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Dow closes 300 points higher, extends rally to second day ahead of Powell's Jackson Hole speech

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

The Dow Jones Industrial Average jumped Thursday, extending a two-day rally ahead of Federal Reserve Chair Jerome Powell's Jackson Hole speech.

The Dow spiked 322.55 points, or 0.98%, to 33,291.78, with gains accelerating in the final hour of trading. The S&P 500 jumped 1.41% to 4,199.12, and the Nasdaq Composite advanced 1.67% to 12,639.27.

Still, the major averages are on pace for a losing week. The Dow is down 1.23% through Thursday, the S&P 500 is 0.69% lower, and the Nasdaq Composite is down 0.52%.

Materials, communication services and information technology outperformed in the S&P 500. Consumer staples and utilities underperformed the broader market index.

Snowflake jumped 23.1% after posting a beat on revenue. Shares of Peloton dropped 18.3% after the equipment maker reported an earnings miss.

Traders will be listening for more information out of the Jackson Hole economic symposium, with Fed Chair Jerome Powell scheduled to speak Friday. Investors are looking for clues on whether policymakers will cut rates when the current hiking cycle is over.

"The market is trying to decide if we are mid cycle or late cycle and sending a couple different signals," said Liz Young, head of investment strategy at SoFi. "We're waiting to get news of what happens tomorrow in Jerome Powell's speech and kind of stuck without a whole ton of direction."

Jobless claims drifted lower in the week ending Aug. 20, according to the Labor Department. A revision for second-quarter gross domestic product showed a smaller decline compared to an earlier reading.

Investors are also waiting for the report of personal consumption expenditures on Friday. The PCE is one of the Fed's favorite inflation measures and could influence its actions going forward.

Lea la cobertura del mercado de hoy en español aquí.

Fed will need to take rates higher for longer, Pimco portfolio manager says

Pimco portfolio manager and market strategist Tony Crescenzi said Thursday that the Federal Reserve needs to remain aggressive on rate hikes even if inflation starts to decrease.

The Fed has raised its benchmark interest rate to 2.5%, but that is still below the annual rate of inflation. Crescenzi said that relationship would need to flip, creating a positive real interest rate, to make sure inflation expectations are held down.

"One quarter won't do it. It will take several quarters or more," Crescenzi said on "Closing Bell."

— Jesse Pound

Tighter money means lower P/E multiples for stocks, Wolfe's Senyek says

It's a straightforward idea.

Tighter money translates into lower forward price-to-earnings multiples paid for stocks, and the typical lag is about six months after liquidity starts drying up, according to a note Thursday by Wolfe Research's chief investment strategist Chris Senyek.

The Federal Reserve is expected to raise interest rates "at least another" 1.25 to 1.50 percentage points over the course of this current tightening cycle, "at a minimum," Senyek wrote. What's more, the monthly Quantitative Tightening policy will start running off $95 billion each month from the Fed's balance sheet, starting in September.

The result? "We expect the on-going liquidity withdrawal to place additional downward pressure on stock multiples," the note said.

-- Scott Schnipper

Fed's James Bullard says what's more important is moving in the right direction on inflation

St. Louis Fed's Bullard: Front loading shows you're serious about fighting inflation
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St. Louis Fed's Bullard: Front loading shows you're serious about fighting inflation

St. Louis Fed President James Bullard said what's more important is moving in the right direction on 2% inflation.

"I mean with an eight handle on CPI, I think we'd be happy now to get going in the right direction. There will be a debate at some point about how long do you want to linger above 2%, and what do you have to do to get it down and actually hit the target. And I think that's important debate, but that's out there in the future," he told CNBC's Steve Liesman at Jackson Hole, Wyoming.

"[Right now], it's getting and moving in the right direction. Let's get it toward 2%," he said.

Bullard said that Wall Street should hold a baseline expectation that inflation could be "higher for longer," a risk the Fed official said is "underpriced in markets today."

