Morning Brief

What to watch today: Stocks set to rise as October and Q4 begins

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BY THE NUMBERS

Wall Street on Thursday is set to start the new month and fourth quarter with gains on rising hopes for further coronavirus aid. The Dow Jones Industrial Average, S&P 500 and Nasdaq logged strong advances Wednesday, their fourth positive sessions in the past five. (CNBC)

Volatile September likely to be followed by rocky October for market (CNBC)

While all three benchmarks fell in September, breaking five-month winning streaks, they all saw robust third-quarter increases. As of Wednesday's close, the Nasdaq was up nearly 24.5% in 2020. The S&P 500 was up 4% for the year, while the Dow was still down almost 2.7%. (CNBC)

The Labor Department on Thursday reported a fewer-than-expected 837,000 new filings for unemployment benefits for the week ending Sept. 26. Initial jobless claims have been holding at these historically high levels for months, though they're just a fraction of the over 6 million filed at their coronavirus peak in the spring. (CNBC)

Market sentiment on Wednesday was helped by the ADP's September data showing better-than-expected job growth at U.S. companies ahead of the government's September employment report Friday. (CNBC)

Shares of Bed Bath & Beyond, down 13% year to date as of Wednesday's close, were soaring 16% in the premarket after the retailer reported its first quarterly same-store sales increase in nearly four years. Online sales rose more than 80% in its fiscal second quarter as shoppers stocked up on disposable face masks, college dorm decor and patio furniture. (CNBC)

Shares of PepsiCo, just above the flat line for the year, were 1% higher in Thursday's premarket after the drink and snack giant reported better-than-expected adjusted earnings of $1.66 per share in its fiscal third quarter. Revenue rose more than 5% to $18.09 billion, also exceeding estimates. (CNBC)

Pivotal Research raised its price target for Amazon (AMZN) to $4,500 per share, the highest on Wall Street, from $3,925 a share, calling Amazon the best mega-cap stock on a multi-year basis. That new price target represents a nearly 43% from where the stock closed Wednesday.

IN THE NEWS TODAY

President Donald Trump, just after the midnight deadline, signed a temporary spending bill to keep the government running into December. While funding did briefly lapse, the Office of Management and Budget never ordered agencies to cease operations. (CNBC)

House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin pledged to continue discussions on a possible new relief package for coronavirus after failing to come to an agreement Wednesday. House Democrats initially aimed to pass their roughly $2.2 trillion rescue legislation Wednesday night but called off the vote until at least Thursday to allow more time for bipartisan talks. (CNBC)

However, with previous federal airline aid now expired, American and United plan to furlough a combined 32,000 workers starting Thursday. Both airlines said they would reverse course if lawmakers and the Trump administration reach a deal for a new relief package that includes more airline payroll support. (CNBC)

The CDC has extended its ban on passenger cruising from U.S. ports through Oct. 31 after the White House reportedly overruled calls for a longer suspension. The agency originally issued a no-sail order for cruise ships in U.S. waters on March 14 after hundreds of coronavirus infections and several Covid-19 deaths were reported onboard ships with outbreaks across the world. (CNBC)

Moderna doesn't expect to apply for an emergency use authorization with the FDA for its potential Covid-19 vaccine until after the Nov. 3 election, CEO Stephane Bancel told the Financial Times. Several companies are in late-stage vaccine trials. Trump has said it's possible that one of them might be ready as early as this month.

There are signs that Europe's second wave might have peaked in U.K. and elsewhere (CNBC)
Coronavirus vaccine trial participants report day-long exhaustion, fever and headaches (CNBC)

Democratic presidential nominee Joe Biden won Tuesday night's chaotic debate, according a national CNBC/Change Research snap poll. Fifty-three percent of likely voters gave Biden the victory compared with 29% for Trump, with the rest undecided. When asked, "Did the debate change your vote," only 2% of the respondents said yes. Ninety-eight percent said no.

Facebook (FB) announced that it will not allow any ads on its service that seek to delegitimize the outcome of an election, including the election. The policy will prohibit ads that call specific methods of voting, such as voting by mail, as being inherently fraudulent or corrupt. (CNBC)

Facebook to ban any ads supporting QAnon and militarized social movements (CNBC)

Alphabet's (GOOGL) Google said it will pay publishers around $1 billion for news over the next three years. The pledge was announced by Google Chief Executive Sundar Pichai in a blog post on Thursday. News publishers have been calling on Google to pay them for their content for almost a decade but the search giant has refused up until now. (CNBC)

* Microsoft says ‘configuration update’ caused global Outlook outage (CNBC)

Jim Farley, new CEO of Ford (F), is restructuring business operations. As part of the shake-up, Ford also announced several executive changes, including the departure of CFO Tim Stone, an ex-Amazon executive who joined in April 2019. Stone will be succeeded by John Lawler, who most recently served as CEO of Ford Autonomous Vehicles. (CNBC)

STOCKS TO WATCH

Mountain Crest Acquisition (MCAC), a special purpose acquisition company, is taking Playboy Enterprises public through a reverse merger. Upon completion of the deal, the company will take on the Playboy name and change its ticker to PLBY. The company best known for its flagship magazine was taken private in 2011.

Food producer Conagra (CAG) reported quarterly profit of 70 cents per share, 13 cents a share above estimates. Revenue was also above expectations, boosted by a 15% increase in organic net sales. Separately, Conagra increased its quarterly dividend to 27.5 cents per share from the prior 21 cents a share.

Starbucks (SBUX) raised its quarterly dividend to 45 cents per share from 41 cents a share.

Goldman Sachs (GS) is moving forward with a "modest number of layoffs," after suspending job cuts earlier this year in light of the pandemic. Bloomberg reports that the bank's job cuts will total about 400, or about 1% of its workforce.

Marathon Petroleum (MPC) is cutting 12% of its workforce or 2,050 jobs, amid weak energy prices, flagging demand and a global supply glut. It will take a $175 million charge as part of the restructuring.

Allstate (ALL) is cutting about 3,800 jobs, or nearly 8% of the insurance company's workforce, as part of a restructuring effort. It will incur a $290 million charge related to the cutbacks.

Tesla (TSLA) cut the starting price of its China-made Model 3 by about 8%, with the standard Model 3 to include a cheaper battery than the one currently used.

Medtronic (MDT) is the target of a Justice Department probe, according to The Wall Street Journal. The medical device maker is reportedly being investigated for allegedly limiting competition in ventilator manufacturing. Medtronic told the Journal the company is fully cooperating with DOJ's review.

The Food and Drug Administration is widening its investigation of the illness of a patient in AstraZeneca's (AZN )study involving its Covid-19 vaccine candidate, according to sources who spoke to Reuters. The drugmaker's late-stage trial has been on hold since Sept. 6, after a participant became ill with a rare spinal inflammatory disorder.

HP Inc. (HPQ), the computer and printer, maker will pay $6 million to resolve a Securities and Exchange Commission complaint over its sales practices and how they were used to meet sales and profit targets. HP did not admit or deny guilt in agreeing to the settlement, and the practices in question were changed back in 2016.

NextEra Energy (NEE) CEO James Robo told an investment conference that the utility would not be embarking on any hostile takeover deals. His comment came a day after reports that NextEra had approached rival utility Duke Energy (DUK) about a takeover before being rebuffed, although Robo declined any specific comment on that report.

WATERCOOLER

Jimmy Carter turns 96 today, the latest milestone for the longest-lived of the 45 men to hold the highest American office. The Democratic former president planned to celebrate at his Georgia home, with his wife of 74 years, Rosalynn Carter, according to the Carter Center in Atlanta. (AP)