S&P 500 closes lower for a fourth straight day as recession worries jolt markets

Samantha Subin
Alex Harring

Stocks tumbled Tuesday, building on the previous session's losses, as fears of a recession gripped Wall Street.

The S&P 500 shed 1.44% to close at 3,941.26, while the Nasdaq Composite sank 2% to finish at 11,014.89. The Dow Jones Industrial Average dropped 350.76 points, or 1.03%, to settle at 33,596.34.

Stocks added to Monday's declines, with the S&P falling for a fourth straight day and its seventh negative session in eight. Tuesday's moves bring the Dow's two-day losses to more than 830 points.

Media and bank stocks, which tend to suffer during recessions, led the losses. Paramount Global's CEO warned of lower fourth-quarter advertising revenue, sending shares down nearly 7%. Morgan Stanley's stock slumped amid news it's planning to cut 2% of its workforce, continuing the recent layoff trend in the sector. Growth-focused technology names like Nvidia, Amazon and Meta Platforms also weighed on the market.

"Fundamentally, we are seeing another round of major layoffs this week and that only increases the odds that we have a hard landing in 2023 and enter a deeper recession than was initially expected," said Adam Sarhan, CEO of 50 Park Investments.

JPMorgan Chase's CEO Jamie Dimon echoed concerns of a downturn ahead, saying during an interview on CNBC's "Squawk Box" Tuesday that inflation would push the economy into a recession.

Inflation and its impact on the consumer "may very well derail the economy and cause a mild or hard recession that people worry about," he said.

With Tuesday's losses, the S&P is already down 3.2% this week and the Nasdaq is off by 3.9%.

Markets are largely expecting the Federal Reserve to slow its hiking pace to a half-percentage-point increase when it meets next week. But investors fear a step down in its clip won't be enough to stop the economy from entering a recession in 2023.

Lea la cobertura del mercado de hoy en español aquí.

Tue, Dec 6 2022 4:11 PM EST

Stocks finish lower, build on Monday's losses

Stocks tumbled Tuesday, building on losses from the previous session.

The S&P 500 shed 1.44% to close at 3,941.26, while the Nasdaq Composite sank 2% to finish at 11,014.89. The Dow Jones Industrial Average dropped 350.76 points, or 1.03%, to settle at 33,596.34.

— Samantha Subin

Tue, Dec 6 2022 3:52 PM EST

S&P 500's breadth is down for second day for first streak since June

The S&P 500 has at least 400 stocks trading down in what's the index's second straight day with breadth that low, according to Bespoke.

That's the first time the benchmark index's breadth has been performing so poorly on consecutive days since June 13.

The index is down 1.6% Tuesday.

— Alex Harring

Tue, Dec 6 2022 3:32 PM EST

Cowen sees TJX's path to $100 billion market cap

Cowen is increasingly bullish on TJX Companies' global retail ecosystem and sees a potential $1 billion market cap.

Analyst John Kernan raised the price target $1 to $85, which presents an upside of 7% from where it closed Monday. He said the owner of brands such as Marshalls and TJ Maxx has elevated its retail landscape to further pull in consumers, while increased automation can keep costs down. But one caveat is that 20% of shipping costs are from ocean and domestic freight, which is expected to stay elevated next year.

"We left meetings more bullish on TJX's scale within the global retail ecosystem," Kernan said. "TJX's opportunities across apparel, footwear, accessories, home, beauty, and kids are increasing."

He said the company could break the $100 billion market cap mark, which would mean at least solid single-digit growth from the current $91.8 billion cap.

The off-price retailer has gained 4.6% so far this year. That comes as lower-priced retail has moved more in vogue while inflation pinches consumers, making them more price-conscious. The stock is outperforming the S&P 500, which has lost more than 17% in the same period.

— Alex Harring

Tue, Dec 6 2022 3:25 PM EST

Boeing leads losses on the Dow

Shares of Boeing slumped 3.5% on Tuesday, weighing down the Dow Jones Industrial Average, which shed nearly 500 points during the trading session.

