Dow closes lower for a second day as late-2023 rally sputters: Live updates

Alex Harring
Hakyung Kim

The Dow Jones Industrial Average and the S&P 500 slid on Tuesday as a recent rally on Wall Street lost steam.

The 30-stock Dow slid 79.88 points, or 0.22%, to close at 36,124.56. The S&P 500 inched lower by 0.06% to 4,567.18. The Nasdaq Composite gained 0.31% to end at 14,229.91 as technology shares outperformed.

GitLab jumped 11.5% after the open-source software development platform beat quarterly financial expectations and issued strong guidance for the current quarter. Nio climbed 1.5% after the Chinese electric vehicle maker reported narrowing losses in the third quarter.

Tuesday's moves follow Monday's losing session for all three indexes, which called into question whether the market had run up too far too fast. Monday's pullback came on the heels of five consecutive positive weeks for the three averages.

Despite their recent performance, the three indexes are still up on the quarter and year. That underscores the strength of the market's rally leading up to the current trading week.

"Today is just a little bit of an unwinding of the theme of November," said Rhys Williams, chief strategist at Spouting Rock, referencing the stock market's strong performance in 2023's penultimate month. "It's too soon to draw any conclusions that somehow the risk-on trade is over."

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The S&P 500 this year

Stocks came off session lows on Tuesday as the U.S. 10-year Treasury yield fell below the key 4.2% level. The move came on the back of data signaling cooling in the labor market.

Technology shares were boosted in particular following the data, pushing the Nasdaq into positive territory for the session. Notably, mega-cap tech stocks Apple and Nvidia each added more than 2%.

The Russell 2000 fell more than 1% on Tuesday, reversing course after bucking the downtrend on Monday. Still, the small-cap index has jumped more than 5% over the past month, raising hopes of a broadening market rally and interest rate cuts from the Federal Reserve on the horizon.

Tuesday trading is "reflective of the uncertainty that traders have in terms of the Federal Reserve and interest rate trajectory," said Greg Bassuk, CEO of AXS Investments. "Investors are looking to hang their hat on greater certainty in terms of both economic data and the likelihood of a Fed change in sentiment."

Tue, Dec 5 2023 4:07 PM EST

Dow finishes Tuesday lower

The Dow ended Tuesday's session lower.

The blue-chip average closed down around 0.2%, while the S&P 500 was near flat. The Nasdaq Composite outperformed, climbing about 0.3%.

— Alex Harring

Tue, Dec 5 2023 3:54 PM EST

Expectations for rate cuts are 'overdone,' BlackRock strategist says

Traders are wrong to expect the Federal Reserve to aggressively cut rates in 2024, according to Wei Li, the global chief investment strategist at BlackRock

"Currently, market pricing for how early the first cut is, as well as how many cuts there will be next year, is a bit overdone in our view," Li said at a roundtable event on Tuesday.

As of Tuesday morning, the options market implies an expectation of a rate cut in March and five total rate cuts in 2024, according to the CME FedWatch Tool.

"That is really aggressive. Something would have to go seriously wrong for that to come through," Li said.

Still, BlackRock does expect at least one rate cut in the second half of next year, Li said.

— Jesse Pound

Tue, Dec 5 2023 3:45 PM EST

NDR sets 2024 S&P 500 target at 4,900, says cyclical bull market will continue

Ned Davis Research set a 2024 S&P 500 target at 4,900, saying stocks will continue their march upward after the Federal Reserve achieves its soft landing.

"A soft landing should permit the cyclical bull market to continue," the firm's chief U.S. strategist Ed Clissold wrote in Wednesday note. "Our year-end S&P 500 target is 4900, about 7% above current levels."

Other Wall Street strategist have trotted out their 2024 year-end targets. Bank of America's Savita Subramanian expects the broader index will end 2024 at 5,000, while Goldman Sachs sees a rise to 4,700.

Clissold anticipates a volatile first half followed by a better second half as investors move past recession fears, at which point he expects cyclicals and small-caps could get a boost.

