S&P 500 and Nasdaq close lower to begin March as the 10-year Treasury yield touches 4%: Live updates

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

The S&P 500 fell Wednesday, the first day of March, as traders struggled to recover their footing following a losing month and bond yields continued their climb.

The broad market index fell 0.47% to 3,951.39, while the tech-heavy Nasdaq Composite lost 0.66% to close at 11,379.48. The blue-chip Dow Jones Industrial Average ended the day just above the flatline at 32,661.84, a gain of 5.14 points.

The moves came as bond yields extended their February gains, with the benchmark 10-year yield briefly topping 4% for the first time since November. The 1-year Treasury yield rose above 5%.

Minneapolis Federal Reserve President Neel Kashkari said Wednesday that he's "open to the possibility" of a larger interest rate increase at this month's policy meeting, "whether it's 25 or 50 basis points," but hasn't made up his mind yet.

"We are currently in the chop period between central banks winding down interest rate increase cycles and seeing what impact those increases will have on the real economy," said William Northey, senior investment director at U.S. Bank Wealth Management. "Performance for the first two months of the year was primarily influenced by marginal changes in expectations for the appropriate path of monetary policy in 2023."

"We anticipate a better environment for bonds but expect ongoing, two-sided volatility for global equities and U.S. equities as market gauges consumer health and corporate activity," he added.

Stock market sentiment initially got a boost after the release of much stronger-than-expected data out of China. The country's National Bureau of Statistics said its official manufacturing PMI rose to 52.6 in February — a high not seen since April 2012.

The moves come after Wall Street closed out a losing February for stocks on Tuesday. February's slide dragged the Dow into negative territory for the year, while the other two indexes are still holding onto their gains.

Lea la cobertura del mercado de hoy en español aquí.

Goldman Sachs shares dip again after investor conference as analysts weigh in

Goldman Sachs shares fell for a second day after CEO David Solomon outlined his rebooted plan to improve returns at the investment bank.

Shares of the New York-based company dipped 0.8% Wednesday, adding to Tuesday's 3.8% decline.

Analysts weighed in with mixed reviews of Solomon's effort. Wells Fargo's Mike Mayo said in a research note that while he had confidence in Goldman hitting its returns target, he wasn't sure when that would happen.

"The issue is lack of time frame, and especially ongoing uncertainty with the resolution of underperforming consumer/platform solutions," Mayo wrote. "To us, this contributes to the stock price decline today."

The consumer operations Goldman still has, which may or may not be sold, "remains an albatross and the stock lacks short-term catalysts," he added. Still, Mayo rates Goldman "overweight."

Goldman's valuation "offers an opportunity to add exposure to a best-in-class capital markets and asset management franchise with ongoing self-help" from buybacks and expense cutting, wrote Bank of America's Ebrahim H. Poonawala, who reiterated his "buy" rating on the company.

Morgan Stanley's Betsy Graseck said the event was "in line" with her expectations, but wasn't convinced the bank will achieve their targets.

"Looking forward over the next three years, we model GS delivering ROE above 2022's 10% level but below their 14-16% target as market activity normalizes," Graseck wrote.

—Hugh Son

S&P 500 and Nasdaq close lower, Dow ends the day flat

The S&P 500 and Nasdaq Composite closed lower on Wednesday.

The broad market index fell 0.47% to 3,951.39, while the tech-heavy Nasdaq Composite lost 0.66% to close at 11,379.48. The blue chip Dow Jones Industrial Average ended the day just above the flatline at 32,662.56, 5.86 points higher.

— Tanaya Macheel

Redburn upgrades Spotify, says streaming platform could beat gross margin consensus estimates

Redburn is increasingly optimistic about how Spotify shares will perform going forward.

Analyst Agnieszka Pustula upgraded the stock to buy from neutral, citing the likelihood of gross margins beating consensus expectations. Pustula price target of $140 implies the stock could rally 20.4% from where it closed Tuesday.

"It does not take a lot of optimism to see Spotify's gross margin beating consensus expectations," Pustula said in a Wednesday note to clients.

Pustula also said the company could raise prices, which would help its revenue growth. Meanwhile, Pustula praised the music streaming platform for its "resilient" subscriber growth.

— Alex Harring

Bill Nygren remains confident in Capital One despite recession fears

Oakmark Funds' manager Bill Nygren is confident in Capital One even as prospects of further interest rate hikes from the Federal Reserve are rattling investors.

"For people that are pulling out their recession playbook based on the last two recessions, there's a lot of concern about what will happen to charge offs in Capital One, but we take great confidence in how strong the market is for unskilled labor right now," Nygren said on CNBC's "Squawk on the Street."

"People pay their credit card bills and their auto bills as long as they've got jobs," he continued. "So we think that investors might be overestimating the weakness that you could see in not only Capital One, but the rest of the financial sector, if we do go through a moderate recession."

Nygren said that he believes higher interest rates will have more of an impact on the housing sector, rather than credit card payments.

"I think that's probably more of a risk for the housing sector where you're looking at very long term interest rates," said Nygren.

"For a credit card loan, change in in near-term rates just doesn't change the payment all that much."

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