Dow sheds nearly 400 points in worst day since March as economic worries return: Live updates

Sarah Min
Brian Evans

The Dow Jones Industrial Average fell Tuesday after the latest home sales and consumer confidence reports stoked concern over the state of the U.S. economy.

The Dow lost 388.00 points, or 1.14%, to 33,618.88 in its worst day since March. The 30-stock index closed below its 200-day moving average for the first time since May.

The S&P 500 slid 1.47% to 4,273.53, closing below 4,300 for the first time since June 9. Meanwhile, the Nasdaq Composite pulled back 1.57% to 13,063.61.

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S&P 500 ytd

Amazon shares fell 4% — the most of the mega-cap tech stocks — after the Federal Trade Commission filed an antitrust lawsuit, saying the online retailer keeps prices artificially high and hurts rivals.

August new home sales missed expectations. Homes under contract totaled 675,000 for the month, down 8.7% from July, according to the Commerce Department. Economists polled by Dow Jones anticipated a total of 695,000, which would have represented a 2.7% fall from unrevised July totals.

The Conference Board's consumer confidence index fell to 103 in September, down from 108.7 in August. Economists were anticipating 105.5, according to consensus estimates from Dow Jones. The expectations index tumbled to 73.7, below the level that observers associate with recessions.

JPMorgan Chase CEO Jamie Dimon warned interest rates may need to rise further to tamp down inflation, comments that added to bearish sentiment Tuesday. Bank stocks declined, with the SPDR S&P Regional Banking ETF (KRE) falling more than 1%. Wells Fargo shares dropped about 2%, while Morgan Stanley fell 1%.

Those moves would add to the market's losses for the month. The Nasdaq Composite is down nearly 7% in September, while the S&P 500 and Dow lost more than 5% and 3%, respectively. Among the catalysts dragging stocks lower this month is the Federal Reserve's warning that it sees fewer rate cuts next year. The news pushed the benchmark 10-year Treasury yield to levels not seen since 2007.

"Investors are still on edge, nervous, about what the rise in bond yields have to say about the economy, about the stock market, about the Fed, as well as the value of the dollar," said Sam Stovall, chief investment strategist at CFRA Research. "I think investors lack clarity and therefore are deciding to lighten up."

Investors this week are also grappling with negotiations in Washington, as lawmakers hope to avert a government shutdown that could take place as early as Oct. 1 if Congress doesn't agree on a spending bill.

Still, upcoming seasonal market tumult could present a window for investors. Though October is known as the "jinx month" because of the 1929 and 1987 crashes, it also has a reputation as a "bear killer," according to the "Stock Trader's Almanac."

— CNBC's Jeff Cox contributed to this report.

Tue, Sep 26 2023 4:24 PM EDT

Stocks close lower Tuesday

The major averages closed lower Tuesday.

The Dow Jones Industrial Average lost 388.00 points, or 1.14%, to 33,618.88 in its worst day since March. The 30-stock index closed below its 200-day moving average for the first time since May.

The S&P 500 slid 1.47% to 4,273.53, closing below 4,300 for the first time since June 9. Meanwhile, the Nasdaq Composite pulled back 1.57% to 13,063.61.

— Sarah Min

Tue, Sep 26 2023 3:46 PM EDT

Wall of corporate debt refinance starting in 2024 is another stock market headwind

Corporate debt refinancings are going to start hitting profits more urgently starting in 2024, according to Wolfe Research chief investment strategist Chris Senyek.

"Refi's are going to become a much bigger factor next year," Senyek said in a note Tuesday. "[T]hat higher interest expense is likely to create a $5-$7/share headwind for S&P 500 operating EPS in 2024." Wolfe sees S&P 500 operating EPS falling 4.5% in 2024 to $210 whereas the market consensus is for 12% growth to $249.

Wolfe included a table showing $903 billion in U.S. corporate debt (excluding financial companies) coming due in 2024, up 343% from $204 billion in 2023. That rises another 42% in 2025 to $1.28 trillion and 15% in 2026 to $1.47 trillion, before starting to come down.

Senyek also wrote that he now expects yields on the 10-year Treasury note to climb to 5% before the end of 2023, fueled by a wall of U.S. Treasury debt issuance, higher oil prices and the Bank of Japan easing off on its yield curve control policy.

