Stocks close higher, Dow rallies 300 points as optimism over earnings outweighs higher rates: Live updates

The three major indexes finished Monday's session higher.

The Dow ended more than 300 points higher, up about 0.9%, The S&P 500 and Nasdaq Composite climbed 1.1% and 1.2%, respectively.

— Alex Harring

"We believe the impact of anti-obesity drugs (GLP-1) is being overplayed in the market ... but, truth be told, we don't know and they certainly aren't helping consumption, either," wrote Bank of America analyst George Staphos in a research note Monday where he identified his favorite picks.

Staphos expects demand for packaging to turn positive sometime between the fourth quarter of this year and the second quarter of 2024. That said, he anticipates weak growth will continue, which will hurt pricing power.

How do weight loss drugs factor into this? Fewer calories consumed — and presumably healthier food choices — equals less packaged food sold.

— Christina Cheddar-Berk

When discerning for a few variables, there's reason to believe this could be a good quarter for the market, according to Sam Stovall, chief investment strategist at CFRA Research.

Since World War II, the market has risen every fourth quarter of a pre-election year for a U.S. president during their first term in office, he said. And by Stovall's calculations, the market typically ends the quarter up around 6%.

— Alex Harring

The pain may not be over for solar stocks, according to BMO Capital Markets.

Analyst Ameet Thakkar downgraded Enphase Energy to market perform from outperform, saying in a note to clients Monday that residential solar demand in the U.S. is still struggling to rebound.

"Our latest update to our U.S. inverter demand assumptions implies only modest 2% y/y revenue growth, and we don't expect U.S. inverter demand to get back to 2022 levels until 2025-2026," the note said.

— Jesse Pound

Philadelphia Federal Reserve President Patrick Harker on Monday acknowledged that the central bank's interest rate hikes have been a significant factor in the home price surge.

In a speech to the Mortgage Bankers Association, Harker noted that he has received many comments about housing affordability., "And I am also fully aware of the way the actions we on the [Federal Open Market Committee] have taken over the past 18 months in our efforts to tame inflation and get it back down to our 2% annual target have, in their own way, contributed to the current mortgage climate," he said.

The central bank official repeated his belief that the Fed doesn't need to raise rates again this cycle while also affirming his commitment to fighting inflation.

The National Association of Realtors' housing affordability index, a new data point started in 2022, recently reached the lowest level in its short history. Harker said one refrain he has heard continuously is, "There are no first-time home buyers."

—Jeff Cox

Stocks were on pace for wins as investors entered the final hour of trading.

The Dow rose more than 300 points, or 1%, around 3 p.m. ET. The S&P 500 and Nasdaq Composite climbed 1.2% and 1.3%, respectively.

— Alex Harring

The SPDR S&P Retail ETF (XRT) rose more than 2.7% on Monday, putting it on pace for its best day since June when it rallied more than 3.1%.

Petco Health & Wellness and National Vision were the biggest gainers, last up 9.7% and 8.3%, respectively. Other notable winners included Kohl's, Burlington Stores and Gap, which added more than 5% each. Foot Locker, Etsy and American Eagle Outfitters rose more than 4%.

The move in retail names comes ahead of the release of September retail sales on Tuesday. Meanwhile, popular athleisure maker Lululemon Athletica is on deck to be added to the S&P 500 later in the week.

— Samantha Subin, Gina Francolla

Goldman Sachs thinks construction firm D.R. Horton can navigate higher mortgage rates with a focus on volume.

The firm upgraded the stock to buy on Monday while slightly lowering its target price.

"We look for D.R. Horton to leverage its operating acumen against this, driving upside to results," analyst Susan Maklari said. "More specifically, we highlight the focus on the entry level, while maintaining a steady starts pace, allowing for share gains."

CNBC Pro subscribers can read the full story here.

— Brian Evans

Shares of five pharmaceutical stocks in the S&P 500 hit lows not seen in at least a year on Monday.

Moderna lost more than 8% at its lowest level of the day, trading at a price not seen since November 2020. Similarly, Baxter retreated to its lowest level since August 2012, Illumina traded at lows not seen since December 2016 and Ball shed 2% to trade at lows not seen since December 2018. Kenvue also traded at its lowest level ever since its spinoff from Johnson & Johnson in May 2023.

Shares of healthcare firms like Pfizer have recently come under pressure as demand for Covid treatments and vaccines have waned.

— Lisa Kailai Han, Gina Francolla

All 11 sectors of the S&P 500 traded higher on Monday in a broad rally that helped push the index up more than 1%.

Consumer discretionary was the best performing sector with a gain of more than 1.5%. V.F. and Etsy led the sector higher, both rallying more than 4%. CarMax was the only stock in the sector on track for losses, shedding 0.1%.

Communication services and materials were the next best performers of the 11 sectors, with each adding around 1.4%.

Energy saw the most restricted gains, rising just 0.7%. While Valero and Devon each climbed more than 2%, EQT's 0.7% slip weighed on the sector.

