Dow closes 250 points lower as 10-year Treasury yield nears 5%: Live updates

Stocks ended Thursday's session down.

The Dow finished 0.8% lower. The S&P 500 shed 0.9%, while the Nasdaq Composite slid 1%.

With just Friday's session left in the trading week, the three major indexes are all on pace for losses. The Dow is slated to end the week 0.8% down, while the S&P 500 and Nasdaq are poised for losses of 1.2% and 1.7%, respectively.

— Alex Harring

Income from dividend paying stocks can give investors some comfort, but investors should be discerning – especially as interest rates remain high, says Charlie Gaffney, managing director at Morgan Stanley Investment Management.

Corners of the market that may be offering attractive yields, including utilities and real estate investment trusts, are cheap right now. The utilities sector is down more than 16% year to date, while the real estate sector is off 11%.

But some of these names can be subject to the ill effects of higher rates.

"With the way rates have moved in this cycle, from ultra-low to a very fast-paced Fed that has now led to the 10-year Treasury yield getting close to the 5% level, there are some dislocations that investors have to be aware of," said Gaffney, who is also portfolio manager of the Eaton Vance Dividend Builder Fund (EIUTX).

That means companies that are highly leveraged and that became accustomed to a low cost of capital and low cost of debt financing might feel some pressure as rates remain high.

"The rate of change in interest rates has created a little bit more risk to highly levered names, and as a result you have to be more selective," Gaffney said.

— Darla Mercado

Bank of America downgraded shares of Peloton Interactive to underperform from a neutral rating, citing declining engagement and subscriber growth concerns.

"In our view, shares do not reflect risk to revenue from increased churn due to declining platform engagement and subscriber base that is increasingly at risk as COVID cohorts reach the average subscriber lifetime," wrote analyst Chris Nagle in a Thursday note to clients.

"We believe a lower multiple is warranted given lower estimates, growing risk from subscriber churn and less confidence in Peloton achieving breakeven EBITDA through at least 2024," Nagle added.

— Samantha Subin

The rapid rise in interest during this Federal Reserve hiking cycle spurred BlackRock's retirement investment team to add more tools to the popular target date retirement funds, Nick Nefouse, the firm's global head of retirement solutions, said Thursday.

"What we did about a year ago is we broke apart the fixed income in the portfolio. We used to just invest in the aggregate bond index, and we've now broken that up into multiple underlying index building blocks," Nefouse said.

The current list of fixed income funds used in the target date strategies — which includes funds focused on corporate bonds, Treasurys and mortgage backed securities — allows the managers to be more precise in managing a volatile yield curve, Nefouse said.

"What you're seeing this year is hopefully we are nearing a top of interest rates, and now we have more diversification within our fixed income because we've gone from primary building block in the AGG, plus TIPS, to now we have six building blocks," Nefouse said.

That expanded tool box is reflected in BlackRock's new suite of target date ETFs, which are aimed at investors who do not have a employee-sponsored retirement count or have maxed out those contributions. The 10-fund group officially launched on Thursday.

— Jesse Pound

The market seems to be stuck between a rock and a hard place with no obvious way out, according to Jenny Harrington, CEO of Gilman Hill Asset Management. That's why the neutral sentiment in Fed Chair Jerome Powell's speech earlier today makes sense to her.

"Look, dovish is no good because what is dovish mean? Dovish means that we have a weaker economy and that's going to be harder for earnings to grow off of. Hawkish is no good because that means higher rates for longer, which caps valuations," she said on CNBC's "Halftime Report" this afternoon.

What this means to Harrington is that markets are "pretty stuck for right now."

"We really need something to evolve, where we can see earnings start to grow significantly or valuation starts to expand significantly," she added. "The only thing that's going to get us there is the passage of time, and it's going to be a long time to get there."

— Lisa Kailai Han

Netflix is at an attractive entry point, according to Katie Stockton, founder of Fairlead Strategies.

"I'm a buyer of Netflix," Stockton told CNBC's "Power Lunch" on Thursday. The technical analyst said the rise above the 50-day moving average in Netflix after its latest quarterly results suggests the streaming stock is now in an uptrend.

"We have these oversold uptrends which I find pretty compelling, both on the daily and also the weekly charts of Netflix," Stockton said. "So within the context of the long term uptrend, I think we probably have an intermediate term entry here."