Boeing stock may have been weighed down because Textron won a U.S. Army contract that could be worth $70 billion over the years to make helicopters. Textron stock jumped 5% Tuesday.

Disney, which fell 3.7%, and Goldman Sachs, which lost 2.7%, also pulled the Dow lower.

—Carmen Reinicke

Tue, Dec 6 2022 3:16 PM EST

The bear market isn't over, according to Wolfe Research

Investors waiting for the end of the bear market that's slammed portfolios this year will likely have to wait even longer to see stocks meaningfully rise back to a bull trend, according to Wolfe Research.

The firm sees the slump in stocks continuing, and even falling further from trading prevailing prices.

"The current bear market isn't over – we expect another 25% to 35% drawdown from current levels," analyst Chris Senyek wrote in a note Tuesday.

CNBC Pro subscribers can read more here.

—Carmen Reinicke

Tue, Dec 6 2022 3:06 PM EST

More clarity on 2023 outlook will come in first six weeks of year, Cerity's Lebenthal says

The markets will begin 2023 with continued uncertainty, said Jim Lebenthal, partner at Cerity Partners. But he expects more clarity within the first six weeks of the new year.

Lebenthal said he expects the second half of the year will show signs of improvement over the first for the stock market, but he will know more following another Fed meeting, more economic data and next earnings season.

"Unfortunately, my degree of confidence in that has to be low right now," he said on CNBC's "Halftime Report" on Tuesday. "I need data to really pound the table. I think everybody needs data."

— Alex Harring

Tue, Dec 6 2022 3:02 PM EST

Stocks near lows as final hour of trading begins

Stocks hovered near session lows as the final hour of trading kicked off.

The S&P 500 shed 1.7%, falling for a fourth straight day, while the Nasdaq Composite sank 2.2%. The Dow dropped 450 points, or about 1.3%.

— Samantha Subin

Tue, Dec 6 2022 2:52 PM EST

Inflation is eroding consumer wealth and may bring 2023 recession, Dimon says

Jamie Dimon said in June that he was preparing the bank for an economic "hurricane" caused by the Federal Reserve and Russia's war in Ukraine.

American consumers are still doing well and supporting the U.S. economy, but that may change next year, according to JPMorgan Chase CEO Jamie Dimon.

Consumers have $1.5 trillion in excess savings from pandemic stimulus programs and are spending 10% more than in 2021, he said Tuesday on CNBC's "Squawk Box."

"Inflation is eroding everything I just said, and that trillion and a half dollars will run out sometime mid-year next year," Dimon said. "When you're looking out forward, those things may very well derail the economy and cause a mild or hard recession that people worry about."

Dimon also opined on cryptocurrencies, the necessity of fossil fuels and other topics during the wide-ranging interview.

— Hugh Son

Tue, Dec 6 2022 2:50 PM EST

Jamie Dimon says oil and gas will still be major source of energy in coming decades

JPMorgan CEO Jamie Dimon said on CNBC's "Squawk Box" on Tuesday morning that Russia's invasion of Ukraine has highlighted the continued importance of oil and gas to the global economy even as countries try to incentivize a shift to renewable energy.

"If the lesson was learned from Ukraine, we need cheap, reliable, safe, secure energy, of which 80% comes from oil and gas. And that number's going to be very high for 10 or 20 years," Dimon said.

The banking leader said that the focus should instead be on an "all of the above" strategy that continues to develop alternative energy sources without abandoning oil and gas. Cutting off oil and gas sharply could actually raise carbon emissions if countries turn to coal for their energy needs, Dimon said.

— Jesse Pound

Tue, Dec 6 2022 2:46 PM EST

Stocks with the biggest midday moves

Many stocks had large moves during Tuesday's trading session.

Textron – Shares of Textron jumped 6% after the company won a U.S. Army contract that could be worth $70 billion to provide next-generation helicopters.

Charter Communications – Charter Communications fell 5% after analysts at Citi added a negative catalyst watch to the company heading into its analyst day.

Paramount — Shares of media company Paramount slipped 7.5% after the CEO said it projects fourth-quarter advertising revenue to be lower than the third quarter. It also weighed on other media names such as Disney, which shed about 2%.