— Sarah Min

Santoli's market notes

Here are some of today's market notes from CNBC's Michael Santoli:

  • The tape continues to act as if there's no dangerous gulf between the market's current view of the Federal Reserve's likely policy path and central bank officials' own messaging as the Jackson Hole conclave gets underway.
  • The equity market has made some peace for the moment with 2-year Treasury yields back near 3.4%, the 10-year above 3.05%, the U.S. Dollar Index just under two-decade highs and crude back in the mid-$90s. It helps that all of them have eased back from once-threatening levels this morning.
  • S&P 500 has bobbed back up to that 20-day average and near the 4,170 area of the early-June highs which bulls were hoping would support things until Monday's drop. No serious damage was done in this multi-day pullback following a 19% low-to-high ramp (using intraday prices).

CNBC Pro subscribers can read the full story here.

Morgan Stanley's top picks for the next year

Morgan Stanley this week released its annual Vintage Values list, its favorites to buy and hold for the next 12 months.

This year the list has mostly large-cap names and is oriented towards growth. Top picks include Amazon, Ferrari and more.

Read the story - and learn more about the top picks - on CNBC PRO.

—Carmen Reinicke

CNBC Pro: These undervalued midcap stocks could have strong earnings growth ahead

As investors continue to ride out market volatility, some participants are increasingly turning to a growth at a reasonable price strategy — GARP — which offers investors the best of value and growth investing styles.

CNBC Pro screened for mid-cap stocks that meet the GARP criteria, and found some interesting names that made the cut.

Read the full CNBC Pro story here.

— Sarah Min

Travel stocks rise

Travel stocks rose on Thursday, with shares of cruise companies Royal Caribbean, Carnival and Norwegian Cruise Line jumping more than 4% each. Airline stocks United, Delta and American gained 1.7%, 1.4% and 2.7%, respectively.

Casino stocks Wynn Resorts and Las Vegas Sands rose more than 2%, while hotel giants Hilton and Marriott added 1% each.

— Samantha Subin

Three stocks making the biggest moves midday

Salesforce signage outside office building in New York.
Scott Mlyn | CNBC

Here are three stocks making headlines in midday trading:

Snowflake – Shares surged 20% after the cloud data platform provider surpassed revenue expectations in its most recent quarter. Snowflake said product revenue grew 83% year over year.

Salesforce — The stock fell about 5.6% after Salesforce issued disappointing guidance for fiscal 2023. Still, the software company beat earnings and revenue expectations, and approved a $10 billion stock buyback program, a first for the company.

Dollar Tree — Shares plunged 10% after the discount retailer cut its full-year forecast. Dollar Tree reported an earnings beat and a revenue miss.

Check out more midday movers here.

— Michelle Fox, Sarah Min

Dollar Tree struggles, Dollar General bet on food pays off

All dollar stores are not created equal. Look at what's happening between Dollar General and Dollar Tree if you want proof.

Both dollar stores beat earnings forecasts, but what's important lies within the retailers' outlooks.

Dollar General raised its same-store sales guidance for the fiscal year and it's now above Wall Street's expectations. Meanwhile, Dollar Tree gave fiscal third-quarter revenue forecast that was a bit below consensus and issued an earnings estimate that was way below Street expectations.

Dollar General said it's seeing plenty of customers visiting its stores to buy food and groceries.

CNBC Pro subscribers can read the full story here.

—Robert Hum

It doesn't matter what the Fed will say if inflation is entrenched, Aureus' Karen Firestone says

It doesn't matter what the Federal Reserve says out of its Jackson Hole symposium if Wall Street gets the sense that inflation isn't coming down, according to Aureus Asset Management's Karen Firestone.

"If we get a real sense that inflation is entrenched, and we're at 9% inflation or something like that, no one is happy about that," Firestone said Thursday on CNBC's "Halftime Report." "It doesn't matter what [the Fed will] say — 50, 75, 100 — that level of inflation is not good for stocks, particularly growth stocks."

The investor is hoping for more inflation data will show the central bank's action are having an impact on rising prices.

"We need some evidence. Otherwise, we're gonna have inflation that's too high for too long and that is not good for the stock market," Firestone said.

