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Stocks close lower, major averages on pace for weekly declines as recession fears mount

Pro Picks: Watch all of Thursday's big stock calls on CNBC
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Pro Picks: Watch all of Thursday's big stock calls on CNBC

Stocks on Thursday posted their third straight daily decline, as mounting fears that the Federal Reserve's aggressive rate hikes will push the economy into a recession dented risk appetite for investors.

The S&P 500 slid 0.8% to 3,757.99, while the Nasdaq Composite shed 1.4% to 11,066.81. The Dow Jones Industrial Average closed 107.10 points lower, or 0.3%, at 30,076.68.

Thursday's session left the major averages on pace to close the week with losses. The Dow is down about 2.42% week to date, while the S&P and Nasdaq have tumbled 3% and 3.3%, respectively. The S&P and Dow closed Thursday 2.5% and 0.5% off their recent lows.

Bond yields surged again on Thursday, with the yields on the 10-year and 2-year Treasury notes notching fresh multiyear highs, hitting their highest levels since February 2011 and October 2007, respectively.

Thursday's moves came after the Fed on Wednesday maintained its aggressive stance, enacting another 75 basis point hike and predicting bringing short-term rates as high as 4.4% by the end of 2022. Other central banks worldwide followed the Fed's lead, implementing their own sizeable hikes overnight despite potential repercussions for the economy.

Growth-oriented tech stocks and semiconductors took a leg lower on Thursday amid fears of slowing economic growth. Industrials and consumer discretionary were the worst-performing S&P 500 sectors, losing about 1.7% and 2.2%, respectively, because of their reliance on the economy.

"The Fed's paved the way for much of the world to continue with aggressive rate hikes, and that's going to lead to a global recession, and how severe it is will be determined on how long it takes inflation to come down," said Ed Moya, a senior market analyst at Oanda.

Defensive stocks outperformed with drugmakers and consumer staples in the green on Thursday. Eli Lilly shares gained 4.9% after UBS upgraded the stock and said it could be developing the biggest drug ever.

Consumer discretionary is Thursday's worst-performing S&P 500 sector

Consumer discretionary was the worst-performing sector in the S&P 500 on Thursday, falling nearly 2.2% as concerns of slowing economic growth mounted on Wall Street.

Caesars Entertainment slumped 9.4% and was the worst-performing stock in the sector. Travel names including Expedia Group and MGM Resorts shed 7.1% and 6.6%, respectively, while Wynn Resorts and Marriott International dropped more than 5% each.

Airline stocks also took a hit, with shares of United, American Airlines and Delta down roughly 4% each.

— Samantha Subin

Consumer discretionary is Thursday's worst-performing S&P 500 sector

Consumer discretionary was the worst-performing sector in the S&P 500 on Thursday, falling nearly 2.2% as concerns of slowing economic growth mounted on Wall Street.

Caesars Entertainment slumped 9.4% and was the worst-performing stock in the sector. Travel names including Expedia Group and MGM Resorts shed 7.1% and 6.6%, respectively, while Wynn Resorts and Marriott International dropped more than 5% each.

Airline stocks also took a hit, with shares of United, American Airlines and Delta down roughly 4% each.

— Samantha Subin

Where the major averages stand

All the major averages are on track to finish the week with losses, with the Dow Jones Industrial Average down 2.42% and the S&P 500 and Nasdaq Composite down 2.98% and 3.33%, respectievely.

At the conclusion of Thursday session the S&P and Dow sit about 2.5% and 0.5% off their recent lows, respectively. The Nasdaq is roughly 4% above its recent bottom.

All the major averages are also headed for weekly losses, led to the downside by consumer discretionary and financials, which are down at least 4% this week. Utilities and energy are the only positive sectors since the beginning of the year.

— Samantha Subin

Natural gas tumbled Thursday to lowest since July, wheat reached highest since July

October natural gas contracts closed 8.9% lower Thursday at $7.089, the lowest since July 15. Natgas is now on pace for a fifth weekly decline for the first time since January 2019.

Despite rising Thursday, West Texas Intermediate crude oil is still on pace to register a fourth straight weekly decline for the first time since early December 2021.

Among agricultural commodities, December wheat hit $9.225 a bushel, the highest since July 11, and is on pace for its fourth weekly gain in five weeks.

— Scott Schnipper, Gina Francolla

Stocks close lower, major averages on track for weekly losses

All the major averages finished Thursday's post-Fed trading session lower, with all the major averages on track to finish the week with losses.

The S&P 500 dropped 0.84% to 3,757.99, while the Nasdaq Composite tumbled 1.37% to 11,066.81. The Dow Jones Industrial Average closed 107.10 points lower, or 0.35%, at 30,076.68.

— Samantha Subin

Cano Health shares surge more than 40% amid reported buyout talks

Shares of Cano Health surged more than 40% in late afternoon trading following a Wall Street Journal report that Humana and other potential buyers are in talks to buy the primary-care provider.

The report, which cited sources familiar with the discussions, indicated that a deal could be reached in the weeks ahead.

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— Samantha Subin

FedEx announces cost cuts, hike prices

Shares of FedEx rose 2.8% in afternoon trading, erasing earlier losses after the company announced its fiscal first-quarter results and detailed cost-cutting initiatives. The company, which had warned investors to expect a weak quarter earlier this month, said it planned to cut expenses by more than $2 billion during the current fiscal year.

FedEx also said it would repurchase $1.5 billion of its stock during the fiscal year and raise prices for customers on Jan. 2, 2023.

— Jesse Pound

S&P 500 is in a 'bottoming process,' Stifel's Bannister says

Stifel's Barry Bannister believes that current market conditions signal that the S&P 500 is in a "bottoming process."

"It is only if the Fed becomes incrementally more hawkish Nov/Dec-2022 that we see 10Y TIPS yield rising further, thus we believe the P/E is bottoming," Bannister said in a note to clients, adding that he expects yields to pull back and the S&P 500 to hit 4,400 by the fourth quarter of 2022 or the first quarter of 2023.

On the recession front, Stifel isn't projecting one until the beginning of the third quarter of next year, noting that employment has yet to weaken as it typically does for a downturn.

Bannister also expects more information on the war in Ukraine, inflation and a myriad of other issues come November, which should provide further clarity for markets.

— Samantha Subin

Shares of Caesars down 10%

Growing fears of a recession are hitting travel stocks hard, and that has led to a rough stretch for Caesars Entertainment.

The casino stock dropped 10% on Thursday, bringing its losses since Monday's close to nearly 20%.

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Other gaming stocks haven't performed much better. Wynn, MGM and Penn National are among the names with outsized losses this week.

— Jesse Pound

Drugmakers headline midday movers

Pharmaceutical stocks were some top performers in early afternoon trading on Thursday.

Novavax — Shares of the drug maker tumbled 13.9% after JPMorgan downgraded Novavax to under