Stocks fall Friday to notch weekly loss, S&P 500 snaps 4-week-long rally

CNBC in 5 minutes: All the buy, sell and hold stock calls from Friday
CNBC in 5 minutes: All the buy, sell and hold stock calls from Friday

Stocks tumbled on Friday as Wall Street's summer rally faltered and rate hike fears resurfaced, leading the major averages to end the week on a sour note.

The S&P 500 slid 1.29% to close at 4,228.48, while the Dow Jones Industrial Average tumbled 292.30 points, or 0.86%, to 33,706.74. The Nasdaq Composite dropped 2.01% to settle at 12,705.22.

For the week, the S&P edged 1.21% lower, while the Dow slipped 0.16%. The tech-heavy Nasdaq closed out the week down 2.62%.

Friday's halt in Wall Street's summer rally came as minutes from the Federal Reserve's July meeting and comments from St. Louis Federal Reserve President James Bullard indicated that the central bank would likely continue hiking rates in the near term, putting a damper on investors' hopes of a slowdown.

Despite the week's moves, many investors and traders are holding out hope for a bounce back.

"I wouldn't expect a complete reversal going back to the June lows or something like that, however, the choppiness we're seeing today and this week does reflect a lot of the bear case that's out there," said FBB Capital Partners' Mike Bailey. "I think seeing the market trade sideways or seeing a bit of a pause in that rally definitely makes sense based on some of the facts that we're seeing out there."

Meanwhile, Bed Bath & Beyond shares cratered more than 40% after Ryan Cohen dumped his entire stake in the retailer. The move seemed to dampen sentiment among meme stock traders who have bet big on the company in recent months.

In other news, about a $2 trillion notional value worth of options contracts expired on Friday. Options expirations can add volatility to markets as some holders may be forced to move into their positions.

Lea la cobertura del mercado de hoy en español aquí.

Disney's parks business should continue to outperform, Daiwa Capital Markets says

View of the Walt Disney statue in front of Cinderella Castle inside the Magic Kingdom Park at Walt Disney World Resort in Lake Buena Vista, Florida.
Getty Images

Expect continued strength from Disney's parks business going forward, Daiwa Capital Markets says.

Analyst Jonathan Kees said in a note to clients that he expects the segment's operating margins to boost the "company's as per capital spending increases, overseas parks reopen quickly, and international guest attendance grows."

Attendees have returned to Disney's parks in recent months, with the company saying in its recent quarterly earnings report that per capita spending at domestic parks rose 10% over the same quarter last year and rose above fiscal 2019 levels.

Kees believes that Disney's parks segment should continue to offset weaker areas like streaming. At the same time, the company's intellectual property and content rights give it an advantage over its peers.

— Samantha Subin

Stocks extend losses heading into final hour

Stocks widened their losses heading into the final hour of trading on Friday. The dow was last down 305 points, or 0.19%, while the S&P slid 1.33%. The Nasdaq cratered 2.7%.

Those moves put the Dow on pace for a 0.19% loss for the week and the S&P on track to tumble more than 1.2%. The Nasdaq is headed for a more than 2.6% loss.

— Samantha Subin

Occidental climbs after Berkshire Hathaway gets permission to buy more stock

Shares of Occidental Petroleum jumped more than 9% after Warren Buffett's Berkshire Hathaway received permission to buy to half of the oil company.

Berkshire has been consistently adding to its stake Occidental Petroleum in recent quarters. It already owns more than 20% of the company.

— Jesse Pound

Why Morgan Stanley's estimates don't account for Knicks, Rangers playoff runs

Morgan Stanley has little faith in playoff runs for the Knick and Rangers.

"Our F23E expectations conservatively assume no playoff run, for neither the Knicks or the Rangers," which are owned by MSG Sports, analyst Benjamin Swinburne said in a note to clients Friday, reiterating his equal weight rating and $200 price target on the stock.

To be sure, Swinburne expects MSG Sports to enter the 2023 fiscal year with a boost from strong consumer and corporate spending on sporting events.