— Alex Harring

Here are some of the name making midday moves:

• News Corp — Shares rose 3.6% in midday trading. Reuters and The Wall Street Journal reported over the weekend that activist shareholder Starboard Value has built a stake in News Corp.
• Pfizer — The stock added nearly 5% after being upgraded by Jeffries to buy from hold. The firm sees an attractive buying opportunity after Pfizer cut its full-year guidance last week on slumping vaccine sales.
• Alignment Healthcare — The health-care company popped 21% following an upgrade by Raymond James to strong buy from outperform. The firm cited Alignment's four-star Medicare rating, as well as its renewed focus on growth and its valuation.

To see more stocks moving in midday trading, read the full story here.

UBS chief investment officer Mark Haefele says the yield on the 10-year Treasury could pull back below 4% by the middle of next year, while the S&P 500 ticks up to 4,500.

"This is a great time for people to get their portfolios more in balance because we see positive returns across cash, bands and equities. When we look out towards the middle of next year, we can see the S&P 500 probably [at] about 4500 and we can see the 10-year at about 3.5%," Haefele told CNBC's "Squawk on the Street" on Monday. "If we have a hard landing...you can get lower than that."

Haefele added that so-called bond vigilantes aren't overly concerned with the prospect of a U.S. default, which underpins his thesis for a dip in the benchmark 10-year Treasury.

— Brian Evans

UnitedHealth is a "core" portfolio holding investors shouldn't overlook, UBS said.

The firm upgraded the healthcare stock to buy on Monday and said the company's recent earnings beat will drive its valuation higher.

"We believe that the strong Q3 release from UNH is a clearing event that should pave the way for improved valuation for the stock," analyst AJ Rice said.

CNBC Pro subscribers can read the full story here.

— Brian Evans

The Nasdaq Composite and concentrated Nasdaq-100 jumped more than 1% on Monday, boosted by shares of popular technology and software stocks.

Lululemon Athletica was the biggest winner in the 100-stock index, surging nearly 10% ahead of its addition to the S&P Dow Jones Indices later in the week. Atlassian shares gained nearly 6%, while Datadog, Fortinet and Ross Stores rose more than 3% each.

Semiconductor stocks Broadcom, Intel and On Semiconductor each added at least 2%, while Microsoft and Salesforce edged up 2% each. Technology behemoths Alphabet, Meta Platforms, Netflix and Amazon rose more than 1% each.

— Samantha Subin

A group of stocks rising more than 2% helped the Dow in Monday's session.

Nike, Travelers, Intel and Salesforce all added more than 2%. The blue-chip average gained about 1.1%, or nearly 400 points, as a whole.

Of the 30 stocks in the index, just three traded down in the session. Walgreens slipped about 1%, while JPMorgan and Apple each shed about 0.2%.

— Alex Harring

The direct market impacts stemming from geopolitical conflicts are typically short-lived, according to Principal Asset Management chief global strategist Seema Shah. However, she believes that the impacts on the macroeconomy can linger.

"The key macro concerns from the developments in Israel lie with the threat of upward pressure on oil prices, and how its corresponding effect on core inflation could potentially prompt central bank action. ... The indirect impacts via inflation and economic growth can be more persistent," Shah said.

The strategist believes the critical macro concerns lies with the oil market. While brent crude prices have not risen as much as had been expected initially following the outbreak of the attack, an escalation in tensions would likely put further upward pressure.

"Higher oil prices can work their way into core inflation and inflation expectations if sustained," said Shah. "Safe haven flows have contributed to a sharp fall in bond yields this week. Yet, if oil prices rise further and price pressures do re-emerge, expectations of additional monetary action from policymakers could threaten a renewed bond rout."

— Hakyung Kim

Carl Icahn placed a big bet against struggling American malls in late 2019, but the trade, which involved credit-default swaps, hasn't worked in his favor. In fact, the Wall Street Journal reported that Icahn's positions took a $742 million paper loss in 2022.

"In many instances, it's just a rigged market for billions and billions of dollars," Icahn said in an interview with the Journal. Derivatives trades can be extremely risky where small differences in asset prices can translate into sizable wins or losses.

— Yun Li

Morgan Stanley thinks cybersecurity stock Varonis Systems is a little known beneficiary of generative artificial intelligence.

The firm upgraded Varonis stock to overweight on Monday. Shares climbed more than 5% in morning trading.

"With the stock trading at a discount to Security peers and precedent M&A, we view VRNS as one of the best risk-rewards in our software coverage universe," analyst Hamza Fodderwala said.

CNBC Pro subscribers can read the full story here.

— Brian Evans

The three major indexes opened Monday's session higher.

The Dow rose more than 200 points, or 0.7%, shortly after 9:30 a.m. ET. The S&P 500 added 0.5% while the Nasdaq Composite climbed 0.3%.

— Alex Harring

Jefferies is remaining bullish on Pfizer stock over the long-term despite the company trimming its full-year guidance last week.

The firm upgraded the pharmaceutical stock to buy in a Monday note.

"In our view, PFE has one of the most intriguing catalyst paths over the next yr in large cap pharma and trades ~15% below where it traded at the start of the COVID pandemic," analyst Akash Tewari said.

CNBC Pro subscribers can read the full story here.