— Scott Schnipper, Michael Bloom

Tue, Sep 26 2023 3:36 PM EDT

Current market correction will create better opportunities for small-caps in 2024, says Citi's Steven Wieting

Hawkish signaling from the Federal Reserve may have put downward pressure on equities in recent weeks, but Citi Global Wealth's Steven Wieting believes that the current correction will make way for better investing opportunities in 2024, especially for smaller companies.

As the U.S. central bank has rationed down the availability of credit in the economy, the firm's chief investment strategist told CNBC that investors have been "focused only on the largest and safest balance sheets," pushing up shares of super large-cap companies.

The way forward is not to take a negative view of the leading large-cap stocks, but rather to focus positively on the growth stocks that have been left behind, Wieting said. For instance, small- and mid-cap growth names are currently trading at nearly a 40% discount against large-caps, despite growing earnings more rapidly over the long term, the analyst said.

"It really doesn't mean you have to take a negative view of companies that have benefited from AI or EV at the highest levels, but I think the real return opportunity will be with broadening," Wieting added. "It's increasingly something that we're looking forward to do to doing with more small-caps in portfolios, particularly on a pullback in markets which we seem to be getting."

— Lisa Kailai Han, Sarah Min

Tue, Sep 26 2023 3:36 PM EDT

Biggest gold ETF under pressure

The market's largest gold ETF is not doing much to protect investors from the recent decline in stocks and bonds.

The SPDR Gold Shares fund (GLD) was tracking toward its third negative session in four on Tuesday afternoon. The fund is now down about 2% month to date.

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The GLD ETF is heading for a losing September.

Gold could conceivably get a boost as the odds of a U.S. government shut down rise, but the non-yielding metal may be hard sell for investors when interest rates are climbing.

— Jesse Pound

Tue, Sep 26 2023 3:35 PM EDT

Evercore ISI lifts Micron price target ahead of earnings

Evercore ISI is getting a little more bullish on Micron Technology heading into Wednesday's earnings report.

Analyst Matthew Prisco lifted his price target on the memory chipmaker to $90 from $80 a share, saying that Micron looks well situated for a modest beat and guidance raise as pricing and bit volume trends improve.

After an "unprecedented downturn and memory utilization cuts, we believe Micron is positioned for strong EPS reacceleration, which will continue to gain momentum as the company regains lost market share related to the [Cyberspace Administration of China's ban] while resuming more meaningful cost downs," he wrote in a Tuesday note.

Prisco also expects Micron to get a lift from artificial intelligence as data-heavy models rely on higher-bandwidth memory. He also forecast that earnings power can approach $10 by the 2025 calendar year.

Micron shares have rallied 36% this year, with Evercore ISI's price target implying about 31% upside from Monday's close.

— Samantha Subin

Tue, Sep 26 2023 3:00 PM EDT

Wingstop shares climb on Stifel buy rating

Stifel analyst Chris O'Cull upgraded Wingstop to buy from hold and assigned a price target of $200, implying shares stand to gain more than 15% from Monday's close.

Shares of Wingstop climbed 2.5% on Tuesday.

"We believe the company is poised to successfully lap difficult comp comparisons in the 2H23 as menu innovation and delivery channel growth, augmented by rapid expansion in the national ad fund, continue to build top-of-mind awareness and drive incremental usage," O'Cull said in a Monday note. "The company's growing scale also translates into better visibility into long-term food costs."

O'Cull added that greater advertising, new products and incremental delivery partnership, as well as the company's domestic space and international growth, make it "unlikely that development will slow soon."

— Pia Singh

Tue, Sep 26 2023 2:39 PM EDT

Major bond ETFs trading near lowest level in more than a decade

The latest spike in Treasury yields has dragged down some of the biggest bond funds in the market to new milestones.

The iShares 20+ Year Treasury Bond ETF (TLT) closed at $89.18 on Monday, which was its lowest close since Feb. 10, 2011, according to FactSet. Other major bond funds are trading at similar levels relative to history.

And the sell-off could get worse. Some Wall Street pros see a chance that the benchmark 10-year Treasury yield can can climb to 5%.

Read more about the impact of changing yields on bond funds at CNBC Pro.

— Jesse Pound

Tue, Sep 26 2023 2:28 PM EDT

Wall Street is watching to see if Costco raises its membership fee

Analysts are expecting a solid earnings report out of Costco after the bell, but focus is on a number that can't be found in the top or bottom line: membership fees.

