S&P 500 closes lower for a third day as rising bond yields pressure stocks: Live updates

Stocks finished lower on Thursday.

The S&P 500 fell 0.25% to finish at 4,501.89, while the Dow Jones Industrial Average lost 66.63 points, or about 0.19% to end at 35,215.89. The Nasdaq Composite inched down 0.1% to 13,959.72.

— Samantha Subin

The Russell 2000 is outperforming the S&P 500 so far in the third quarter, but Certuity co-chief investment officer Dylan Kremer said Thursday that he is not confident the small cap stocks will be able to close the gap created by the first half rally.

"When you look under the hood, small caps have an attractive valuation, both on an absolute basis and relative to large cap. But the issue with small cap is a lot of the names are not profitable. So if we find ourselves coming into a challenging growth environment, small caps are going to struggle relative to large caps," Kremer said.

"We think it's still a bit too early to invest in small caps, just due to the uncertainty around growth, and we'd rather be late to the party there than early," he added.

— Jesse Pound

Natural Gas rose 3.2% Thursday, putting the commodity on pace for its first positive day in four days. Prices hit a high of 2.586, the highest level since Aug. 1, when natural gas traded as high as 2.675.

To be sure, Natural gas is still down more than 2.5% week to date, on track for its second straight week of losses and its fourth negative week out of five.

The First Trust Natural Gas ETF is up 2.7% on pace for the best day since July 18, when it gained 3.02%.

The ETF's leaders Thursday include Silverbow, Northern Oil & Gas, APA Corp., Antero and SM Energy, which are all up 5% or greater for the day.

— Hakyung Kim

Higher Treasury note yields resulting from large volumes of Treasury issuance and the Fitch downgrade of the U.S. credit rating Tuesday aren't enough to spark "a sustained drawdown" in stocks, Wolfe Research said early Thursday.

"[A] more definitive downside catalyst will be needed," Wolfe strategist Chris Senyek wrote, suggesting "potential near-term landmines include a major Tech bellwether disappointing, oil prices spiking upward, and/or Fed Chair Powell sounding much more hawkish than expected at Jackson Hole" during the Kansas City Fed confab later in August.

Looking farther out, Wolfe is still bearish, expecting "core inflation to be sticky, the Fed to hike further, and a recession to hit in the quarters ahead."

— Scott Schnipper, Michael Bloom

PayPal shares shed about 11% on Thursday even after reporting in-line quarterly results and guidance.

The moves came as the company reported a decline in active accounts, which fell to 431 million from 433 million in the first quarter.

Analysts also expressed concerns related to the company's take rate, or the money made per transaction, and margin issues. Margins came in weaker-than-expected for the period at 21.4% and showed a decline from the first quarter.

For the period, adjusted earnings came in at the expected $1.16 per share. Revenues came in at $7.3 billion versus the $7.27 billion expected by Wall Street.

— Samantha Subin

The internet phenomenon sending moviegoers to theaters in droves to catch "Barbie" and "Oppenheimer" could be behind the most recent rise in spending, Bank of America.

"'Barbenheimer' likely drove the continued surge in y/y entertainment spending growth," Bank of America's Shruti Mishra wrote Thursday.

The Wall Street firm reviewed credit and debit card data in the week ending July 29, and found total card spending rose 0.5% year-over-year. Consumer spending on airlines and transit increased. Meanwhile, spending on furniture and online electronics continued to weaken.

— Sarah Min

The utilities and real estate sectors are Thursday's biggest S&P 500 laggards.

The Utilities Select Sector SDPR Fund and the Real Estate Select Sector SPDR Fund declined 1.8% and 1.7%, respectively, as of midday Thursday.

FirstEnergy and Pinnacle West Capital saw the biggest declines within the utilities sector, with shares down by more than 3% Thursday.

— Hakyung Kim

The major averages are lower this week during what is a historically weak period for markets, according to the Stock Trader's Almanac.

The first nine trading days of August are usually lackluster periods for stocks, particularly as traders go away on vacation. Since 1987, August has been the worst month for the Dow and the second-worst month for the S&P 500, the almanac said.

