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Dow Closes More Than 200 Points Lower for Fourth Straight Day of Losses, Dragged Down by Disney: Live Updates

Dow Closes More Than 200 Points Lower for Fourth Straight Day of Losses, Dragged Down by Disney: Live Updates
CNBC

The Dow Jones Industrial Average and S&P 500 fell Thursday as Disney shares were under pressure and concerns around regional banks persisted.

The S&P 500 declined 0.17% to close at 4,130.62. The 30-stock Dow shed 221.82 points, or 0.66%, to end at 33,309.51. The Nasdaq Composite added 0.18%, ending the day at 12,328.51.

Disney shares fell more than 8% the day after the media giant released its fiscal second-quarter results. While higher prices helped Disney's streaming division narrow its losses, it dealt a harsh blow to subscriber growth. The company also announced it would take on impairment charges of $1.5 billion to $1.8 billion as it removes more content from its streaming platforms.

Investor worry over regional banks once again flared up. PacWest Bancorp, the latest troubled bank in focus, said Thursday in a regulatory filing that deposits fell 9.5% during the week of May 5. PacWest shares dropped 22% Thursday, and the bank said it had access to $15 billion in immediate liquidity, if needed.

"Investor focus is now on both the economic backdrop and liquidity and what's going on versus rates and inflation," said Dylan Kremer, co-chief investment officer of Certuity. "The PacWest [news] kind of falls into the fragile sentiment from either the regional banking crisis and then the debt ceiling overhang. It's a combination of the two."

The producer price index, a measurement of wholesale prices, increased just 0.2% on a monthly basis in April. Economists polled by Dow Jones estimated PPI advanced 0.3% last month. The PPI data follows the consumer price index report from Wednesday, which showed inflation rose 4.9% from a year ago, below expectations.

Initial jobless claims grew by 22,000 for the week ending May 6 to 264,000, the Department of Labor said on Thursday. The latest jobless data was the highest reading since Oct. 30, 2021.

 "Wall Street didn't get any surprises from both PPI and jobless claims.  Producer prices are expected to continue to decline as supply chain normalizes, while rising jobless claims provide further evidence that the labor market is easing," said Ed Moya, senior market analyst at Oanda.

Lea la cobertura del mercado de hoy en español aquí.

Dow falls to end Thursday

The Dow Jones Industrial Average fell 221.82 points, or 0.66%, to close at 33,309.51. Disney shares helped drag the index lower, sliding a day after the entertainment giant posted its latest quarterly results.

The S&P 500 dropped 0.17% to end at 4,130.62. The Nasdaq Composite was the outlier of the three, with a gain of 0.18%, to end at 12,328.51.

-Darla Mercado

Goldman estimates an annual $6 trillion in green spending ahead

Goldman Sachs says "green capex" will be "the dominant driver of global infrastructure over the next decade." The firm shared its ideas on how to play the trend.  

In a Tuesday note, Goldman said that it believes "an all-in approach across sectors is required, providing opportunities across the Green Capex supply chain to participate in achieving these goals. To stimulate additional investment we believe three C's will be required: Collaboration, Comprehensive focus and Corporate returns." 

The firm estimates $6 trillion of annual green capex through this decade, with an incremental average of $2.8 trillion per year to support net zero, infrastructure and clean water goals. 

CNBC Pro subscribers see which stocks Goldman sees benefiting from green capex here.

— Hakyung Kim

Alphabet shares trading near highest level since August

Alphabet shares popped nearly 5% on Thursday to trade near their highest level since August.

The bump in shares came after the search giant announced a slew of artificial intelligence features at its developer conference on Wednesday. Many on Wall Street lauded these new tools as a reassuring sign of the company's AI dominance.

Shares have gained more than 32% this year as investors bet on AI tailwinds and the technology sector.

— Samantha Subin

Disney headed for worst day since November

Disney shares tumbled about 9% on Thursday, putting them on track for their biggest one-day loss since Nov. 9. Back then, the media giant dropped 13%.

— Fred Imbert

Morgan Stanley raises its price target for three retailers ahead of earnings

Morgan Stanley took a look back across its coverage as earnings season draws down — and raised its price target for three retailers ahead of their results.