Bernstein analyst Dean Rosenblum said he'll be watching to see if there's a fee increase, as well as for insights into how a recent crackdown on membership sharing has impacted the company. He said the company is like due for an increase of around $5 based on historical data, which shows an increase of about that amount every half decade.

"Now that food inflation has abated somewhat, Costco may capitalize on the moment and plan for a fee increase," he said in a note to client last week.

But UBS analyst Michael Lasser said the wholesale retailer will likely hold off until next year, citing previous commentary from management around the topic.

"In the past year, COST signaled several times that it was not ready to raise its membership fees given the cost pressures its members were experiencing," Lasser told clients last week.

— Alex Harring

Tue, Sep 26 2023 2:07 PM EDT

Dow drops to session lows in early afternoon trading

The Dow Jones Industrial Average dropped to session lows in early afternoon trading on Tuesday. The index fell more than 400 points, or 1.2%, setting it up for its biggest one-day slide since March 2023.

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DIJA ytd chart

At the highs of the day's trading session, the index was down by 126 points.

The other two major indexes also declined on Tuesday, with the S&P 500 falling as much as 61 points, or 1.4%, and the Nasdaq Composite falling as much as 201 points, or 1.5%.

— Lisa Kailai Han, Sarah Min

Tue, Sep 26 2023 2:00 PM EDT

Two stocks buck Dow's downturn

Advances in Amgen and Travelers Companies helped restrict losses for the Dow.

The two stocks rose 0.4% and 0.3%, making them the only two in the 30-stock index to trade clearly above their flatlines.

The Dow as a whole fell about 1%, led lower by Salesforce and Microsoft, which were both down about 2%.

— Alex Harring

Tue, Sep 26 2023 1:45 PM EDT

RBC initiates Utz at outperform with a $17 price target

Near-term macroeconomic headwinds may slow down packaged food manufacturers, but Utz is set for a strong growth outlook over the long run, according to RBC.

Analyst Nik Modi initiated coverage of the salty snack food producer at an outperform rating, setting a price target of $17. That implies a 25% upside from the stock's Monday close of $13.56.

Shares of Utz are down over 14% since the start of the year.

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Utz YTD chart

"When taking a 12-18 month view, we believe there is a compelling buy case for UTZ, including: 1) getting pure-play exposure to one of the more attractive categories across consumer staples, 2) upside from share gains as the company expands geographically, 3) convergence of margins relative to peers, and 4) a potential take-out scenario," Modi wrote.

— Lisa Kailai Han, Michael Bloom

Tue, Sep 26 2023 1:19 PM EDT

These are the stocks posting the biggest midday moves

Check out the companies making headlines in midday trading.

  • Cintas — Shares fell 4.8% after the company reported its 2024 fiscal first-quarter earnings. The corporate apparel company posted $3.70 earnings per share on $2.34 billion in revenue, topping analyst consensus estimates of $3.67 per share in earnings and matching revenue forecasts, per StreetAccount. Cintas raised full-year guidance, but the lower end of its EPS and revenue predictions came in below analysts' estimates.
  • Pinterest — Shares of the image-sharing platform rose nearly 1% after HSBC initiated coverage of the stock with a buy rating. The Wall Street firm said Pinterest has "the right management team in place, a product fit for shopping and a differentiated capital-light strategy to deliver on its foray into social commerce."
  • United Natural Foods — Shares sank 24% on Tuesday after United Natural Foods forecast earnings per share and adjusted EBITDA in the coming year below analysts' estimates, citing profitability headwinds. The food company's guidance ranges between a loss of 88 cents per share to earnings of 38 cents per share, excluding items, while analysts called for $1.94 per share, according to StreetAccount. The company's fiscal fourth-quarter revenue missed analysts' $7.47 billion estimate.

Read here for the full list.

— Pia Singh

Tue, Sep 26 2023 12:43 PM EDT

Domino's is an ‘under-appreciated revival story,’ investment firm says

Oppenheimer said Domino's Pizza is entering a self-help cycle and is a top idea heading into 2024, marking a turn from a more pessimistic outlook the firm had for the past 18 months.

"We view DPZ as an under-appreciated revival story into '24, and elevate the idea into our 'top picks,'" analyst Brian Bittner said in a note to clients Tuesday.

