The S&P 500 and Nasdaq Composite closed lower for a third straight session Tuesday as traders struggled to recover from sharp losses suffered in the previous session and looked ahead to more economic tea leaves coming later in the week.
The Nasdaq Composite shed 0.59% to close at 10,983.78. The S&P 500 lost 0.16%, ending the day at 3,957.63. The Dow Jones Industrial Average notched a marginal gain, closing 3.07 points, or 0.01%, higher at 33,852.53.
Investors are watching for data coming later this week, including JOLTS job openings on Wednesday and November payrolls Friday, for insight into how the economy is performing. They are also waiting for Federal Reserve Chair Jerome Powell's scheduled speech at the Hutchins Center on Fiscal and Monetary Policy at Brookings on Wednesday for clues into whether the central bank will slow or stop interest rate hikes.
"The market has shifted focus from the conclusion of the third quarter earnings reporting season to now additional factors that are likely to influence the Federal Reserve in their December deliberations," said Bill Northey, senior investment director at U.S. Bank. "Investors are clearly focused on the path ahead rather than looking in the rear-view mirror."
The markets largely failed to reverse course from the steep and broad losses Monday after protests in mainland China against the country's zero-Covid policy started over the weekend. The protests elevated concerns over the potential for Chinese Covid protocols that could once again hamper global supply chains.
Overnight, however, global markets seemed to catch a reprieve as a Chinese official told reporters that 65.8% of people "over age 80" had received booster shots. On top of that, the government reported the first decline in Covid infections within mainland China in more than a week. That contributed to a rally in the Hong Kong and Shanghai markets.
One more stock hit a fresh 52-week low in addition to the open. Shares of Medtronic were trading at lows not seen since March 2020.
Meanwhile, two new stocks were trading at new 52-week highs after the open. Shares of Ross Stores traded at levels not seen since November 2021. Meanwhile, Merck & Co. traded at all-time highs going back to 1978.
— Chris Hayes, Sarah Min
The Dow Jones Industrial Average closed 3.07 points, or 0.01%, higher after trading down for much of the day. The index ended the day at 33,852.53.
Meanwhile, the Nasdaq Composite finished lower by 0.59%, to close at 10,983.78. The S&P 500 slipped by 0.16% to close at 3,957.63.
— Alex Harring
The next 10 to 14 days will be a "data-rich period" that will help investors and policymakers alike see how inflation and growth will be balanced going forward, said Bill Northey, senior investment director at U.S. Bank.
Northey said he'll be watching closely for the labor report coming Friday for any signs of economic tightening. Next week, he said he'll be watching the producer price index for insights into if inflation is cooling.
"It's a data-rich period of time over the course of the next 10 to 14 days," he said, adding that it will help help investors and policy makers see "what is necessary" when it comes to slowing economic growth to bring down inflation.
He said portfolios are currently being positioned "more defensively," being modestly overweight to short-duration, high-quality fixed incomes, which can include bonds and bills. Meanwhile, Northey he said he is recommending being underweight on global equities.
— Alex Harring
Loop Capital is staying bullish on shares of Apple even amid concerns that China's Covid-19 lockdowns could weigh on iPhone Pro production.
"The long and the short of it is that while we believe Street could have estimates set too high for Dec [quarter] – Jun Q ... we believe some degree of this is in the stock ... while also now seeing a commensurate revenue and EPS upside opportunity beginning in the Sep Q '23," wrote analyst Ananda Baruah in a note to clients Tuesday.
Amid an uncertain demand backdrop and supply constraints, Baruah said expected units for the December period could move as much as 10 million units lower.
The analyst maintained the firm's $180 price target, suggesting shares could rally 25% from Monday's close.
"What could get us more cautious could be the updating of our iPhone [average selling price] work, should it show a materially more conservative delta vs Street," Baruah said, noting its possible for these figures to come in lower than Wall Street's expectations.
— Samantha Subin
The three major indexes were trading down as the final hour of trading kicked off.
The Dow was down 0.2% despite briefly turning positive earlier in the afternoon.
The Nasdaq Composite and S&P 500 lost 0.7% and 0.3%, respectively.