The Wall Street firm slightly hiked its price targets for AutoZone, Costco Wholesale and Target:

  • AutoZone raised to $2,835 from $2,800, implying 3.7% upside from Wednesday's close
  • Costco Wholesale raised to $535 from $520, implying 7% upside from Wednesday's close
  • Target raised to $170 from $165, implying 7% upside from Wednesday's close

Analyst Simeon Gutman maintained an equal-weight rating on Target, saying a weaker near-term outlook weighs on the stock, though it could get attractive if margins expand.

— Sarah Min

Goldman estimates an annual $6 trillion in green spending ahead

Goldman Sachs says "green capex" will be "the dominant driver of global infrastructure over the next decade." The firm shared its ideas on how to play the trend.  

In a Tuesday note, Goldman said that it believes "an all-in approach across sectors is required, providing opportunities across the Green Capex supply chain to participate in achieving these goals. To stimulate additional investment we believe three C's will be required: Collaboration, Comprehensive focus and Corporate returns." 

The firm estimates $6 trillion of annual green capex through this decade, with an incremental average of $2.8 trillion per year to support net zero, infrastructure and clean water goals. 

CNBC Pro subscribers see which stocks Goldman sees benefiting from green capex here.

— Hakyung Kim

Goldman Sachs adds Progressive shares to US1 list

Goldman Sachs says its taking advantage of the recent dip in Progressive shares and added the company to its US1 list of top buy-rated U.S. equities.

"We believe that a combination of superior execution and a more rational competitive environment will allow Progressive to deliver on both premium growth and margins, a challenging balance to manage," analyst Joshua Shanker wrote in a Thursday note.

Progressive, which reports its financial results monthly, will be posting its next earnings release on May 17.

Shares of the insurance company have lost almost 7% this quarter. Meanwhile, the stock is still up more than 2% year to date.

— Hakyung Kim

These transport stocks are a buy, JPMorgan says

The shipping slowdown may be nearing the bottom, and that means that the recent outperformance of industrial sector could continue, according to JPMorgan.

Analyst Brian Ossenbeck upgraded JB Hunt to overweight from neutral in a note to clients on Thursday.

"Spot truckload rate momentum just recently hit a floor for the cycle. This metric is the best leading indicator for early cycle transport stocks and we believe this critical inflection will hold as truckload capacity gradually starts to exit the market," Ossenbeck wrote.

Ossenbeck also upgraded Norfolk Southern, which is still grappling with the fallout from a train derailment in Ohio earlier this year.

"Norfolk still has a long way to go in order to restore the public trust but the stock is trading at a wide discount to CSX and the expected network fluidity improvement will come at a time when 2H23 volume comps are the easiest in the group," Ossenbeck wrote.

— Jesse Pound, Michael Bloom

Stocks making the biggest midday moves

Here are some of the names making the biggest moves during midday trading:

To see more stocks making moves during midday trading, read the full story here.

— Michelle Fox

Disney headed for worst day since November

Disney shares tumbled about 9% on Thursday, putting them on track for their biggest one-day loss since Nov. 9. Back then, the media giant dropped 13%.

— Fred Imbert

JPMorgan upgrades Axon Enterprise

JPMorgan upgraded Axon Enterprise to overweight from neutral, saying the Taser maker should be bought after its 15% drop on Wednesday. While Axon beat analysts' expectations on the top and bottom lines, it disappointed on total gross margins.

"The pullback we were waiting for came sooner than expected, driven by what we see as temporary headwinds ahead of a strong upgrade cycle across body cams (Axon 4) and Taser 10," analyst Paul Chung said in a Thursday note.

Axon shares popped 4% during midday trading.

— Sarah Min

S&P 500 broke year-over-year losing streak when looking at monthly returns

The S&P 500 was down every month compared with the same month a year ago 12 straight times. That losing streak ended in April — and that turn has historically indicated strong returns ahead.

In all 10 times the broad index had snapped a year-over-year loss streak of at least 12 months, the S&P 500 was higher a year after the month a streak was snapped, according to data from Todd Sohn, a technical strategist at Strategas. On average, the S&P 500 was up 12.6% when comparing the month the streak ended with the same one a year later.

The longest streak of year-over-year losses for the S&P 500 ended in July 2003 after 32 months.