— Sarah Min

Tue, Dec 5 2023 3:39 PM EST

Apple advance restricts losses for Dow

A gain in shares of Apple helped pare losses for the Dow in Tuesday's session, underscoring the climb in technology names.

The blue-chip average slipped about 0.2%, dragged on by slides of more than 2% in Goldman Sachs and 3% in Procter & Gamble. But a jump of nearly 2% in Apple — the best performer in the Dow — helped mitigate losses for the 30-stock index.

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Apple, 1-day chart

The move comes as technology as a whole has outperformed on Tuesday. In fact, the tech-heavy Nasdaq Composite is the sole major index poised for gains, as of 3:30 p.m. ET.

In a similar vein, information technology and communication services — which are both known for their exposure to tech — were two of just three sectors of the 11 in the S&P 500 on track to end the session higher. (Consumer discretionary was the other sector slated to close positively.)

Beyond Apple, the Dow was buoyed by advances of more than 1% in Verizon and Merck.

— Alex Harring

Tue, Dec 5 2023 3:30 PM EST

BMO launches new quadruple levered product for S&P 500

Retail investors have access to a new highly leveraged way to bet on the S&P 500.

Bank of Montreal's Max SPX 500 4x leveraged ETNs began trading on Tuesday under the ticker "XXXX." The ETN is the highest leveraged exchange traded product in the U.S., according to CFRA.

The ETN comes with several risks, including its design for short-term trading, potential for large and rapid losses, and the credit risk inherit in an exchange traded note structure.

The ETN has seen about 47,000 notes traded so far today, according to FactSet.

— Jesse Pound

Tue, Dec 5 2023 3:14 PM EST

Oil prices keep falling despite OPEC+ efforts to convince market on cuts

Oil prices fell again on Tuesday despite efforts by OPEC+ to convince traders that the production cuts agreed last week will come through.

The West Texas Intermediate contract for January fell 72 cents, or .99%, to settle at $72.32 a barrel, while the Brent crude contract for February fell 83 cents, or 1.06%, to settle at $77.20 a barrel.

Traders have been skeptical that the OPEC+ will deliver on promised supply cuts.

Russian Deputy Prime Minister Alexander Novak said OPEC+ was prepared to deepen supply cuts in the first quarter of 2024 if necessary, according to Russian news agency TASS.

Saudi Energy Minister Price Abdulaziz bin Salman told Bloomberg Monday that the group would deliver on the 2.2 million bpd of promised cuts and could extend them beyond the first quarter if necessary.

— Spencer Kimball

Tue, Dec 5 2023 3:02 PM EST

Stocks are little changed as final trading hour kicks off

The three major indexes hovered near their flatlines as the last hour of Tuesday's session commenced.

The Dow slipped 0.2%, while the S&P 500 sat just under the flatline shortly after 3 p.m. ET. The Nasdaq Composite was the outperformer with a gain of nearly 0.3%.

— Alex Harring

Tue, Dec 5 2023 2:55 PM EST

Quiet stores spell trouble for retail spending this holiday season, Goldman says

Holiday shoppers have been busy filling up virtual carts online, but Goldman Sachs' Spencer Hill doesn't think that activity will be strong enough to make up for the weakness at brick-and-mortar stores.

Hill cited Adobe data, which shows a 7.3% jump in online spending from Nov. 1-27 compared with the year-ago period, for his stance. While that sounds like solid growth, it's not enough to close the gap based on the declines seen in Fiserv credit card data and in the Redbook department store panel, according to Hill. He expects Census retail sales to show a 0.1% decline in both November and December, excluding auto, gas, and building materials.

Another headwind has been falling prices at the store. Promotions started earlier this holiday season, and have been particularly steep for apparel, he said.

—Christina Cheddar Berk

Tue, Dec 5 2023 2:42 PM EST

Keep a close eye on the quick decline of the 10-year Treasury yield, says strategist

The recent dramatic pullback in the 10-year Treasury yield should be as carefully looked at as it was during its rapid rise, according to Quincy Krosby, chief global strategist for LPL Financial.

