.S. equity futures pared losses after the Labor Department reported that the number of first-time applicants for jobless benefits fell below 1 million for the first time since mid-March. — Thomas Franck
U.S. weekly jobless claims below 1M for first time since March
In a sign that the labor market continues its recovery from Covid-19, first-time jobless claims fell below 1 million for the first time since March 21.
Total claims for the prior week came in at 963,000, well below the consensus estimates of 1.1 million, according to economists surveyed by Dow Jones.
Prior to Thursday's reading, jobless claims topped 1 million for the last 20 straight weeks as the U.S. went into lockdown in an effort to slow the spread of Covid-19.
The last time a reading was below 1 million was March 14, when claims came in at 282,000. Stock futures clawed back their earlier losses to trade higher after the data release. — Pippa Stevens, Jeff Cox
Tesla up in premarket trading, building on Wednesday's rally
Shares of Tesla gained more than 4% during premarket trading on Thursday, building on Wednesday's 13.12% gain. The surge in shares comes after the electric vehicle company announced a five-for-one stock split on Tuesday evening. Stock splits are purely cosmetic, meaning they do not change anything fundamental about the company. Tesla will begin trading on a split-adjusted basis on August 31. - Pippa Stevens
Peloton slips after Apple reportedly eyes fitness product
Peloton shares slid 4% in premarket trading on Thursday after Bloomberg News reported Apple is planning to launch a services bundle that includes virtual fitness classes in October. The bundle, with a working brand name "Apple One," will allow users to subscribe to its digital entertainment and productivity offerings at a monthly rate, Bloomberg News reported. — Yun Li
Goldman starts covering Penn National Gaming with a buy rating, sees 20% upside
Goldman Sachs initiated coverage of Penn National Gaming with a buy rating on Thursday, citing the casino stock's partnership with Barstool Sports as a major growth area. "PENN sits at the cross-section of a rapidly rebounding regional casino space and inﬂecting growth in sports betting," Goldman Sachs analyst Stephen Grambling told clients. Penn National owns a 36% stake in the Boston-based sports betting company founder by Dave Portnoy. "We believe Barstool Sports' embedded customer base and content creation engine will drive one of the lowest customer acquisition costs in the sports betting industry, allowing PENN to quickly take share within our proprietary iGaming and Sports Betting models." Goldman slapped a $60 per share price target on the stock, implying more than 20% upside over the next 12 months. Shares of Penn National popped nearly 5% in premarket trading. The call was also cheered by CNBC's Jim Cramer. — Maggie Fitzgerald
Cisco shares drop 7% on weak earnings guidance
Disappointing guidance on earnings pushed Cisco Systems shares down 7% in the premarket. The company expects earnings for the fiscal first quarter to range between 69 cents per share and 71 cents per share. That's below a Refinitiv median estimate of 76 cents per share. The weak forecast overshadowed stronger-than-expected results for the previous quarter. —Fred Imbert, Jordan Novet
Pompeo hints at U.S. action against more Chinese companies
Secretary of State Mike Pompeo hinted that President Donald Trump's executive orders on TikTok and WeChat could be used to target even more companies as tensions between China and the U.S. remain high. "When President Trump made his announcement about not only TikTok, but about WeChat – and if you read it, it's broader even still than that – is that we're going to make sure that American data not end up in the hands of an adversary like the Chinese Communist Party," Pompeo said in a speech in Prague, Czech Republic. Earlier this month, Trump signed executive orders banning U.S. transactions with WeChat and TikTok. The order is set to take effect next month. —Fred Imbert
Stock futures slip after S&P 500 falls short of record high
U.S. stock futures slipped on Thursday, a day after the S&P 500 fell short of its Feb. 19 all-time high. Dow Jones Industrial Average futures were down 25 points, or 0.1%. S&P 500 futures also dipped 0.1% while Nasdaq 100 futures were flat. The S&P 500 came into Thursday's session less than 0.5% shy of its all-time intraday high. On Wednesday, the index briefly traded above its closing record. Those gains Wednesday were driven by a rally in tech stocks. However, shares of Facebook, Amazon, Apple, Netflix, Alphabet and Microsoft were all muted Thursday morning. —Fred Imbert