— Alex Harring
The markets are moving little with investors looking ahead to Wednesday's speech from Fed Chair Jerome Powell and data on jobs, labor and inflation coming later in the week, according to Ross Mayfield, investment strategist analyst at Baird.
"This is a really big week of economic data," Mayfield said. "A lot of times, when you have a handful of big catalysts in the near term, the market will kind of just trade sideways or be a little calm in anticipation of those events."
But Mayfield said he advises clients, especially those looking at long-term strategies, to keep focused on bigger investing goals and not be swayed by short-term ups and downs.
"If you're just a long-term investor, it really is just about staying the course," he said.
— Alex Harring
The Dow turned positive as investors entered the penultimate hour of trading.
After trading down for much of the day, the 30-stock index moved up 0.1%.
— Alex Harring
Recent data from Salesforce suggests that Apple Pay is successfully winning over consumers and taking share away from PayPal, which is one of its longstanding competitors, Deutsche Bank says.
The findings show that Apple Pay grew 52% in November on a year-over-year basis, and 59% in the U.S. alone, even though it accounts for just 5% of global e-commerce purchases, wrote analyst Bryan Keane in a note to clients Monday.
At the same time, usage of PayPal, which makes up 16% of e-commerce purchases worldwide, slipped 8% year over year and 4% on that same basis in the United States.
"We continue to expect PYPL will face the steepest competition in the coming months and years from Apple Pay, a belief that has only been strengthened after our review of Salesforce's holiday spending data," he said.
Both stocks were trading down more than 2% in midday trading as technology stocks more broadly underperformed.
— Samantha Subin
A Cyber Monday price comparison from Loop Capital showed Best Buy had narrowed price differences with competitors. The firm said the closing of that gap put the electronics retailer in a good position entering the holiday season.
Managing director Anthony Chukumba said Best Buy was largely at "price parity" with Walmart when looking at a basket of 30 electronics, while Amazon remained the low-price "leader." Still, he said Best Buy's ability to make the price gap smaller with the two other retailers was encouraging, especially as consumers feel more price conscious amid inflationary pressures.
"Given the relative price parity we believe Best Buy is well positioned for the holiday selling season," he said in a note to clients.
He also said the company will be helped by its omnichannel model, wide assortment of merchandise and strong costumer service.
Best Buy was trading up 2.1% Tuesday. The electronics retailer has lost 17.6% so far this year, performing slightly worse than the S&P 500.
— Alex Harring
The major indexes remained down as investors looked to the second half of the trading day.
The Dow was down about 0.2%. Meanwhile, the S&P 500 and Nasdaq Composite shed 0.3% and 0.5%.
— Alex Harring
These companies are making headlines in midday trading Tuesday.
— Sarah Min
The S&P 500 sectors were split in Tuesday trading.
The best performer was real estate, up 1%. Utilities was performing the worst, down 1.1%.
— Alex Harring
Online shopping is taking a greater share of holiday spending this year, benefitting a few retail stocks, according to Citi.
"As we enter the prime holiday shopping season, we believe eCommerce is gaining share of overall transactions," analyst Ronald Josey wrote in a Monday note. "Adobe's reported eCommerce sales came in ~2% above its the Cyber Five projections, on average, Salesforce and MasterCard SpendingPulse reported Black Friday U.S. eCommerce sales rose +10% Y/Y and +14% Y/Y, respectively, and Shopify reported +17% Y/Y growth in BF sales globally with strength in the U.S., U.K., and Canada."
While there are some continued challenges for retail — a weaker economic environment and U.S. consumer — Citi is confident in holiday 2022 shopping trends so far and project mid-to-high-single-digit growth for eCommerce sales.
"Amazon remains our top pick overall and we note Meta and Alphabet should also benefit from holiday promotions," said Josey.
— Carmen Reinicke
Jefferies downgraded shares of the generator maker Generac to an outperform rating.
The firm said this "game-changing" technology poses a risk to Generac's business model and the long-term penetration of its home standby generators.
CNBC Pro subscribers can read more on the downgrade here.
— Samantha Subin
Data out of Germany, Spain and Brazil signaled that inflation in the country could be cooling, as desired by officials, Reuters reported.