Krosby believes that the fast decline in yields could be a sign that economic growth is "deteriorating" faster than desired.

"A faster pace downward should similarly be acknowledged by what it implies---that a growth scare has taken hold," said Krosby.

 "The characterization of the economy symbolizing the Fed's success at engineering a soft-landing has to be questioned in light of the most recent Q4  economic forecasts, with prospects now edging rapidly below 2%. This is blatantly a rapid detour from Q3's 5.2% GDP print," Krosby added.

— Hakyung Kim

Tue, Dec 5 2023 2:15 PM EST

Charter stock falls after CFO warns of weakness in internet

Shares of telecommunications giant Charter Communications dropped more than 7% on Tuesday after an executive warned of a surprisingly soft trend in internet demand.

CFO Jessica Fischer said at UBS Global TMT Conference said that "it's likely that we could end up with negative internet net adds inside of Q4," according to FactSet.

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Shares of Charter fell sharply on Tuesday.

While telecom companies have been struggling for years with customers cutting the cord for cable, internet has mostly remained a growth area.

Shares of Charter competitor Comcast were down more than 3%.

— Jesse Pound

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

Tue, Dec 5 2023 1:51 PM EST

Energy and materials stocks underperform

Energy and materials led sector losses on Tuesday. Both groups fell by around 1%, while the S&P 500 declined just 0.1%.

Sealed Air and Albemarle both fell by more than 5% and 6%, respectively, leading the materials sector's losses.

In the energy sector, Baker Hughes and Halliburton were both down by more than 2%, making them the biggest decliners in the sector.

— Hakyung Kim

Tue, Dec 5 2023 1:30 PM EST

Alaska Air Group rebounds following selloff

Alaska Air Group climbed more than 4% in Tuesday's session, regaining some ground after Monday's selloff.

Shares rose 4.1% in Tuesday's session. The stock tumbled 14.22% on Monday, marking its worst day since March 18, 2020, when shares dropped 22.75%.

Investors sold the stock following the airline's announcement that it would buy rival Hawaiian Airlines in a $1.9 billion deal.

Alaska was the one of just two stocks in the Dow Jones Transportation Average trading higher on Tuesday.

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Alaska Air Group over the last two sessions

— Alex Harring

Tue, Dec 5 2023 1:02 PM EST

Stocks making the biggest moves midday

These are some of the companies making headlines in midday trading:

  • Apple — The iPhone maker's shares added 2% in midday trading after SensorTower data showed App store revenue jumped 11% quarter-to-date for the fiscal first quarter of 2024, according to a note from Bank of America. The firm also noted an 8% increase in App store revenue in China.
  • Nio — The Chinese automaker climbed about 3% after reporting a smaller-than-expected loss in the third quarter. Losses came in at 2.67 yuan per share, compared to the 2.91 yuan loss expected by analysts, according to LSEG. Nio has taken steps to bring down costs recently, including a 10% cut to its workforce last month.
  • CVS Health — Shares gained 4% after CVS said it would overhaul the way it prices prescription drugs. The pharmacy chain also issued higher-than-expected revenue guidance in 2024. The company now expects revenue of at least $366 billion, while analysts polled by FactSet forecast $344.5 billion. CVS also plans to raise its quarterly dividend by nearly 10%.

Read the full list here.

— Brian Evans

Tue, Dec 5 2023 12:51 PM EST

December is seasonally the strongest month of the year, Bank of America says

If history is any guide, don't be surprised if December proves to be one of the strongest months of 2023, according to Bank of America.

Since 1936, the broad-based index has posted positive returns 78% of the time in December, gaining 2.2% on average.

Even during years with a strong November, the index rose two thirds of the time, gaining 1.1% on average and slightly more than the average month. The Wall Street firm also sees a positive setup for the new year.

