Stocks claw back losses after selloff, tech leads indices higher

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Stocks extended gains Thursday afternoon after the three major indices endured a deep rout a day earlier. Investors digested a record surge in third-quarter GDP after a historic slump earlier this year, and another weekly report on jobless claims that came in better-than-expected. A slew of corporate earnings results also loom.

[Click here to read what’s moving markets heading into Friday, Oct. 30]

The S&P 500 Dow each rose sharply around 2:30 p.m. ET, with the former adding more than 2% as tech shares advanced. The Dow gained more than 340 points, or 1.3%, after closing lower by 943 points, or 3.4%, on Wednesday for its worst single-session drop since June.

The Nasdaq outperformed on Thursday to claw back losses from Wednesday, when tech shares had fallen after U.S. senators grilled the CEOs of Facebook (FB), Twitter (TWTR) and Alphabet (GOOG, GOOGL) over the companies’ content moderation practices in a hearing. Each of these companies, along with peer Big Tech companies Amazon (AMZN) and Apple (AAPL), are set to report quarterly results after market close on Thursday.

Traders globally adopted a risk-off mood this week, with an escalation of restrictions in Europe to try and curb a rise in coronavirus cases driving volatility higher. The CBOE Volatility Index (^VIX) spiked to above 40 during Wednesday’s session for the highest level in more than four months, and it held around 39 Thursday morning.

Both France and Germany announced renewed lockdowns spanning for about the next month, though the restrictions stopped short of the draconian measures announced earlier on during the pandemic in the spring. In the U.S., the rolling seven-day average of daily new virus cases rose to a record 70,000 as of Tuesday, according to data compiled by the Washington Post. And on the vaccine front, Dr. Anthony Fauci, the nation’s top infectious-disease expert, said he believed it would take until at least January for the U.S. Food and Drug Administration to authorize a COVID-19 inoculation.

Some analysts, however, considered the most recent pull-back an inevitable moment for stock prices to come back down to earth, given the strong rally earlier on over the summer as stay-in-place orders first eased.

“Markets have been baking in a lot of optimism: that the pandemic was under control, that the economy was healing, and that things would be back to something approaching normal in 2021 (and maybe not in late 2021, but earlier),” Brad McMillan, chief investment officer for Commonwealth Financial Network, said in a note Wednesday. “Those assumptions were always optimistic, though, and what we are seeing now is a reality-based repricing. As such, this drop is both necessary and healthy. Markets should reflect the most likely future path, not the most optimistic, and that is where we are headed.”

4:02 p.m. ET: Stocks rise to recover losses after Wednesday’s selloff, Nasdaq jumps 1.6% as tech shares outperform

Here were the main moves in markets as of 4:02 p.m. ET:

  • S&P 500 (^GSPC): +39.12 (+1.20%) to 3,310.15

  • Dow (^DJI): +139.49 (+0.53%) to 26,659.44

  • Nasdaq (^IXIC): +180.72 (+1.64%) to 11,185.59

  • Crude (CL=F): -$1.00 (-2.67%) to $36.39 a barrel

  • Gold (GC=F): -$8.10 (-0.43%) to $1,871.10 per ounce

  • 10-year Treasury (^TNX): +5.4 bps to yield 0.8350%

2:38 p.m. ET: Stocks extend gains further, S&P 500 adds 2%

Here’s where the three major indices were trading as of 2:38 p.m. ET:

  • S&P 500 (^GSPC): +12.35 points (+0.38%) to 3,283.38

  • Dow (^DJI): -18.29 points (-0.07%) to 26,501.66

  • Nasdaq (^IXIC): +81.28 (+0.77%) to 11,093.89

1:23 p.m. ET: Stocks hold higher, Nasdaq advances by more than 1.5%

The three major indices held higher in intraday trading on Thursday, led by tech stocks ahead of their earnings results after market close. The Nasdaq gained more than 1.5%.

The Dow added 0.3%, or 73 points, with component Apple climbing nearly 4% intraday. The S&P 500 rose nearly 1%, or 32 points, as the communications services and information technology sectors each outperformed.

10:05 a.m. ET: Pending home sales unexpectedly fell in September

Pending home sales unexpectedly turned lower in September following four straight monthly gains, according to the National Association of Realtors’ monthly report Thursday. The Northeast was the only major region to post a month-on-month rise in pending sales.

“The demand for home buying remains super strong, even with a slight monthly pullback in September, and we’re still likely to end the year with more homes sold overall in 2020 than in 2019,” Lawrence Yun, NAR’s chief economist, said in a statement. “With persistent low mortgage rates and some degree of a continuing jobs recovery, more contract signings are expected in the near future.”