— Sarah Min

Post-SPAC names enjoy run-up over the last 30 days, but are slumping year to date

SPACs have enjoyed a bounce over the last 30 days, but they are still far in the hole for 2022.

CNBC's Post SPAC Index, made up of SPACs that have successfully merged and debuted on the public markets, is up 10.6% over the period between July 26 and Aug. 25. In that period, it beat the S&P 500, which is up 5.36%.

Sharp jumps in a handful of names have helped lift the index. Getty Images, for instance, is up over 217% in the last 30 days, while EV battery maker Enovix has added more than 136%.

Nevertheless, SPACs as a whole have suffered in 2022, as investors have shied away from speculative companies with little earnings. The CNBC Post SPAC index is off nearly 46% for the year, compared to the S&P 500's roughly 12.6% decline.

SPACs, or special purpose acquisition companies, raise funding through an initial public offering and then use the proceeds to buy a private company and have it debut within two years.

SPAC liquidations have picked up as companies approach the two-year mark and  have struggled to bring companies to market in these less than favorable conditions: Fifteen SPACs have liquidated year to date – five of which happened in August. Meanwhile, there was one liquidation in 2021 and two in 2020, according to SPACResearch. 

-Darla Mercado, Gina Francolla

Snowflake surges 20% on revenue beat

Snowflake's stock jumped more than 20% after topping revenue estimates in the recent quarter. The cloud data platform provider posted revenues of $497 million, beating Refinitiv estimates of $467 million.

Snowflake said product revenue grew 83% year over year and noted it expects that segment to bring in between $500 and $505 million in the third quarter. For the full year, the company expects product revenue of $1.91 billion to $1.92 billion.

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— Samantha Subin, Ashley Capoot

S&P 500 opens higher

The S&P 500 opened higher Thursday. Dow Jones Industrial Average fell 68 points, or 0.21%, shortly after the bell. S&P 500 and Nasdaq Composite climbed 0.25% and 0.54%, respectively.

— Sarah Min

Jobless claims fall

Initial filings for unemployment benefits fell last week, the Labor Department said Thursday.

Jobless claims came in 243,000 for the week ended Aug. 20, down 2,000 from the prior week. It was also lower than consensus estimates of 255,000, according to StreetAccount.

— Sarah Min

Revisions show a smaller GDP decline in the second quarter

The first revision for second-quarter GDP painted a slightly less dour picture for the U.S. economy.

The Bureau of Economic Analysis said on Thursday that GDP contracted by 0.6% in the second quarter. The advance estimate released last month showed a decline of 0.9%.

There was a negative revision elsewhere in the report. The price index for gross domestic purchases grew 8.4% during the quarter. The previous estimate showed a rise of 8.2%.

Despite the high inflation and the negative GDP growth, real gross domestic income rose by 1.4% in the second quarter.

—Jesse Pound

Consumer confidence recovers somewhat, but recession concerns remain, Bank of America says

Consumer confidence has eased somewhat from their lows earlier this year, but recession concerns remain, according to Bank of America.

The BofA US Consumer Confidence Indicator reached a three-month high of 31% as of August 21, following a period of lower gas prices and better-than-expected economic data, according to a Thursday note.

Still, the firm said a majority of respondents, 66%, expect higher inflation over the next year, with 38% of those respondents anticipating a recession.

Respondents in higher income brackets earning more than $50,000 a year said they were mainly concerned about savings and investments in a downturn.

Meanwhile, those with lower incomes said they were more concerned with job security than their higher-income counterparts, though savings were still their main concern, the report said.

— Sarah Min

Fed's George says demand is 'cooling'

Kansas City Fed President Esther George told CNBC's Steve Liesman that "demand is cooling" in the U.S. economy but that what she is hearing from business leaders is not yet consistent with recession.

George also said that inflation remains "broad based" and wants to see at least three "consistent months" of improving inflation data.

George declined to say whether see was leaning toward a half-point or three-quarter-point hike at next week's Fed meeting. She did say that unemployment may have to rise for the Fed to bring down inflation.