German consumer prices in comparison to other European Union countries rose 11.3% in November, according to data from its federal statistics office. That's in line with estimates from analysts polled by Reuters and showed it has cooled slightly off the record high posted in October.
In Spain, consumer prices in the year leading up to November rose 6.8%, under the 7.3% seen in October. Inflation without food or energy prices came to 6.3%, up slightly from the 6.2% seen the month before.
Brazil's measure of credit card default ratios rose to the highest level seen in nearly four years, according to Retuers, pointing yet again to the argument that monetary restriction actions are having an impact.
— Alex Harring
Assets related to China are moving today as the country announced a push for vaccines for the elderly to move forward with reopening amid protests on zero-Covid policy lockdowns.
The China internet ETF is up more than 2% today and on pace for its best month since inception, up 38%. The China Large-Cap fund is up more than 28% on the month, its best performance since its inception in 2004. MSCI China is also up 26% this month, inline for its best gain since March 2011.
Emerging market ETFs are also outperforming - the EM Asia ETF is up 16%, on pace for its best month ever and the EM ETF is up nearly 13% in November, its first positive month in six.
A slew of individual stocks are boosting fund returns. The Real Estate company Country Garden is up more than 200% this month while Real Estate Development company Longfor Group is up 11% today and 131% in November. Alibaba Health and Tencent Music have gained almost 84% and 75% this month, respectively.
Commodities are also outperforming. The Steel ETF is up 15.3% on the month, set for its best month since November 2020. The Copper Miners ETF is up 21% on the month.
—Carmen Reinicke, Gina Francolla
Wells Fargo raised its price target on AutoZone on Tuesday, noting that its shares have outperformed the S&P 500 (21% versus 2% since its fiscal fourth quarter) and that industry dynamics are have proven "resilient."
"AZO is clearly taking share, and post recent management meetings, we see reasons for FY23 upside via DIY volume normalization, [double digit percentage] commercial growth, and 2H margin recovery," Zachary Fadem, an equity analyst at Wells Fargo, said in a note to investors. "In our view, AZO sits among few retailers with clear defensive characteristics yet upside to FY23 estimates."
— Tanaya Macheel
Consumer confidence edged lower in November but was slightly above Wall Street expectations, the Conference Board reported Tuesday.
The board's Consumer Confidence Index fell to 100.2 for the month, down from 102.2 in October. Economists surveyed by Dow Jones had been looking for a reading of 100.
Along with the declining confidence came more worries about prices, with the expectations for inflation 12 months from now rising to 7.2%, the highest since July and up 0.3 percentage point from October. Expectations for interest rates also climbed, with 67.2% of respondents seeing an increase over the next year, compared to 65.5% in October.
The expectations index for the short-term outlook also declined to 75.4 from 77.9, and the present situation index fell to 137.4 from 138.7.
"Consumers' expectations regarding the short-term outlook remained gloomy. Indeed, the Expectations Index is below a reading of 80, which suggests the likelihood of a recession remains elevated," said Lynn Franco, The Conference Board's senior director of economic indicators.
—Jeff Cox
Wells Fargo is "cautiously optimistic" about this year's holiday shopping season after better-than-expected Black Friday results.
Consumers spent a record $9.12 billion online on the day after Thanksgiving, up 2.3% year over year. That increase was likely at the expense of physical store sales, said Wells Fargo analyst Brian Fitzgerald.
"We expect consumers to be more value-driven this holiday shopping season, which should benefit online retailers and AMZN in particular," he wrote in a note Tuesday.
Amazon had a price advantage over 12 leading retailers in Profitero's annual price comparison study and was the price leader in 14 of 15 categories, Fitzgerald pointed out. It tied with Chewy as a price leader in pet supplies, he said.
"This set-up, however, could change materially through the end of December as excess inventory levels across retailers could lead to deeper discounting in certain categories," Fitzgerald wrote. "If this happens, especially late in the season, we expect to see some incremental purchases from consumers that continue looking for last-minute bargains."
— Michelle Fox
The three major indexes traded close to flat as markets opened.
The Dow dropped 0.2%. Meanwhile, the S&P 500 and Nasdaq Composite were both about 0.1% lower.
— Alex Harring