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

Alex Harring
Samantha Subin
Traders work on the floor of the New York Stock Exchange during morning trading on August 25, 2023 in New York City.

Stocks closed higher Monday as traders awaited a deluge of corporate earnings reports and shrugged off a rise in Treasury yields.

The Dow Jones Industrial Average traded 314.25 points higher, or 0.93% to close at 33,984.54, marking its best day since September. The S&P 500 climbed 1.06% to end the day at 4,373.63, while the Nasdaq Composite added 1.2% to 13,567.98.

Nike and Travelers Companies led the Dow higher on Monday with advances of around 2.1%. All 11 S&P 500 sectors traded higher in the session.

Earnings season heats up this week with 11% of the S&P 500 slated to report results. Some notable names on deck include Johnson & Johnson, Bank of America, Netflix and Tesla.

Those results will follow a solid start to the reporting period. Brokerage Charles Schwab rallied 4.7% on Monday after surpassing Wall Street expectations for earnings per share in the third quarter. JPMorgan Chase, Wells Fargo and UnitedHealth rose Friday after posting their latest quarterly results.

Some on Wall Street are bracing for more volatility into year end amid rising yields and oil prices, sticky inflation and conflict in the Middle East. But a focus on earnings can give investors optimism in the short term, said Lisa Erickson, senior vice president at U.S. Bank Wealth Management.

"I really see a relief rally going on," said Erickson, citing recent earnings reports and a "digestion" of interest rate moves. "Sentiment has just turned relatively more positive."

Over the weekend, Israel's military continued urging residents to evacuate northern Gaza amid a widely anticipated ground invasion. Secretary of State Antony Blinken promised U.S. support in a meeting with Israeli President Isaac Herzog on Monday.

The 10-year U.S. Treasury yield rose around 8 basis points to 4.712% on Monday, while oil prices slipped as investors parsed the latest updates out of the war.

Monday's advance follows a mixed week for stocks. The S&P 500 advanced 0.5% for its second consecutive positive week, while the Dow gained 0.8%. The Nasdaq Composite lost about 0.2% for the week.

"Last week was clearly a shock reaction to the geopolitical surprise," said Aoifinn Devitt, chief investment officer of Moneta Group. "We're normalizing the turmoil ... and factoring it in, and then we're kind of getting back to fundamentals."

Mon, Oct 16 2023 4:04 PM EDT

Stocks close Monday higher

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

Mon, Oct 16 2023 3:52 PM EDT

Demand for packaging remains weak. BofA says weight loss drugs aren't helping.

"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

Mon, Oct 16 2023 3:42 PM EDT

Why history shows this quarter could be strong

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

Mon, Oct 16 2023 3:29 PM EDT

BMO Capital Markets downgrades Enphase Energy, sees week residential solar demand

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

Mon, Oct 16 2023 3:17 PM EDT

Fed's Harker says rate hikes have hit housing affordability

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

Mon, Oct 16 2023 3:01 PM EDT

Stocks head for winning session

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

Mon, Oct 16 2023 2:58 PM EDT

Retail ETF on pace for best day since June

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

Mon, Oct 16 2023 2:42 PM EDT

Goldman Sachs upgrades D.R. Horton on higher volume

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

Mon, Oct 16 2023 2:13 PM EDT

5 healthcare stocks hit new 52-week lows

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.

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MRNA 1-day chart

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

Mon, Oct 16 2023 1:46 PM EDT

All 11 sectors in S&P 500 advance

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

Mon, Oct 16 2023 1:20 PM EDT

Stocks making midday moves

Here are some of the name making midday moves:

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

Mon, Oct 16 2023 12:54 PM EDT

The 10-year Treasury could pull back below 4% by the middle of 2024, UBS' Mark Haefele says

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

Mon, Oct 16 2023 12:17 PM EDT

UBS upgrades UnitedHealth after third quarter earnings beat

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

Mon, Oct 16 2023 11:53 AM EDT

Monday's biggest Nasdaq winners

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

Mon, Oct 16 2023 11:25 AM EDT

Most stocks in Dow trade higher amid rally

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

Mon, Oct 16 2023 10:59 AM EDT

Indirect economic impacts of geopolitical conflicts could be persistent, says strategist

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

Mon, Oct 16 2023 10:28 AM EDT

Carl Icahn blames his losing bet against malls on 'a rigged market,' WSJ says

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

Mon, Oct 16 2023 10:00 AM EDT

Varonis Systems rallies 5% after Morgan Stanley highlights generative AI catalyst

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.

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Varonis Systems stock.

"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

Mon, Oct 16 2023 9:31 AM EDT

Stocks open Monday higher

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

Mon, Oct 16 2023 9:06 AM EDT

Jefferies upgrades Pfizer, recommends long-term view on stock

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

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