The next resistance level for Netflix is roughly $440 per share, she said. The stock was last trading around $402 per share.

— Sarah Min

GLP-1 medications like Ozempic have been a gamechanger in obesity treatment. But they also are leaving a mark on how investors value stocks. Morgan Stanley said there's been a $340 billion uplift in market value for GLP-1 makers like Novo Nordisk and Eli Lilly. On the other side, stocks that are perceived to be "disrupted" have lost some $258 billion in market value, the firm said.

It's an eye-popping stat, especially when one considers that the U.S. drug market has an annual value of $430 billion, according to Morgan Stanley.

In the research note, equity strategist Edward Stanley said consumer interest in the medications has weakened somewhat based on web search stats and social media hashtags. At the same time, there has been a spike in company mentions of the trend on corporate conference calls.

"This disconnect between 'main street' vs 'Wall Street' excitement is typical of short-term hype cycle tops," Stanley wrote.

-Christina Cheddar Berk

Wall Street analysts weren't too optimistic heading into Tesla's third-quarter earnings — and the company's downbeat results is keeping them on the sidelines. 

The electric vehicle maker missed on both earnings and revenue for the first time since the second quarter of 2019. CEO Elon Musk tempered investors' expectations for the soon-to-be launched Cybertruck, emphasizing that it likely will not create significant positive cash flow for at least 12 months after production starts. The company also emphasized high interest rates are pressuring affordability. 

Numerous analysts covering Tesla had already forecast margin pressures due to lagging sales and just reiterated their ratings on the company's shares following Wednesday's release. However, several firms further reduced their price targets. Many had already lowered their price targets ahead of the earnings announcement. 

Shares declined 9% in Thursday's session.

More about the price target cuts can be found here.

— Hakyung Kim

The three major indexes were on track for losses as the final hour of a topsy-turvy session kicked off.

The Dow was down more than 200 points, or 0.6%, shortly after 3 p.m. ET. The S&P 500 and Nasdaq traded down 0.8% and 0.9%, respectively.

Communication services was the only sector of the 11 in the S&P 500 on pace to end the session up. The sector rose about 0.4%, helped by rallies of 16% and 7.5% in Netflix and AT&T, respectively, on the back of their earnings reports.

— Alex Harring

Pharmaceutical stocks such as Pfizer and Moderna were among the 26 S&P 500 names hitting fresh lows on Thursday. Shares of Illumina also traded at lows not seen since December 2016.

Elsewhere, United Airlines hit lows last seen in October 2022, while Southwest Airlines was trading at lows not seen since May 2020.

Here are some of the other names hitting fresh lows:

• General Motors trading at lows not seen since October 2020
• Genuine Parts trading at lows not seen since July 2020
• Rollins trading at lows not seen since June 2022
• Johnson Controls trading at lows not seen since October 2022
• Corning trading at lows not seen since July 2020
• Albermarle trading at lows not seen since July 2022

— Sarah Min, Gina Francolla

Tesla CEO Elon Musk said on an earnings call Wednesday evening that higher interest rates and the potential for an economic slowdown can hurt car sales for Tesla and other automakers.

"I just can't emphasize this enough that for the vast majority of people buying a car is about the monthly payment. And as interest rates rise, the proportion of that monthly payment that is interest increases naturally. So, if interest rates remain high or if they go even higher, it's that much harder for people to buy the car. They simply cannot afford it," Musk said.

Economic uncertainty, and global events like wars, can also weigh on consumer confidence, Musk said.

"I'm not saying things will be bad. I'm just saying they might be. I think Tesla is an incredibly capable ship, but we need to make sure like if the macroeconomic conditions are stormy, even the best ship is still going to have tough times," Musk said.

Shares of Tesla were down nearly 9% in midday trading.

— Jesse Pound

Investors have taken rallying gold prices as a signal that markets are risk averse in a period of rising bond yields and the escalation of the Israel-Hamas conflict. Spot gold was last trading around $1,957.39 per ounce, up roughly 8% from its October lows around $1,819.

However, Fairlead Strategies' Katie Stockton expects that gold is "short-term overstretched" and could pull back next week. She expects the recent move higher is a bounce from its previous lows.