Read more here.

— Carmen Reinicke

Tue, Dec 6 2022 2:21 PM EST

CPI data is more important than Fed meeting and could prompt year-end rally, Stephanie Link says

Next week's consumer price index will have more impact on market movement than the Fed meeting, according to Stephanie Link, chief investment strategist at Hightower.

"A lot hinges on next week's CPI number," Link said on CNBC's "Halftime Report."

The CPI, a widely followed indicator of inflation, compares a weighted average basket of goods to track price changes over time. In October, the index rose less than expected, signaling inflation could be cooling. Data indicating a contracting economy or cooling inflation can support a market rally because it can signal to investors that the Fed has justification for slowing interest rate hikes.

Link said investors will have their eye on if the central bank goes ahead with the widely expected 50 basis point interest rate hike at next week's meeting, which would be a change from its recent pattern of 75 basis point hikes. But she said that's less important as investors are already expecting a smaller increase.

"That's kind of a ho-hum," Link said of a 50 basis point hike.

"The CPI means more to the markets overall," she said. "If it's a good number – meaning it's lower than expected – I think you can see a nice rally into the end of the year."

Link said the market could also remain "directionless" going into the end of the calendar year, but she predicted energy, materials and industrials will continue outperforming in that situation.

— Alex Harring

Tue, Dec 6 2022 2:03 PM EST

Financials are among the notable market losers as bank shares tumble

Shares of large banks were among the biggest losers in the major indexes as Tuesday's selloff intensified amid heightened recession fears.

Goldman Sachs slid about 2.5% around 1:57 p.m. ET, one of the largest decliners in the Dow Jones Industrial Average. Bank of America shares shed 5%, while SVB Financial Group tumbled more than 3%. The S&P 500 financials sector lost 1.3%.

Bank shares fell as bond yields dipped. At its lowest point during the day, the yield on the 10-year Treasury slid to 3.537%.

Morgan Stanley shares also dropped more than 3% on news that the bank will cut 2% of its workforce.

Darla Mercado

Tue, Dec 6 2022 1:42 PM EST

Morgan Stanley reportedly cutting 2% of workforce

Morgan Stanley is laying off about 1,600 workers, CNBC reported Tuesday, citing people familiar with the matter. The cuts equate to about 2% of the company's workforce.

The reported layoffs build on the trend that's gripped Wall Street in recent weeks as banks reimplement annual force reductions nixed during the pandemic.

Shares last traded down more than 3%

— Samantha Subin

Tue, Dec 6 2022 1:37 PM EST

Oil falls to lowest level since Dec. 27, 2021

Oil prices slumped Tuesday, weighed down by economic uncertainty even amid a Russian oil price cap and potential demand uptick thanks to China's reopening.

U.S. West Texas Intermediate crude for January delivery fell more than 4% to $73.85 in the afternoon Tuesday. Brent crude for February delivery slipped 4.34% to $79.09 per barrel.

The U.S. also said it sees oil production increasing next year, reversing its future outlook after five months of cuts. A monthly report from the Energy Information Administration said production is forecast to hit 12.34 million barrels a day in 2023, more than the daily record of 12.315 million barrels a day in 2019.

—Carmen Reinicke

Tue, Dec 6 2022 12:50 PM EST

Deutsche Bank upgrades Estee Lauder to buy on China reopening

Deutsche Bank upgraded shares of Estee Lauder to buy from hold, saying the higher likelihood China will ease Covid restrictions in 2023 raises confidence in the cosmetics stock.

"Although EL is likely to face challenges over the next several quarters, we see such difficulties as well telegraphed by recent guidance. Moreover, we believe recent developments in China give more credibility to category resurgence in that market/Hainan by CY2H23 (acknowledging potential parallel risks of US/ EU slowing)," according to a Monday note.

Shares were up about 2%.

CNBC Pro subscribers can read the full story here.