CNBC Pro subscribers can read the full story here.

— Alex Harring

Tue, Sep 26 2023 12:14 PM EDT

UAW strikes could put upward pressure on inflations, says Barclays

The ongoing United Auto Workers strike could present a risk to the fight against inflation, according to Barclays. 

The strike, which has targeted plants across the "Big Three" automakers — FordGeneral Motors and Stellantis — risks paring down what were already low levels of auto inventories, analyst Pooja Sriram said in a Monday note.

CNBC Pro subscribers can read the full story here.

— Hakyung Kim

Tue, Sep 26 2023 12:13 PM EDT

FTC files antitrust lawsuit against Amazon

Amazon shares slumped 3% after the Federal Trade Commission filed an antitrust lawsuit against the technology giant.

The FTC and attorney generals from 17 states accused the company of maintaining "monopoly power" by inflating prices, degrading quality for shoppers and stifling its competition.

The complaint also alleged that the company uses two key tactics, including anti-discounting measures, to "unlawfully maintain" its position.

— Samantha Subin, Annie Palmer

Tue, Sep 26 2023 12:05 PM EDT

Dow falls below 200-day moving average

Tuesday's sell-off pushed the Dow Jones Industrial Average below its 200-day moving average, a key long-term technical level. The move suggests the benchmark's long-term momentum may be waning.

The Dow hasn't closed below that level since May.

— Fred Imbert

Tue, Sep 26 2023 11:52 AM EDT

Liberty Media shares gain on merger proposal with SiriusXM

Tracking shares of Liberty Media Corp.'s Liberty Sirius XM jumped more than 5% after the media conglomerate proposed a merger with SiriusXM to create a new publicly-listed company.

The new company — controlled by the media conglomerate and created by splitting off its shares in the satellite radio company — would be called New SiriusXM. Liberty Media currently hold a roughly 83% stake in SiriusXM.

"Liberty's proposal rationalizes the dual corporate structure between LSXM and SiriusXM and provides value to all shareholders with a more flexible and attractive currency in New SiriusXM," said Liberty Chief Executive Greg Maffei.

SiriusXM shares inched about 0.2% lower following the news.

— Samantha Subin

Tue, Sep 26 2023 11:46 AM EDT

Consumers are becoming pessimistic on the future, according to strategist

Consumer confidence levels declined in September and missed analyst expectations. September's consumer confidence reading came in at 103, down from 108.7 in August and below the 105.5 estimate. Notably, the expectations index tumbled to 73.7, less than the 80 reading generally associated with recessions.

"Consumers feel good about their current situation, including employment prospects, but they are more pessimistic about the future," said Sonu Varghese, Global Macro Strategist at Carson Group.

"Consumer spending reflects this, running above the pre-pandemic trend, however, ongoing news about a potential recession, and issues like higher mortgage rates, student loan repayments, strikes and a potential government shutdown cloud the future outlook," he added.

— Hakyung Kim

Tue, Sep 26 2023 11:18 AM EDT

S&P 500 dips below 4,300 for the first time since June 9

All three major indices accelerated losses Tuesday morning after the release of disappointing economic data.

The S&P 500 fell roughly 1% to 4,295, its lowest level since June 9. Year to date, the index is still up nearly 12%.

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S&P 500 ytd chart

August new home sales fell short of analyst expectations and were also down 8.7% from July, according to the Commerce Department. The Conference Board's consumer confidence index also missed expectations, falling to 103 in September from 108.7 in August.

Comments made by JPMorgan Chase CEO Jamie Dimon anticipating additional room for rates to rise also pushed stocks down earlier this morning.

— Lisa Kailai Han, Jeff Cox

Tue, Sep 26 2023 11:10 AM EDT

All 11 S&P 500 sectors trade in negative territory

The selloff in the S&P 500 was broad-based, with all 11 sectors trading in negative territory during midday trading. The broader index was last down by roughly 1%.

Communication services was the biggest laggard, down by more than 1.4%. Consumer discretionary, information technology and utilities were also down by over 1.3%.

Health care and energy outperformed in the broader index, though both were still down by more than 0.4%, each. Energy is on pace to be the best-performing S&P 500 sector in September, up by more than 1.9%.

— Sarah Min, Lisa Kailai Han

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