"Gold have really shot up this week," Stockton said. "Everyone's been very quick to say that it's because there's risk off now in the market, but I would disagree with that."

"We have to contextualize it with what happened before this relief rally in gold, right, which was a really sharp downdraft. So, gold is basically right back to where it was in sort of mid to late September," she added. "So we've seen a round trip in the price of gold."

— Sarah Min

Netflix's better-than-expected quarterly earnings has analysts cheering the company's new subscriber growth initiatives, keeping them optimistic on the stock's growth potential. 

The streaming giant topped earnings estimates and matched revenue forecasts during the third-quarter. Password-sharing crackdown efforts and its new ad-supported tier supported the subscriber boost.

"They crushed it. The management deserves an Emmy for managing investor expectations, but the results probably surprised them as well. … In short, it was a good quarter," Bernstein analyst Laurent Yoon said in a note.

More on Wall Street's reactions to Netflix's earnings can be found here.

— Hakyung Kim

The three major indexes traded higher on Thursday afternoon as Federal Reserve Chair Jerome Powell's commentary concluded.

The S&P 500 and Nasdaq Composite were both up around 0.2%. The Dow traded about 100 higher, or 0.3%.

Stocks had gyrated as investors analyzed his remarks.

— Alex Harring

These are some of the stocks making the biggest midday moves:

• Union Pacific — Shares of the freight operator added 2.6% after the company reported earnings per share of $2.51 per share while analysts polled by LSEG forecast $2.44. The company's third-quarter revenue of $5.94 billion missed analyst estimates of $5.99 billion, however.
• Las Vegas Sands – The casino operator rose 3.8% after topping revenue estimates for the third quarter and pointing to a recovery in Macao and Singapore. Las Vegas Sands posted revenues of $2.8 billion, exceeding the $2.73 billion expected by analysts polled by LSEG.
• American Airlines — Shares advanced 2% midday even after the air carrier posted weaker-than-expected earnings and revenue for the third quarter. However, better-than-expected operating income and margins helped lift the stock as well as revenue growth in its Atlantic and Pacific regions.

Read the full story here.

— Brian Evans

Stocks took a leg down after Federal Reserve Chair Jerome Powell said economic policy has not yet seen too much tightening.

The Dow and S&P 500 were both down about 0.3% shortly before 12:45 p.m. ET. The Nasdaq Composite slid 0.4%.

— Alex Harring

Investors parsed Federal Reserve Chair Jerome Powell's remarks on the economy. Climate protestors disrupted the start of his speech.

All three of the major indexes were up around 0.3% shortly after 12:15 p.m.

— Alex Harring

Stocks were largely unmoved in the minutes leading up to Federal Reserve Chair Jerome Powell's remarks, slated to start around noon ET.

The Dow and S&P 500 each added around 0.1% shortly before 11:50 a.m. ET, while the Nasdaq Composite traded 0.2% higher. Stocks have gyrated over the course of the morning, with all three of the major indexes trading both above and below their flatlines.

— Alex Harring

The Nasdaq Composite and Nasdaq-100 pared losses in the session due to advances from popular technology stocks and chipmakers.

Netflix was the biggest winner in the Nasdaq-100, surging more than 15% on strong quarterly results and subscriber growth numbers.

Amazon added nearly 3%, while recently battered chipmakers Advanced Micro Devices, ASML Holding and Nvidia rose 2.4%, 2.2% and 1.6%, respectively. Other notable gainers included Atlassian, Qualcomm and Adobe.

Tesla was the worst performer in the concentrated index, slumping 9% on disappointing earnings and cautious guidance. Lam Research dropped nearly 6% on light guidance. Other major laggards included Lucid Group, Enphase Energy and Applied Materials, last down about 4% each.

— Samantha Subin

Analysts covering the packaging industry have been adjusting their models for expected lower food consumption, and news hasn't been good. Graphic Packaging shares hit a 52-week low after a double downgrade by Wells Fargo analyst Gabe Hajde on Thursday.

"At the core of GLP-1 treatment for obesity care, patients will ultimately consume roughly one-third less of normal caloric intake, amplifying already lower packaged food demand. Given a middle-of-the-store focus and sustained CPG [consumer packaged goods] efforts to raise price, we believe GPK's portfolio is more at risk in terms of volume headwinds and assign an UW rating," Hajde wrote, in research note.