— Sarah Min

Tue, Dec 6 2022 12:28 PM EST

Paramount shares tumble on lower ad revenue warning

Paramount Global shares shed more than 7% after CEO Robert Bakish warned that the company's fourth-quarter advertising revenue will come in slightly below its third-quarter numbers.

The comments from Bakish come as streaming and media companies grapple with a worsening advertising landscape that's weighed on their businesses. Recession fears have also fueled concern about a growth and spending slowdown in the space.

Bank of America CEO Brian Moynihan said Tuesday at the Goldman Sachs financials conference that consumer spending growth was slowing down and that investment banking revenue was headed for a 55% to 60% decline in the fourth quarter.

The news dragged down other media stocks. Walt Disney, Comcast and Warner Bros. Discovery dropped 2.7%, 1.6% and 3.3%, respectively.

Disclosure: Comcast is the parent company of NBCUniversal and CNBC.

— Samantha Subin, Lillian Rizzo and Sarah Whitten

Tue, Dec 6 2022 11:51 AM EST

All S&P 500 sectors negative, communication services leads losses

All S&P 500 sectors fell Tuesday, led to the downside by the communication services sector, which tumbled 2.3%.

Shares of Match, Paramount Global and Meta Platforms shed about 6% each, dragging down the sector. Losses among Alphabet Live Nation, Walt Disney and Netflix also contributed to the tumble.

Information technology, consumer discretionary, and energy fell about 1.4% each, while utilities traded near the flatline.

Along with utilities, real estate suffered the slimmest losses, supported by slight gains from Realty Income, Regency Centers and Prologis.

— Samantha Subin

Tue, Dec 6 2022 11:34 AM EST

Silvergate shares fall 6% as Senator Warren seeks more information on the crypto bank's FTX dealings

Silvergate Capital fell 6% Tuesday, even after the company's CEO released a public letter attempting to "set the record straight" about its role and current state in the crypto ecosystem, and its relationship with FTX. The bank to crypto business has said that relationship is limited to deposits.

Pressure mounted on the stock after NBC News reported early Tuesday that Sen. Elizabeth Warren, D-Mass., sent a letter to Silvergate CEO Alan Lane requesting information about the company's dealings with FTX.

Since the sudden collapse of FTX in November, Lane has reiterated in interviews, including on CNBC, that the bank has a resilient balance sheet and ample liquidity should it need to satisfy withdrawal requests. He repeated this in Monday's letter and wrote that the bank has conducted "extensive due diligence" on FTX and its sister company, the trading firm Alameda Research, and that it takes risk management and compliance "extremely seriously."

— Tanaya Macheel

Tue, Dec 6 2022 11:12 AM EST

Goldman Sachs' Kostin sees a flat market in 2023 following some more downside risk in the near term

David Kostin sees the S&P 500 ending next year between 3,750 and 4,000, depending on whether the economy falls into a recession.

"If valuations are roughly at these levels [next year] – that's an optimistic scenario in my opinion – and there's not much earnings growth then you'll have basically a flat market," Goldman Sachs' chief U.S. equity strategist told "Squawk on the Street Tuesday. "On the other hand, if you have a recession – it's not the base case – if you have the earnings drop in the order of 11% next year, that would suggest the market ends in a year's time at 3,750."

In the near term, he sees downside risk around 3,600 for the S&P, citing the many companies that have negatively revised their 2023 earnings forecasts.

Although a recession isn't imminent in the near term, there's likely to be high, but falling, inflation, he said. He also recommended healthcare companies, consumer staples and telecoms as sectors that do best in that environment.

— Tanaya Macheel

Tue, Dec 6 2022 10:47 AM EST

Oppenheimer upgrades General Electric

Oppenheimer upgraded General Electric to outperform, saying several factors are boosting confidence in the stock next year, including strong momentum for its aviation business.

"Our Outperform rating reflects strong Aviation momentum along industry recovery path, with strong execution amidst widespread industry supply-chain challenges impacting the commercial business and internal production challenges serving military markets," Glynn wrote in a Monday note.

Shares of General Electric were up 1.8% Tuesday.

CNBC Pro subscribers can read the full story here.

— Sarah Min

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