On this day, Aug. 3, the S&P 500 has a 47.6% of rising, historically speaking. That's based on a probability calendar using data from January 2001 to December 2021.

— Sarah Min

Announced job cuts fell 42% in July from June, the first monthly decrease of the year, outplacement firm Challenger, Gray & Christmas reported Thursday.

Planned layoffs totaled 23,697 for the period, a level that also is 8% lower for the same month a year ago.

However, layoffs are still higher and hiring lower for the full year. Cuts are up 203% from the first seven months of 2022 while hiring is off 83%.

— Jeff Cox

Shares of Sunrun gained nearly 12% on Thursday.

Janney Analyst Thomas Meric upgraded the stock to buy from neutral in a Thursday note, and also raised his price target to $32. That suggests an upside potential of 79.4% from Wednesday's close.

"Positive to see RUN post an operationally solid quarter, beating customer additions expectations and reiterating its stance for continued margin expansion over the next few quarters," Meric wrote.

Sunrun posted second-quarter earnings that surpassed Wall Street's expectations, but fell short in its revenue guidance for the third quarter. The company's guidance had sent other solar stocks, like Enphase Energy and Plug Power, down during Wednesday's trading session. Enphase edged up down slightly and Plug Power gained 2.3% on Thursday.

Shares have lost 17% so far this year.

— Pia Singh

Check out some of the companies making headlines in midday trading.

Southwest Airlines — Shares slipped 2.5% after Jefferies downgraded the air carrier to underperform from hold. The firm cited difficulty competing against premium providers.

Etsy — Stock in the e-commerce company plummeted nearly 12% after reporting quarterly results. Etsy disappointed investors on Wednesday with lower forward guidance despite a second-quarter earnings beat.

Qualcomm — The chipmaker tumbled 9%. Qualcomm posted adjusted revenue of $8.44 billion, falling short of analysts' estimates for $8.5 billion, per Refinitiv. The company also gave soft guidance and noted weak smartphone chip sales.

Read the full list here.

— Brian Evans

Energy stocks gained on Thursday, boosting the S&P 500 sector 1.5% during midday trading,

The move in energy stocks came as oil prices rose on an extended output cut from Saudi Arabia. APA Corporation was the biggest gainer, up 6.4%.

Other significant winners included Williams, Devon Energy and Hess, last up 3% each. Diamondback Energy, Exxon Mobil and Halliburton added about 2%.

— Samantha Subin

Shares of Clorox surged nearly 10 during midday trading, continuing Wednesday's rally fueled by the company's earnings expectations.

The company reported adjusted earnings of $1.67 per share on $2.02 billion in revenue, while analysts polled by Refinitiv expected earnings of $1.18 per share and revenue of $1.88 billion.

Clorox's earnings showed a better-than-expected gross margin, showing strong consumer demand and consumers' ability to absorb the higher costs of household goods. 

— Pia Singh

There are the S&P 500 names falling to fresh lows Thursday, with several moving on the back of quarterly earnings reports.

Here are the names:

• Pfizer trading at lows not seen since Mar, 2021
• Extra Space Storage trading at lows not seen since Apr, 2021
• DXC Technology trading at lows not seen since Nov, 2020. DXC is also on pace for its worst day since Mar 16, 2020 when DXC lost -28.34%

Seven stocks in the broad market index hit new highs:

• Parker Hannifin trading at all-time high levels back to its IPO in 1964
• Packaging Corp. of America trading at levels not seen since June, 2022
• Cognizant Technologies trading at levels not seen since June, 2022
• Targa Resources trading at levels not seen since Aug, 2015
• Constellation Energy trading at all-time high levels back to its spin-off from Exelon in Jan, 2022
• Fair Isaac trading at all-time highs back to its IPO on the NYSE in July 1987
• McKesson trading all-time highs back through our history to 1983

— Hakyung Kim, Gina Francolla

Warner Bros. Discovery shares hovered near the flatline.