— Alex Harring

Beyond Meat shares tumble nearly 13%

Shares of Beyond Meat sank 12.6% after the alternative meat manufacturer said late Wednesday it filed with the Securities and Exchange Commission to sell up to $200 million of its common stock. The company said it intends to use the proceeds for general corporate and working capital purposes.

The announcement came after Beyond Meat reported a first-quarter earnings-per-share loss after the bell Wednesday that was less than estimated, at 92 cents versus the $1.01 expected by analysts polled by Refinitiv. Revenue came in at $92.2 million, higher than the $90.8 million expected.

— Michelle Fox

Google's developers event reassures Wall Street's confidence in its AI potential

Artificial intelligence announcements coming out of Google's I/O event have helped boost analyst confidence in the company's AI positioning.

"AI is reshaping all of GOOGL's products faster than expected, as today should build investor confidence in business durability and AI upside to come," wrote Morgan Stanley analyst Brian Nowak.

Shares of parent Alphabet popped more than 5% on Thursday. Read more on what Wall Street is saying after the event here.

— Samantha Subin

Alcoa could be boosted by rising aluminum prices, Credit Suisse says

A rebound in aluminum prices could mean good news for Alcoa, Credit Suisse said.

Analyst Curt Woodworth upgraded the aluminum production stock to outperform from neutral and named it a top pick. His price target of $50 implies an upside of 38.4% from Wednesday's close.

CNBC Pro subscribers can click here to read the full story.

— Alex Harring

KBW says First Citizens can continue rallying

First Citizens BancShares, the regional bank known for acquiring Silicon Valley Bank's assets after its failure set off an industry crisis in March, could continue to rally, according to KBW.

Analyst Brady Gailey reiterated his outperform rating and increased his price target to $1,500 from $950. Gailey's new price target implies the stock could jump 27.6% over the next year from where it finished Wednesday's session. The stock has already more than doubled off March lows.

"After being unknown and under-owned to most of the institutional investor community for decades, we believe the more investors get to know the new FCNCA, the more they'll like what they see, which should be good for future valuation," he said in a note to clients Wednesday.

CNBC Pro subscribers can read the full story here.

— Alex Harring

Western Alliance says deposits have been growing

After PacWest disclosed that deposits declined last week, fellow regional bank Western Alliance announced that it is not dealing with the same issues.

Western Alliance said deposits have grown by $600 million since May 2, the day of its previous deposit update. The bank also said that 79% of its deposits were insured as of May 9.

Shares of Western Alliance were last up 1.3% after falling in early trading.

— Jesse Pound

Peloton shares slide following recall of 2.2 million bikes

Peloton shares fell nearly 6% after the company said it would be recalling some 2.2 million exercise bikes over safety concerns.

The Consumer Product Safety Commission said it had received 35 reports of the bike's seat post breaking and detaching from the unit during use and advised consumers to stop using the recalled bikes. There were 13 injury reports as well that included a fractured wrist and other issues.

For its part, Peloton is offering a free seat post can users can install themselves.

—Jeff Cox

Latest economic data allows Fed to pause, CIO says

Taken together, the consumer price index and producer price index data released this week should give the Federal Reserve the justification it needs to stop raising interest rates, said Chris Zaccarelli, chief investment officer at the Independent Advisor Alliance.

"For the second day in a row we have good inflation data – both the CPI and PPI continue to come down – which should give the Fed the room it needs to take a pause at the next meeting," he said.

The Fed implemented a quarter percentage point interest rate hike at its policy meeting last week, while signaling a potential end to hikes on the horizon. Its next policy meeting is scheduled for mid June.

Zaccarelli said that it's no surprise the market has performed well this year, in hindsight, given the strength of the economy and corporate profits.

"We do think investors are being too sanguine about the recession risk on the horizon," Zaccarelli said. "But given that we are in the calm before the storm, it is easy to see why so many people are buying stocks as everything looks clear for the moment."

— Alex Harring

Dow falls in early trading

The Dow was down more than 200 points to start the session, weighed down by Disney. The S&P 500 slid 0.4%, while the Nasdaq Composite pulled slightly.

— Fred Imbert

Alphabet shares gain after Google developer conference

Alphabet shares rose more than 4% a day after Google unveiled a host of new AI tools at its developer conference in Mountain View, California.

Google said Wednesday it's bringing AI to its poster search feature and will add capabilities to its online office suite. The company also said it's eliminating the wait list for its chatbot Bard and unveiled its next-generation large language model known as PaLM 2.