— Brian Evans

These are some of the stocks making the biggest moves before the bell:

• Pfizer, Moderna, BioNTech — Shares of Pfizer dropped 1.3% after the company slashed its full-year revenue guidance by $9 billion, noting waning demand for its Covid treatment and vaccine. Following the guidance cut, Jefferies upgraded Pfizer on Monday, citing an attractive buying opportunity. Vaccine markers Moderna and BioNTech also dropped premarket, losing 4.1% and 5%, respectively. Novavax shed 2.4%.
• Colgate-Palmolive — The consumer products stock gained more than 1% in premarket trading after Stifel upgraded Colgate-Palmolive to buy from hold. The investment firm pointed to strength in pet food line Hill's and toothpaste as reasons to be optimistic about the stock.
• Lululemon — Shares jumped more than 5% Monday premarket. The athleisure company will be added to the S&P 500 on Wednesday, according to S&P Dow Jones Indices. Lululemon will replace Activision Blizzard following the completion of its takeover by Microsoft.

For the full list, read here.

— Pia Singh

Penny stock Rite Aid slid more than 16% with trading halted before the bell after the drug store chain filed for bankruptcy.

The company filed for Chapter 11 bankruptcy protection in New Jersey and appointed Jeffrey Stein as its new CEO. Lenders have agreed to give $3.45 billion in new funding.

The stock has dropped more than 80% in 2023, pulling its share price below the $1 mark after ending 2022 at $3.34. Rite Aid has struggled with cooling sales and litigation related to the opioid epidemic.

— Alex Harring

The three major indexes diverged last week amid volatile trading.

The broad S&P 500 advanced 0.5% over the course of the week, marking its second winning week in a row. Meanwhile, the blue-chip Dow gained 0.8% on the week.

But the Nasdaq Composite lagged, with the technology-heavy composite shedding about 0.2% in the week.

— Alex Harring

RBC raised its full-year 2023 and 2024 S&P 500 earnings per share outlook following a solid start to the third-quarter season.

"There are three key things to know about our revised EPS forecasts," said Lori Calvasina, head of U.S. rates strategy at RBC. "First, our 2024 forecast assumes a significant moderation in inflation, easing of interest rate pressures in the back half of the year, and sluggish GDP and industrial production forecasts. ... Second, our 2024 EPS forecast assumes less robust revenue growth than the bottom-up consensus, and assumes a less rosy view of where margins are headed."

"Third ... our new EPS forecasts imply that the S&P 500 could surpass 4,700 by year-end 2023 and 5,300 by year-end 2024," Calvasina said.

— Fred Imbert, Michael Bloom

European markets started the new trading week on a positive note, despite continuing turmoil in the Middle East.

The pan-European Stoxx 600 index was up 0.3% as the session opened, with most sectors in positive territory. Mining sources led the pack, up 1.3%, while utilities bucked the trend to drop 0.1%.

— Hannah Ward-Glenton

Logistics firm J&T Express is eyeing a $500 million listing in Hong Kong in what would be the city's second largest listing of 2023.

The company will issue 326.5 million shares priced at 12 Hong Kong dollars ($1.53) each, according to the company's prospectus. At listing, J&T will have a market capitalization of $13.5 billion.

Back in February, Reuters reported that the company had earlier aimed to raise at least $1 billion via a Hong Kong IPO in the second half of 2023.

The company has revealed that it has nine cornerstone investors, including Chinese tech giant Tencent and Singapore state-owned investment firm Temasek. The cornerstone investors will commit $199.5 million, or about 39.9% of the IPO.

— Lim Hui Jie

China has left its key short-term and medium-term lending rates unchanged, with the 7-day reverse repurchase rate standing at 1.8% and the one-year medium term lending facility rate at 2.5%.

The People's Bank of China has also injected 106 billion yuan ($14.77 billion) of 7-day reverse repos at the same rate of 1.8%.

Following the move, the onshore yuan weakened marginally to trade at 7.3093 against the greenback, while the offshore yuan also weakened to 7.3121.

— Lim Hui Jie

The New Zealand dollar strengthened on Monday after conservative former businessman Christopher Luxon was elected as the country's new prime minister.

The kiwi dollar rose 0.49% at $0.5913 in Asia trading. The center-right National Party led by Luxon will form a new government with its preferred coalition party ACT.

Investors will also await New Zealand inflation figures due on Tuesday for more clues on whether another hike in interest rates is on the cards. Consumer prices are expected to rise 2.0% in the third quarter, up from 1.1% in the prior quarter.

— Shreyashi Sanyal

With October halfway through, here's where all the major averages stand:

Dow Jones Industrial Average:

• Rose 0.8% last week
• Up 0.5% month to date
• Up 1.6% this year

S&P 500:

• Lost 0.5% last week
• Up 0.9% in October
• Up 12.7% for the year

Nasdaq Composite:

• Slipped 0.18% for the week
• Up 1.4% this month
• Up 28.1% in 2023

— Samantha Subin

Stock futures opened slightly higher on Sunday evening as Wall Street readied for a busy week of earnings.

Futures tied to the Dow Jones Industrial Average added 0.07%, while S&P 500 futures and Nasdaq-100 futures gained 0.09% each.

— Samantha Subin