The media company reported second-quarter results that missed expectations on the top and bottom lines and a decline in subscribers from the previous period.

The company reported 95.8 million global direct-to-consumer streaming subscribers at the end of the quarter, below the 96.7 million subscribers analysts polled by StreetAccount expected. That also marked a nearly 2 million decline in subscribers from the end of the first quarter.

The company, which launched its combined Max streaming service during the period, posted a loss of 51 cents a share on revenues of $10.36 billion. That fell short of the 38-cent loss and $10.44 billion in revenues expected by analysts, per Refinitiv.

— Lillian Rizzo, Samantha Subin

The S&P 500 dropped more than 1% in Wednesday's session, its first slide of that size in more than two months. But that doesn't necessarily indicate more bad performance ahead, according to The Carson Group.

The broad index finished 1.4% lower. It last ended a session down more than 1% on May 23, when the index closed 1.1% below flat.

But investors shouldn't take that as a bad sign, as data analyzed by The Carson Group shows the S&P 500 has gained 14.8% on average when comparing the first drop of 1% or more in more than two months with the index's price one year later. The S&P 500 has been higher a year later all but one of the previous 27 times it has fallen at least 1% for the first time in more than two months.

To be sure, that doesn't mean it will necessarily be an easy ascent. The index was higher about two out of every three times when looking at one month after the drop. It was up less than four out of every five times at the six-month mark.

— Alex Harring

Expedia shares shed more than 15% after reporting mixed quarterly results.

Adjusted second-quarter earnings came in at $2.89, topping the $2.32 expected by analysts polled by Refinitiv. Revenues came in at $3.36 billion, falling short of the $3.37 billion expected.

Bookings also fell short of Wall Street's expectations. The metric came in at $27.32 billion, versus the $28.23 billion expected, according to FactSet estimates.

Other travel-related stocks lagged, with Airbnb and Booking Holdings each down more than 2%. TripAdvisor lost nearly 9% after reporting mixed earnings results.

— Samantha Subin

Investor Bill Ackman said he is betting against 30-year Treasurys as a hedge against the impact of long-term rates on stocks.

Ackman, the founder of Pershing Square Capital Management, said he is "short in size" on the 30-year Treasurys because it's also "a high probability standalone bet." He said he would be very surprised if we don't find ourselves in a world with persistent 3% inflation.

He added that he's implementing the short position through put options.

— Yun Li

The real estate sector fell 2% on Thursday and was on pace for its fifth negative day in six.

Host Hotels, Simon Property and Equinix all down almost 6% or more, and all reported after the bell Wednesday.

Week to date the sector is also down more than 3% and headed for its third straight weekly loss.

— Samantha Subin, Gina Francolla

The services sector in the U.S. expanded at a slower than expected pace in July, according to a report Thursday from the Institute for Supply Management.

The ISM Services PMI came in at a 52.7 reading, representing the percentage of companies reporting expansion for the month. That was slightly below the Dow Jones estimate for 53.3 and below June's 53.9.

Prices pointed higher for the month, with 56.8% of companies reporting increases. However, that was offset by a 2.4-point drop in employment, a 5.5-point decline in inventories and a 2.1-poiint decrease in business activity and production.

Separately, the Commerce Department reported that total orders from manufacturers increased 2.3% in June, slightly better than the 2.2% estimate.

—Jeff Cox

A July purchasing managers index reading came in slightly below economists' expectations.

The seasonally adjusted S&P Global U.S. Services PMI Business Activity Index came in at 52.3. That's a hair below the 52.4 reading forecasted by economists polled by Dow Jones.

This number is based off a survey of companies across economies around the world with the goal of capturing the health of the service sector.

"The service sector remains the main engine of growth in the [U.S.] economy, though there are signs of the motor spluttering amid rising headwinds," said Chris Williamson, chief business economist at S&P Global Market Intelligence.

— Alex Harring

The Cboe Volatility Index (VIX) rose to 17.42 on Thursday, its highest level since June 13 when it reached 17.59.

The so-called fear gauge was also on track for its fourth straight day of gains — a sign that traders may be more risk averse now than they were a few weeks back.