—Jesse Pound

Peloton shares plunge after earnings miss

Shares of Peloton tumbled more than 15% in Thursday premarket trading after the equipment maker reported a big loss. The results marks six straight quarters of reported losses from the company as it tries to execute a turnaround plan.

The stock surged more than 20% the prior day following news of its partnership with Amazon.

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— Sarah Min, Lauren Thomas

Autodesk surges after earnings beat

Autodesk shares popped more than 9% after the software company posted quarterly earnings and revenue that beat analyst expectations.

The company earned $1.65 per share on revenue of $1.24 billion. Analysts polled by Refinitiv expected a profit of $1.57 per share on revenue of $1.23 billion. Autodesk's operating margin also came in slightly above expectations.

—Fred Imbert

Figs jumps after Ron Baron reveals new buying

Billionaire investor Ron Baron revealed on "Squawk Box" that he has been buying shares of medical apparel company Figs in recent months.

Baron called the company the "lululemon of healthcare," referring to one of the fastest growing apparel stocks of the past decade.

Shares of Figs spiked in premarket trading after Baron made his appearance. Shares were up more than 13% after being little changed before Baron spoke.

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— Jesse Pound

Nvidia falls after weak earnings report

Shares of chipmaker Nvidia fell 4% in the premarket after the company posted quarterly results that missed analyst expectations.

Nvidia earned 51cents per share on revenue of $6.7 billion. Analysts expected the company to report a profit of $1.26 per share on revenue of $8.10 billion, according to Refinitiv.

"Macroeconomic headwinds across the world drove a sudden slowdown in consumer demand" for the company's gaming products, Nvidia CFO Colette Kress said on a call with analysts.

—Fred Imbert, Jordan Novet

European markets climb ahead of Jackson Hole

European markets advanced on Thursday as global investors await the start of the Federal Reserve's Jackson Hole economic symposium.

The pan-European Stoxx 600 index gained 0.7% in early trade, with basic resources adding 1.2% to lead gains as all sectors and major bourses entered positive territory.

The German economy grew unexpectedly in the second quarter, new figures confirmed on Thursday, despite fears of stagnation amid soaring inflation and threats to energy supply following Russia's invasion of Ukraine.

- Elliot Smith

CNBC Pro: Why Goldman Sachs thinks this FAANG stock is a sell

FAANG stocks delivered a mixed bag of second-quarter earnings, but Goldman Sachs is keeping its buy calls for nearly the entire grouping.

Just one stock is a sell, according to the bank.

Pro subscribers can read the story here.

— Zavier Ong

CNBC Pro: Morgan Stanley, UBS prefer these ‘cheap’ stocks, even in a recession

The risk of recession is growing, according to Canaccord Genuity's analysts led by Tony Dwyer.

"Our indicators suggest a recession is increasingly likely as we move into next year, especially if the Fed continues to raise rates," according to an Aug. 22 research note.

But according to Morgan Stanley and UBS, some stocks still look cheap — even with the risk of a slowdown priced in. Here are some of the stocks they prefer.

Pro subscribers can read the story here.

— Zavier Ong

Tesla stock set to split

Tesla's 3-for-1 stock split is set to take place Wednesday after the market close, meaning that shareholders will get two new shares for each they currently hold when trading begins Thursday.

Shares of the automaker gained 0.22% Wednesday. The latest stock split was approved during the company's annual meeting on Aug. 4.

Splitting a stock doesn't change anything fundamental about a company, but can make it more affordable for some retail investors to buy.

—Carmen Reinicke

Snowflake jumps, Salesforce falls

Quarterly earnings released after the bell Wednesday sent shares of some companies flying.

Snowflake surged more than 18% after beating Wall Street estimates. Salesforce, on the other hand, reported solid quarterly results but gave a gave weaker than expected third quarter and full-year guidance on earnings and revenue, sending its stock down nearly 7%.

—Carmen Reinicke

Stock futures open flat

U.S. stock futures opened flat on Wednesday after all three major averages gained in the regular trading session.

Dow Jones Industrial Average futures rose by 8 points, or 0.02%. S&P 500 and Nasdaq 100 futures climbed 0.14% and 0.13%, respectively.

—Carmen Reinicke