Hajde expects that the drugs, which include Ozempic and Wegovy, could become a "structural headwind" to the industry and lower food and beverage packaging demand by as much as 0.5% annually.

—Christina Cheddar Berk

The iShares Core U.S. Aggregate Bond ETF (AGG), which tracks the U.S. investment-grade bond market, fell slightly Thursday to 91.88, reaching the lowest level since October 2008. Bond prices move inversely with bond yields.

The Vanguard Total Bond ETF (BND), which mirrors the performance of the Bloomberg U.S. Aggregate Float Adjusted Index, also hit the lowest level since October 2008.

— Yun Li

First Solar's recent pullback has created an attractive entry point, according to JPMorgan. 

Analyst Mark Strouse upgraded shares to overweight from neutral in a Thursday note.

"We believe the recent pullback tilts risk-reward favorably for a company that has the best visibility into medium-term growth prospects owing to a backlog that stretches into later this decade," said Strouse. 

Shares added nearly 1% in morning trading on Thursday.

More about his upgrade can be found here.

— Hakyung Kim

The S&P 500 opened modestly up as trading kicked off.

The broad index rose about 0.2% shortly after 9:30 a.m. ET. The Dow flickered around flat, while the Nasdaq Composite added 0.4%.

— Alex Harring

These are some of the stocks moving the most in premarket trading:

• Tesla — Shares of the electric vehicle manufacturer dropped more than 7% after it reported third-quarter earnings results that failed to impress investors.
• Netflix — The streaming entertainment provider jumped nearly 13% after quarterly results postmarket Wednesday and new subscriber numbers all topped analyst estimates.
• Peloton — The fitness stock slid 6.4% before the bell after a downgrade to underperform from Bank of America. Analyst Curtis Nagle cited declining member engagement as a reason for the downgrade.

Read the full list of stocks moving here.

— Lisa Kailai Han

Initial U.S. jobless claims came in at 198,000 for the week ended Oct. 14. That's well below a Dow Jones estimate of 210,000, and it marks another sign of a resilient economy despite higher interest rates.

— Fred Imbert

With more than half the trading week in the rearview mirror, the three major indexes are on track for losses.

The S&P 500 and Nasdaq Composite are poised for losses of 0.3% and 0.7%, respectively. The Dow is down a mere 0.02% on the week.

If this performance holds, it would mark the second straight losing week for the technology-heavy Nasdaq.

— Alex Harring

Wolfe Research's Chris Senyek said Federal Reserve Chair Jerome Powell should make similar remarks at the Economic Club of New York as he did last month.

Senyek said Powell's "hawkish pause" language delivered during the September Fed meeting should be apparent on Thursday. Powell is expected to start speaking at noon ET.

"We also expect Powell to once again emphasize the FOMC's 'data dependent' approach," he said. "Unfortunately, given recent developments, we believe that this backward-looking approach is likely to create additional policy uncertainty and place additional upward pressure on term premiums and longer-term yields. In our view, this is likely to last until the Fed sends more definitive signals about the likely direction and timing of its next move."

— Alex Harring

AT&T jumped 4.8% after delivering a third-quarter earnings report that exceeded analyst expectations.

The telecommunications company saw 64 cents earned per share in the quarter excluding items, beating the consensus estimate of analysts polled by LSEG, formerly known as Refinitiv, by 2 cents. Revenue came in at $30.35 billion, topping the forecast of $30.19 billion.

AT&T's stock has fallen more than 22% this year.

— Alex Harring

Blackstone dropped nearly 3% before the bell Thursday after offering a third-quarter earnings report that was worse than analysts expected.

Blackstone reported 94 cents earned per share and revenue at $2.32 billion. Analysts surveyed by LSEG, formerly known as Refinitiv, had anticipated $1.01 earned per share and $2.51 billion in revenue.

The investment firm's stock has climbed more than 37% in 2023.

— Alex Harring

The benchmark 10-year Treasury yield hit a high of 4.981% on Thursday, bringing it closer to the key 5% mark.

"Next stop 5.0% 10s," wrote Ian Lyngen and Benjamin Jeffery of BMO in a note. "It's a given at this point."