— Fred Imbert, Gina Francolla

Stocks opened lower on Thursday.

The Dow Jones Industrial Average lost 100 points, or about 0.3%, while the S&P 500 fell 0.5%. The Nasdaq Composite also dropped 0.5%.

— Samantha Subin

Qualcomm shed more than 9% after posting disappointing revenue for its third quarter and lighter-than-expected guidance for the current period.

Adjusted earnings for the recent quarter came in at $1.87 per share, ahead of the $1.81 expected by Wall Street analysts polled by Refinitiv. Revenue came in at $8.44 billion and short of the expected $8.5 billion.

Qualcomm said it anticipates earnings to range between $1.80 and $2 per share in its fourth quarter on $8.1 billion to $8.9 billion in sales. That's shy of expectations for $1.91 in earnings on revenues of $8.7 billion.

Qualcomm also said that handset chip sales declined 25% from a year ago. Meanwhile, Deutsche Bank downgraded the chipmaker to hold from a buy rating and cut its price target, citing smartphone market pressures.

— Samantha Subin, Kif Leswing

Productivity surged in the second quarter while the costs of labor were less than expected and jobless claims rose slightly, according to Labor Department reports Thursday.

Nonfarm productivity jumped 3.7% for the April-through-June period, as output rose 2.4% and hours worked fell 1.3%. Unit labor costs, a measure of hourly compensation against productivity, increased 1.6% as compensation costs increased 5.5% but were offset by the 3.7% rise in productivity.

Economists surveyed by Dow Jones had been looking for respective readings of 2.3% and 2.5%. Productivity had fallen 1.2% in the first quarter while unit labor costs rose 3.3%.

Elsewhere, weekly jobless claims totaled 227,000, up 6,000 from the week before but exactly in line with expectations.

— Jeff Cox

Check out the companies making headlines before the market open.

• Qualcomm — The chipmaker shed 9% after it posted $1.87 in adjusted earnings per share on $8.44 billion in revenue for the second quarter, while analysts polled by Refinitiv anticipated $1.81 and $8.5 billion, respectively. Qualcomm also gave soft guidance and noted weak smartphone chip sales. Deutsche Bank downgraded shares to hold from buy following the report.
• Moderna — Shares added 1% after the biotech company released its second-quarter results. Despite posting a quarterly loss and drop in revenue, Moderna raised its full-year outlook for its Covid vaccine, its only marketable product.
•  Albemarle —The energy stock added 5.4% following a mixed second-quarter report. Albemarle notably beat Wall Street expectations for earnings, reporting $7.33 per share excluding items against a consensus estimate of $4.44 compiled by Refinitiv. But revenue fell short at $2.37 billion on a $2.43 billion forecast. 

— Hakyung Kim

Warren Buffett shrugged off Fitch's U.S. downgrade, noting it doesn't change what Berkshire Hathaway is doing at the moment.

"Berkshire bought $10 billion in U.S. Treasurys last Monday. We bought $10 billion in Treasurys this Monday. And the only question for next Monday is whether we will buy $10 billion in 3-month or 6-month"  T-bills, Buffett told CNBC's Becky Quick.

— Fred Imbert

Moderna shares gained nearly 3% in the premarket after it upped full-year guidance for its Covid vaccine even amid a drop in sales.

The biotechnology company reported a low of $3.62 per share and revenues of $344 million.

Covid vaccine sales declined 94%, but Moderna said it anticipates between $6 billion and $8 billion in sales in 2023. That's up from a previous forecast of $5 billion. 

— Annika Kim Constantino, Samantha Subin

The Bank of England on Thursday lifted its main interest rate by 25 basis points to a 15-year high of 5.25%.

The move matches recent hikes by both the Federal Reserve and European Central Bank, and marks the 14th consecutive hike to tame inflation.

Six members of the monetary policy committee voted in favor of the hike, while two favored a 50 basis point increase.

The BOE acknowledged that current monetary policy is in restrictive territory but did not suggest an end to its tightening near term. It also indicated that it still sees upside risks to inflation.