"However, shares continue to trade at a deep discount to private market value (PMV) and lack a clear catalyst for re-rating," he wrote.

The note from the bank came on the heels of news that its sister-company MSG Entertainment is exploring a potential spinoff of its live entertainment business.

— Samantha Subin

Market volatility could pick up thanks to options expiration

There could be some big swings before the close Friday.

Options worth roughly $2 trillion in notional value are set to expire, meaning holders either have to roll into their positions or open up a new one. These events tend to bring about sharp market swings, especially heading into the close.

The majority of those options leaned on the calls side, meaning investors were betting on upside to the market, said Quincy Krosby of LPL Financial. "The issue is whether or not we will see perhaps a more bearish tilt going into this next month or is it going to remain filled with calls," she said.

The moves could offer further clues into where the market could be headed going forward, Krosby added.

— Samantha Subin

Dollar set for biggest weekly gain since April 2020

The dollar index surged again on Friday and was on pace to post its biggest weekly gain since April 2020.

Meanwhile, the euro was last down 0.54% to $1.0034 against the dollar, which put it back near parity with the greenback.

The dollar also hit its highest level since July 15, with the index last up nearly 2.4%.

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— Samantha Subin

June bottom should stick but market is overbought, Cresset Capital's Ablin says

Cresset Capital's Jack Ablin believes that the bottom created in June should hold even as market conditions remain overbought.

The rally staged in recent weeks should continue to trend higher in the foreseeable future, Ablin said, but the market also needs to "wring out" some of the speculative areas that have trended higher as of late.

"The smaller speculative growth, tech names, I think got ahead of themselves," Ablin said. "The Fed is still removing liquidity and speculation from the market and it just seems like an odd backdrop to be able to invest in speculative ideas right now."

— Samantha Subin

Tech shares slide, leading the Nasdaq lower

Tech stocks tumbled on Friday as investors shied away from growth stocks and the Nasdaq Composite was on track to end the week in negative territory.

Shares of technology giants Amazon and Alphabet slid more than 2%, with Meta Platforms and Netflix down more than 3% each. Apple and Microsoft also slipped about 1% each, while semiconductor stocks Nvidia and Advanced Micro Devices tumbled more than 4%.

The moves dragged down the S&P 500's information technology, consumer discretionary and communication services sectors by 2% each.

— Samantha Subin

The market's higher P/E may depend on Powell speech at Jackson Hole, Credit Suisse says

The stock market's 16% rally from the June lows has depended on investors' desire to pay more for future earnings as bond yields declined, Credit Suisse strategist Andrew Garthwaite said in a research bulletin from London Friday.

The forward price-to-earnings multiple had climbed to 18.3 times today from a low of 15.4 in June, he said. Meanwhile, earnings estimates have fallen since the end of June, by 1.5% for 2022 and 3.5% for 2023.

As a result, Fed Chairman Jay Powell's remarks next week at the annual central bank confab in Jackson Hole, Wyoming take on critical importance for the stock market's autumn performance.

Looking ahead, if Powell tries "to re-tighten financial conditions...or acknowledges the resilience of large chunks of the U.S. economy, the one driver of the rally we are witnessing – multiple expansion driven by lower yields – could prove precarious, as we move into a phase in which better news for the economy could be bad news for the market," Credit Suisse said.

— Scott Schnipper

Cruise lines are among the top losers in the S&P 500

Cruise operators' shares dipped in morning trading on Friday, dragging down the S&P 500. The broad market index is now on course to snap its four-week win streak.

Shares of Carnival, Norwegian Cruise Line Holdings and Royal Caribbean slid more than 5%.  

The decline in shares came days after Carnival announced increasing booking activity. Carnival said earlier this week that its booking activity for Monday, Aug. 15 was nearly twice the level of a comparable day in 2019. The company also loosened its Covid protocols on the heels of the Centers for Disease Control and Prevention relaxing its guidelines.

Airlines also suffered. American Airlines and Delta each fell more than 3%.