"The S&P 500 is right near our 2023 year-end target of 4600, and we still see more tailwinds than headwinds into 2024 and target 5000 by year-end 2024," wrote Savita Subramanian, head of U.S. equity and quantitative strategy.

— Samantha Subin

Tue, Dec 5 2023 12:10 PM EST

Cigna agrees to cover Eli Lilly's obesity drug as Zepbound arrives at pharmacies

Eli Lilly said its recently approved Zepbound obesity drug is available at U.S. pharmacies. The drug has already been added to coverage by Express Scripts and Cigna Health. Starting on Dec. 15, covered patients will pay $25 a month for a one- or three-month supply. Other patients who have commercial health insurance may be eligible to pay $550 per month, Lilly said.

"Express Scripts' and Cigna's expansion of access to Zepbound are likely just the first dominos to fall in the US for weight loss indication coverage. Both the $25/month and $550/month options listed above represent 50%-or-greater discounts to the list price and may drive further therapeutics uptake," Stifel said in a research note.

Right now, demand for these drugs is greater than either company can satisfy. Given this situation, both companies will likely sell as much of these drugs as they can produce. Still, Zepbound offers a very compelling combination for consumers with obesity: clinical trials showed superior weight loss and its list price is lower than Novo Nordisk's Wegovy.

While both drug companies have seen enormous gains in 2023, shares of Lilly and Novo were weaker in trading Tuesday morning.

—Christina Cheddar Berk

Tue, Dec 5 2023 11:42 AM EST

Nio pops after EV maker reports shrinking losses

Nio climbed more than 4% as investors cheered narrowing losses for the electric vehicle maker during the third quarter.

The Chinese company posted a loss of 2.67 yuan per share, smaller than the 2.91-yuan drop expected by analysts surveyed by LSEG. It also marked a decrease from the second-quarter loss of 3.7 yuan per share.

That overshadowed revenue, which came in below analysts' consensus forecast in the third quarter. Guidance on the key financial measure was also soft.

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Nio, 1-day chart

— Alex Harring, Arjun Kharpal

Tue, Dec 5 2023 11:10 AM EST

Nasdaq outperforms in morning trading

The technology-heavy Nasdaq Composite outperformed in morning trading, marking a reversal from Monday.

The index rose 0.6%. By comparison, the broad S&P 500 was hovering near flat and the blue-chip Dow slipped 0.2%.

That's a turn from Monday's session, when the Nasdaq posted the biggest loss of the three indexes.

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The Nasdaq Composite on Tuesday

— Alex Harring

Tue, Dec 5 2023 10:39 AM EST

Small caps pull back after Monday gains

The Russell 2000 declined 1% on Tuesday, reversing course after posting notable gains in the prior session.

The small cap index was a notable outperformer on Monday, when it advanced 1% despite losses across the broader market.

Year to date, the Russell 2000 is up by more than 5%, reversing a slide into negative territory in early October. Still, it is underperforming the broader market.

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Russell 2000 on Tuesday

— Hakyung Kim

Tue, Dec 5 2023 10:10 AM EST

Job openings fall to lowest level since March 2021

October job openings slid to the lowest level since 2021, according to Labor Department data released Tuesday.

The Job Openings and Labor Turnover Survey showed 8.7 million roles in October, below economists' consensus forecast of 9.4 million, according to Dow Jones. It also marked the fewest openings since March 2021.

That data is welcome news for investors hoping for evidence that prior interest rate hikes have had the Federal Reserve's intended impact on the economy. Stocks took a leg up following the data, but the Dow still remained more than 100 points down.

— Alex Harring, Jeff Cox

Tue, Dec 5 2023 9:32 AM EST

Stocks open lower

The three major indexes kicked off Tuesday's session down.

The Dow and S&P 500 traded about 0.2% and 0.3% lower, respectively, shortly after 9:30 a.m. ET. The Nasdaq Composite slid about 0.4%.

Tuesday's open follows a losing session on Monday for the three major averages.

— Alex Harring

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