— Samantha Subin

Hindenburg doubles down on short-selling campaign against Carl Icahn

Notable short seller Hindenburg Research on Thursday doubled down on its short-selling campaign against Icahn Enterprises following Carl Icahn's conglomerate's quarterly report.

The Nathan Anderson-led firm claimed that Icahn Enterprises' financial report failed to address every red flag the short seller originally raised. Hindenburg took a short position against Icahn's company last week, alleging "inflated" asset valuations, among other reasons, for what it says is an unusually high net asset value premium in shares of the publicly traded holding company.

Icahn Enterprises reported a net loss of $270 million in the first quarter, with its hedge fund losing 4.1% during the period. It declared a $2 per share quarterly dividend.

The stock fell about 4% in premarket trading Thursday. Shares have fallen more than 30% since Hindenburg launched the campaign.

— Yun Li

Producer prices rise less than expected

The producer price index, a gauge of what wholesalers paid for raw goods, rose 0.2% month over month in April, the Labor Department said Thursday. That's less than the 0.3% advance economists polled by Dow Jones expected.

— Fred Imbert

Stocks making the biggest moves before the bell: PacWest, Disney and more

These are the stocks moving before the bell:

PacWest — Shares plunged 20% after the regional bank stock said deposits fell 9.5% for the week ended May 5. Other regional banks stocks moved lower on the news, with Western Alliance and First Horizon down 7.3% and 3.2%, respectively.

Disney — The media stock slumped more than 5%. Disney posted a decline in streaming subscribers even as losses for the business improved. The company also reported revenue and profit that was roughly in line with Wall Street's expectations.

Unity Software — Shares popped more than 9% after the video game software developer topped revenue expectations for the recent quarter and raised its full-year revenue outlook.

— Samantha Subin

PacWest stock slides after bank reveals more deposit outflows

Shares of PacWest fell more than 20% in premarket trading after the bank said in a securities filing that it suffered more deposit outflows last week.

For the week ended May 5, the bank's deposits declined 9.5%. The bank now has about $5.2 billion of uninsured deposits and $15 billion of available liquidity, the filing said.

Other regional bank stocks were also under pressure, with shares of Western Alliance falling more than 6%.

— Jesse Pound

Here's what Wall Street is saying about Disney's earnings report

Disney shares tumbled 5% in premarket trading as investors narrowed focused on weaker-than-expected streaming subscriber numbers.

Disney+ had 157.8 million subscribers for the fiscal second quarter, while analysts expected 163.17 million, according to StreetAccount. Also of note, the company said it would add Hulu content to Disney+ and said it would raise the price of the ad-free option later this year.

Analysts on Wall Street noted "cross currents" in the report, with strength in other areas of the business helping offset uninspiring trends in TV and streaming.

"Disney is in the early stages of restructuring its Media businesses, taking significant cost out and revisiting its content monetization strategy," wrote Morgan Stanley analyst Benjamin Swinburne in a note to clients. "Fortunately, it is buttressed by continued Parks strength which along with valuable brands and franchises can bridge it to this uncertain future."

CNBC Pro subscribers can read more about what Wall Street's top Disney analysts had to say.

— Alex Harring

Bank of England hikes rates by 25 basis points

The Bank of England raised interest rates by 25 basis points and noted it no longer sees a recession taking place in the U.K. The bank's policymaking committee voted 7-2 in favor of the increase.

— Elliot Smith

Europe stocks open higher

European stock markets were higher early Thursday following the key U.S. inflation print and with a Bank of England monetary policy decision coming at midday London time.

The benchmark Stoxx 600 index was up 0.5%, with France's CAC 40 up 0.7%, the U.K.'s FTSE 100 up 0.4% and Germany's DAX up 0.3%.

— Jenni Reid

Yellen says it should be 'unthinkable' for the U.S. to default on its debt

Treasury Secretary Janet Yellen said the idea of U.S. lawmakers letting the nation default on its debt should be "unthinkable."

Speaking to reporters ahead of the G-7 finance ministers and central bank governors meetings in Niigata, Japan, Yellen said she was aware of former President Donald Trump's suggestion for Republican lawmakers to let the nation to default.

"America should never default," she said. "Something that would so badly undermine the U.S. and global economy, I think it should be regarded by everyone as unthinkable."