Darla Mercado

All the major averages on track for weekly losses

All the major averages are on pace to end the week lower. The Dow Industrial Average was last down 0.12% for the week, while the S&P 500 was 1% lower. The Nasdaq Composite has fallen 2.24% since the week began.

— Samantha Subin

U.S. Treasury yields climb higher as investors digest jobless claims data

U.S. Treasury yields climbed higher on Friday as investors digested the previous day's data release, which showed jobless claims edging lower, below expectations.

The yield on the benchmark 10-year Treasury note was up 9 basis points at 2.972% at 9:45 a.m. ET, while the yield on the 30-year Treasury bond traded up 7.5 basis points to 3.216%. Yields move inversely to prices, and a basis point is equal to 0.01%.

Markets and monetary policy officials are watching the job market closely, as rate increases aim to cool a labor market and 40-year high inflation. Jobless claims counted at 250,000 for the week ending Aug. 13, down 2,000 from the prior week.

The Fed is considering another large rate hike in September, St. Louis Fed President James Bullard said Thursday, adding that he can't say for sure that inflation has peaked.

Read the full bonds report here.

— Natasha Turak

Decliners handily outpacing advancers at NYSE

Market breadth was downbeat in early trading Friday, with 10 New York Stock Exchange-listed stocks declining for every advancer, FactSet data shows. Breadth wasn't much better at the Nasdaq exchange either, with six stocks declining for every advancer.

Fred Imbert

Stocks open lower Friday

Stocks fell on Friday, putting the S&P 500 on track to break its 4-week win streak. The S&P was last down 0.69%, while the Dow Industrial Average tumbled 158 points, or 0.47%. The Nasdaq Composite plunged 1.12%.

— Samantha Subin

Madison Square Garden Entertainment pops on potential spinoff news

Madison Square Garden Entertainment is looking into a potential spinoff of its live entertainment business, the company announced Thursday.

The move would create a separately traded company comprised of its live entertainment business. That includes New York City venue Madison Square Garden, along with MSG Networks and the Radio City Rockettes' "Christmas Spectacular" show.

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— Samantha Subin, Jack Stebbins

Bitcoin falls below $22,000 — a more than three-week low

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Bitcoin dropped below the $22,000 level, to its lowest level in more than three weeks, on the back of a broader crypto sell-off. 

The digital token fell below $21,500 at 2:30 a.m. ET, before recovering somewhat to under $22,000, according to CoinDesk data. It was last down 8.4% to $21,532.50 as of 8:47 a.m. ET.

Other cryptocurrencies also declined, including Binance Coin, Cardano and Solana. The reason for the drop was unclear.

Earlier this month, Bitcoin topped the $25,000 level for the first time since June.

— Sarah Min

Wayfair cuts 870 jobs, shares slump more than 7%

Wayfair shares tumbled more than 7% in the premarket after the company said it's cutting 870 jobs, or roughly 5% of its global workforce and about 10% of its corporate team.

The furniture retailer said it expects the cost of the cut to range between $30 million and $40 million. Wayfair expects those costs — which will mainly come from severance and benefits expenses — to hit in the third quarter.

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— Samantha Subin

General Motors reinstates quarterly dividend it suspended in April 2020

General Motors CEO Mary Barra announces a $7 billion investment, the largest in the company's history, in electric vehicle and battery production in Michigan on January 25, 2022 in Lansing, Michigan.
Bill Pugliano | Getty Images

General Motors is reinstating the quarterly cash dividend it cut during the early period of the Covid-19 pandemic, the automaker said Friday.

The first quarterly dividend is expected to be paid out to shareholders on Sept. 15. at a rate of 9 cents per share, down about 76% from the previous 38 cents issued in April 2020.

The car company also said it's upping its share repurchases to $5 billion of common stock.

Shares of General Motors rose about 2% in the premarket.