— Elliot Smith, Samantha Subin

European markets opened lower as investors continue to assess earnings season and await the Bank of England's rate decision, expected midday Thursday.

The pan-European Stoxx 600 index was down 0.6% around market open, with most sectors trading in negative territory. Tech stocks led losses, with a 1.8% downturn, followed by financial services, which dropped 1.4%. Bank stocks bucked the trend and were up 0.1% in early trade.

— Hannah Ward-Glenton

China's service sector activity expanded at a stronger pace in July, according to the Caixin survey compiled by S&P Global.

The service sector purchasing managers index came in at 54.1, a slight increase from the 53.9 seen in June.

The survey report explained that the stronger growth was due to business activity across the sector rising solidly overall.

This was also supported by a "marked and accelerated" rise in overall new business, which encouraged firms to expand their payroll numbers for the sixth month in a row.

— Lim Hui Jie

Australia's trade surplus slipped to 11.3 billion Australian dollars ($7.4 billion) in June, down from AU$11.7 billion in May.

However, this was higher than the AU$11 billion forecasted by a Reuters poll.

Exports from the country fell 2% mainly due to a fall in other mineral fuels, which includes liquefied natural gas.

Meanwhile, imports fell 4% compared to May, driven by a fall in non-industrial transport equipment.

— Lim Hui Jie

Hong Kong's business activity fell into contraction territory for the first time in 2023, according to private surveys from S&P Global.

The purchasing managers index for July came in at 49.4, in contrast to the expansionary figure of 50.3 seen in June.

S&P Global said a renewed decline in overall new orders resulted in lower output in July. However, the report also pointed out the pace of business activity contraction was mild, "with new business from abroad and Mainland China remaining in growth."

— Lim Hui Jie

South Korean internet giant Kakao Corporation saw its profits tumble by 44% year on year in the second quarter to 56.3 billion South Korean won ($43.4 million).

The company explained that the fall in profits were from a high base due to a stock disposal gain seen in the same period last year.

On a quarter-on-quarter basis, net profit slid 12%. Still, revenue for the second quarter increased 12% year on year to 2.04 trillion won.

This is also the first quarter after Kakao subsidiary Kakao Entertainment acquired a 39.9% stake in K-pop agency SM Entertainment, ending a high profile takeover battle with entertainment rival Hybe, which manages supergroup BTS

— Lim Hui Jie

European markets are expected to open mixed Thursday, according to IG data. Britain's FTSE is anticipated to move 16.7 points higher to 7553.8, Germany's DAX 2.5 points higher to 16,007.2, and France's CAC up 2 points to 7305.5.

Italy's MIB is expected to fall 59.5 points to 29,043.

— Hannah Ward-Glenton

Through Monday's trading, at any rate, bullish "sentiment continues to show more optimism, with the reading now clearly in the initial caution zone," the weekly Investors Intelligence survey of financial newsletter editors and advisors said.

Bullish opinion grew to 57.1% of those polled, up from 55.6% a week ago and only a hair below the November 2021 peak of 57.2% that foreshadowed the January 2022 all-time high in stocks. "The bull count now exceeds the 55% initial caution level, which says to prepare a more defensive strategy," II warned.

Bearish opinion narrowed to 18.6% from 19.4% last week, while the "correction" camp, expecting a short-term pullback in prices, dropped to 24.3% from 25.0%.  

The so-called "bull-bear spread" widened again, to 38.5 points — the highest since the summer of 2021 —from 36.2 points the past two weeks, and above the recent top of 36.6 points dating from the end of June 2023. In mid-May, the spread was just 21 points, and a difference above 30 points "is the first sign of elevated risk" for contrarian advisors going against the crowd, II said.

– Scott Schnipper

Stock futures were little changed Wednesday night after a sell-off leading up to the closing bell during regular trading hours.

Futures tied to the S&P 500 were flat, while Nasdaq 100 futures fell 0.03%. Dow Jones Industrial Average futures added 24 points, or 0.04%.

— Brian Evans