The rate strategist cited concern over growing Treasury auction sizes needed to fund the the widening U.S. fiscal deficit, along with the Federal Reserve's willingness to allow market rates to slow the economy for the central bank.

— Fred Imbert, John Melloy

European markets opened lower Thursday as investors assess the impact of the crisis in the Middle East as well as earnings and economic data.

The pan-European Stoxx 600 index was down 0.6% at the start of the session, with most sectors trading in negative territory. Industrials and construction led losses, each with a 0.9% dip.

— Hannah Ward-Glenton

South Korea's central bank again kept its benchmark policy rate at 3.5%, in line with expectations from a Reuters poll of economists.

In its release, the Bank of Korea said that inflation in the country is "projected to continue its underlying trend of a slowdown," but there are uncertainties regarding the future path of inflation.

South Korea's inflation rate rose to 3.7% in September from 3.4% in August, but the BOK noted that core inflation has stayed at 3.3% in September, the same as in August. 

While it expects inflation to continue to slow to the lower end of 3% by the end of 2023, and continue to slow in 2024, the BOK noted that "upside risks to inflation have increased due to the effects of higher global oil prices and exchange rates, and due to the Israel-Hamas conflict."

— Lim Hui Jie

The chief investment officer of South Korean tech giant Kakao has reportedly been arrested for suspected stock manipulation in connection with the tech giant's acquisition of K-pop label SM Entertainment.

Back in February, Kakao and K-pop agency Hybe were engaged in a bidding war to acquire a majority stake in SM. Hybe had launched an tender offer to buy shares from other shareholders after acquiring a 14.8% stake, but later suspended its takeover bid.

Yonhap News reported that South Korea's financial market watchdog suspects that Bae Jae-hyun and two other Kakao executives inflated SM's share price to surpass the tender offer price.

Kakao and its subsidiary Kakao Entertainment together later secured nearly a 40% stake in SM in March, clinching management control of the K-pop label.

— Lim Hui Jie

Japan recorded a trade surplus of 62.4 billion yen ($416.6 million) for September, beating expectations from economists polled by Reuters for a trade deficit of 42.5 billion yen.

Data from Japan's customs agency revealed that exports in September increased 4.3% year on year, while imports slid 16.3% compared to the same period last year.

According to FactSet, exports to Asia fell for the ninth straight month, which reflected ongoing China weakness. Exports were supported by shipments to Western markets, FactSet added.

— Lim Hui Jie

Investors shouldn't anticipate a softened tone from Federal Reserve Chair Jerome Powell when he speaks on Thursday, warns Nuveen chief investment officer Saira Malik.

"Markets were generally pleased with other Fed speakers over the last week or so where comments have been dovish, and they've been talking about perhaps taking future rate hikes off the table," she said Wednesday on CNBC's "Closing Bell: Overtime."

"I expect Powell to [come in] a little more hawkish tomorrow," she added. "Inflation is still an issue. The employment markets are still strong. The consumer is still spending. I think all of that together makes him lean a little more hawkish." Malik noted that her firm still expects one more rate hike before the end of the year.

The Fed Chair's speech arrives at a critical time for markets. Treasury yields have marched higher, with the 10-year yield topping 4.9% on Wednesday – a high dating back to 2007. Investors hope that Powell will give some insight on where the central bank stands with respect to policy going forward.

Read more about what to expect from Powell's speech here.

-Darla Mercado

The Dow Transports slid 3.4% Wednesday, marking its worst day since April 26.

Airlines within the 20-stock index suffered keenly Wednesday, with United Airlines shedding 9.7% and Alaska Air tumbling 5.2%. American Airlines and Delta fell more than 4% each.

J.B. Hunt Transport also dropped considerably, falling 8.8% a day after it posted quarterly results. Third-quarter earnings came in at $1.80 per share on $3.16 billion in revenue. Analysts polled by FactSet were calling for earnings of $1.83 per share on revenue of $3.17 billion.

— Darla Mercado, Nick Wells

Stock futures were higher Wednesday as traders look for further guidance from Federal Reserve Chair Jerome Powell on Thursday.

Futures tied to the Dow Jones Industrial Average added 23 points, or 0.07%. S&P 500 futures added 0.07%, while Nasdaq 100 futures ticked up 0.1%.

— Brian Evans