When asked about steps the Biden administration could take in the wake of a default, Yellen emphasized that lawmakers must raise the debt ceiling.

"There is no good alternative that will save us from catastrophe. I don't want to get into ranking which bad alternative is better than others, but the only reasonable thing is to raise the debt ceiling and to avoid the dreadful consequences that will come," she told reporters.

– Jihye Lee

Japanese yen strengthens as dollar index slides after U.S. inflation report

The Japanese yen strengthened slightly to 134.14 against the greenback as the dollar index maintained lower levels after the U.S. consumer price index showed eased inflation overnight.

The dollar index inched lower in Asia's morning to 101.48. China's onshore yuan weakened marginally to 6.9389 against the greenback after its consumer and producer price index delivered a softer-than-expected reading.

South Korea's won weakened 0.24% against the greenback to 1,320.95. The Australian dollar weakened by 0.1% to 0.6671 against the U.S. dollar.

– Jihye Lee

Bank of Japan expects nation's 'pass-though' inflation to fall below 2% from Q3

The Bank of Japan's emphasized in its April meeting that the central bank should maintain its current ultra dovish monetary policy and take note of wage increases in its 2% inflation target.

In its summary of opinions released for the April 27 meeting, the BOJ was of the view that achievement of its 2% inflation target is coming into sight, but added that "it is appropriate that the Bank continue with monetary easing for the time being."

The BOJ noted that wages are now projected to rise more than expected in this year's negotiations, and that signs of a "virtuous cycle" between wages and prices have started to emerge in Japan's economy.

But, it is necessary for the central bank to continue to "firmly support the momentum for wage hikes through monetary easing, so that the nominal wage growth rate will rise sufficiently relative to prices," it said.

The BOJ estimates that the country's consumer price index is likely to be above 2% for the time being, due to a pass-through to consumer prices of past rises in import prices.

However, it is expected to fall below 2% from the third quarter of 2023, with the pass-through peaking out, it said.

— Lim Hui Jie

China's inflation rate marks the slowest pace in two years

China's consumer price index rose 0.1% in April year-on-year, the slowest since early 2021. Month-on-month, prices declined by 0.1%.

Economists surveyed by Reuters expected to see consumer prices rise 0.4% from a year ago and remain unchanged from the previous month.

April's reading comes after China's inflation rate eased to 0.7% in March after marking a recent peak of 2.8% in September.

The Chinese yuan weakened by 0.04% to 6.9428 against the U.S. dollar.

– Jihye Lee

Stocks making the biggest moves after the bell

Check out the companies making headlines in extended trading.

Disney — Shares fell more than 4% after the company reported mixed fiscal second quarter results. Earnings came in line with estimates, while revenue slightly beat analysts' estimates, according to Refinitiv data. While the company said its losses from its streaming segment narrowed, it shed 4 million Disney+ subscribers.

Beyond Meat — The alternative meat manufacturer's shares rose 2% after Beyond Meat posted better-than-expected results for the first quarter. Beyond Meat reported a loss of 92 cents per share and $92.2 million in revenue. Analysts had anticipated a loss of $1.01 per share on revenue of $90.8 million, according to Refinitiv.

The full list can be found here.

— Hakyung Kim

Robinhood announces revenue beat, launch of 24-hour trading

Shares of Robinhood were up about 1.7% in extended trading after the brokerage firm reported better-than-expected revenue for the fourth quarter.

Robinhood generated $441 million in revenue for the first quarter, above the $425 million predicted by analysts, according to Refinitiv. Monthly active users rose slightly since the fourth quarter to 11.8 million. However, its net loss grew to $511 million due in large part to a share-based-compensation charge.

The retail brokerage also said it will allow equity trading 24-hours per day, 5-days per week, beginning next week. The company said it will be the first U.S. brokerage to do so.

Robinhood already offers what it calls "hyper extended" trading hours, and CEO Vlad Tenev has previously said that the company's goal is to one day offer 24/7 trading.

— Jesse Pound

Stock futures open flat Wednesday

U.S. stock futures opened little-changed Wednesday night.

Dow Jones Industrial Average futures fell by 16 points, or 0.05%. S&P 500 futures ticked up 0.01%, while Nasdaq  100 futures dipped 0.02%.

— Hakyung Kim

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