— Samantha Subin, Michael Wayland

Deere slip 4% on earnings miss, guidance cut

Front cameras on the Deer & Co. John Deere 8R fully autonomous tractor displayed ahead of the Consumer Electronics Show (CES) on January 4, 2022 in Las Vegas, Nevada.
Patrick T. Fallon | AFP | Getty Images

Deere shares slipped 4% in the premarket after the heavy equipment maker missed earnings estimates by 53 cents in the recent quarter as it faces higher costs and supply chain issues. The heavy equipment maker also cut its full-year guidance.

— Samantha Subin

Foot Locker pops 20%, retailer announces new CEO

Shares of Foot Locker jumped more than 20% in the premarket after topping earnings estimates in the recent quarter by 31 cents a share. At the same time, the company announced that former Ulta Beauty CEO Mary Dillon would step in as CEO beginning Sept. 1.

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— Samantha Subin

HP Inc. falls after Wells Fargo downgrade

Shares of HP Inc. fell more than 3% in the premarket after analysts at Wells Fargo downgraded the PC maker to underweight from equal weight.

"While we maintain a positive view on HP Inc.'s strong FCF and continued execution on driving toward a richer portfolio mix (commercial PCs, consumer premium / gaming, and peripherals), we see deteriorating PC fundamentals and macroeconomic sensitivity in HP's printer results," Wells Fargo analyst Aaron Rakers wrote in a note Friday.

CNBC Pro subscribers can read the full story here.

Fred Imbert, Michelle Fox

CNBC Pro: Investment pro says 'don't be a hero' in markets

Investment pro shares the tech stocks she's buying
Investment pro shares the tech stocks she's buying

Market veteran Nancy Tengler says talk of a new bull market is premature, as she names the "reliable" stocks she likes right now.

"I think this rally has been excellent," Tengler, who is CEO and chief investment officer of Laffer Tengler Investments, told CNBC "Squawk Box Asia" last week. "But I don't think we're off and running in a new bull market."

She named several tech stocks that she thinks are "more reliable growers" — companies with a proven track record of growing earnings and dividends.

Pro subscribers can read the story here.

— Zavier Ong

CNBC Pro: Veteran strategist David Roche shares his views on the market rally

David Roche says the market rally is mostly over
David Roche says the market rally is mostly over

U.S. markets have picked up from their mid-June lows in recent weeks, but strategist David Roche believes current support for the market is set to run out.

Speaking to CNBC earlier this week, Roche, head of research firm Independent Strategy, said he thought the rally was "probably 75% over now."

Pro subscribers can read more here.

— Jenni Reid

Bed Bath & Beyond plunges after Cohen dumps his stake

Shares of Bed Bath & Beyond are down more than 40% in extended trading after activist investor Ryan Cohen revealed that he had exited his position in the company.

Cohen had said in a filing earlier this week that his firm RC Ventures intended to sell all of its shares and call options of the struggling retail chain.

Bed Bath & Beyond had surged in recent weeks amid increased interest and trading activity from retail investors.

— Jesse Pound

Applied Materials, rise after earnings

Earnings season is winding down, but investors received two encouraging reports on Thursday evening.

Shares of Applied Materials rose about 2% in extended trading after the company beat estimates on the top and bottom lines for its fiscal third quarter. The semiconductor equipment company also gave upbeat guidance for its fourth quarter, with revenue and earnings projections coming in higher than expected.

Meanwhile, shares of bill payment software firm surged 19% after its own better-than-expected report. The company also said it plans to be profitable on an adjusted basis in the upcoming fiscal year.

— Jesse Pound

S&P 500, Dow hold slight gains for the week

With one day left in the trading week, here's where the major averages stand:

The Dow:

  • Up 0.71% for the week, on track for its fourth positive week in five
  • Down 7.99% from its record high

The S&P 500:

  • Up 0.08% for the week, on track for its fifth-straight winning week
  • Down 11.10% from its record higher

The Nasdaq Composite

  • Down 0.63% for the week, on pace to snap a four-week winning streak
  • Down 20.03% from its record high

—Jesse Pound, Christopher Hayes