9:35 a.m. ET: Stocks open mixed steadying after Wednesday’s drop

Here were the main moves in markets, as of 9:35 a.m. ET:

  • S&P 500 (^GSPC): +12.35 points (+0.38%) to 3,283.38

  • Dow (^DJI): -18.29 points (-0.07%) to 26,501.66

  • Nasdaq (^IXIC): +81.28 (+0.77%) to 11,093.89

  • Crude (CL=F): -$5.8 (-2.17%) to $35.22 a barrel

  • Gold (GC=F): -$14.30 (-0.76%) to $1,864.90 per ounce

  • 10-year Treasury (^TNX): -0.2 bps to yield 0.779%

8:35 a.m. ET: 3Q GDP, jobless claims top expectations

Government data newly out Thursday showed third-quarter economic activity rose at a record pace, after a record drop in the second quarter. New jobless claims also improved more than expected last week.

  • Third-quarter GDP increased at a record 33.1% annualized rate, following a drop of 31.4% in the second quarter. The rise was driven by a more than 40% jump in personal consumption, as consumer spending picked back up following stay-in-place orders. Still, the level of overall output in the U.S. economy remained below pre-pandemic levels.

  • New weekly jobless claims came in at 751,000 for the week ended Oct. 24, or better than the 770,000 expected. During the prior week, new claims were at an upwardly revised 791,000. Continuing jobless claims were also better than expected at 7.756 million versus the 7.775 million anticipated and previous week’s upwardly revised 8.465 million.

8:08 a.m. ET: Kellogg results top expectations, company raises guidance again

Kellogg posted third-quarter results that surpassed estimates, with adjusted earnings per share of 91 cents on reported net sales of $3.43 billion better than the 86 cents on revenue of $3.4 billion anticipated.

The company raised its full-year guidance again Thursday morning and said it expects organic net sales growth to come in at 6% this year, or a full percentage point ahead of previous guidance. The company is also now expected to grow operating profit by 2% over last year, versus previous guidance for a decline of 1%.

“As the COVID-19 pandemic continued throughout the third quarter, demand for packaged foods for at-home consumption remained elevated, albeit moderating from the previous quarter,” Kellogg said in its statement Thursday morning. “This again drove higher sales of the company’s products in retail channels which along with strong growth in emerging markets, more than offset a decline in foods sold in away-from-home channels.”

Net sales increased in each of the Asia Pacific, Middle East and Africa (AMEA) and Europe, while declining in Latin America during the quarter. North American net sales were roughly flat for the third quarter, though organic sales grew for cereal, snacks and frozen foods.

7:42 a.m. ET: Kraft Heinz’s raises guidance, posts estimates-topping 3Q results as at-home dining fuels surge in demand

Kraft Heinz (KHC) posted faster-than-anticipated organic revenue growth in the third quarter and profit that beat expectations, driven by an ongoing trend toward at-home dining during the pandemic.

Organic revenue grew 6.3% in the third quarter after dropping by more than 1% in the same period last year. Consensus analysts were looking for a rise of 4.7%, according to Bloomberg data.

Adjusted earnings came in at 70 cents a share on net sales of $6.44 billion, with the top-line rising 6%. Both metrics were better than expected, as analysts were looking for earnings of 62 cents a share on revenue of $6.33 billion. The biggest sales jump came in the U.S. – the company’s largest market by far – where net sales increased by 7.4%. International sales increased by 3.9%.

Kraft Heinz also raised its full-year outlook and sees mid-single-digit 2020 organic net sales growth and high-single digit 2020 adjusted EBITDA growth.

7:31 a.m. ET: Comcast posts 3Q results that handily top estimates as company adds record high-speed internet customers

Comcast (CMCSA) posted third-quarter results that blew past estimates, driven by a pickup in high-speed internet customers. These grew by a record 633,000 during the quarter for a 67% increase over last year, with the figure coming in well above the 527,450 expected, according to Bloomberg data.

Third-quarter adjusted earnings of 65 cents per share on revenue of $25.53 billion were each better than the 51 cents a share on revenue of $24.73 billion anticipated. The top-line figure represented a drop of nearly 5% over last year.

Streaming was also strong for Comcast, with its new service Peacock seeing 22 million sign-ups in the third quarter, versus the 10 million it saw at the end of June. Comcast had said in January that it expected Peacock would reach as many as 35 million consumers and break even by 2024.

Theme parks were the weak point for Comcast this quarter. As with Disney, amusement park closures and attendance caps on opened parks has curbed revenue, and the division saw sales slump 81% during the third quarter. Films also suffered from a delay of movie releases, and Comcast’s filmed entertainment business unit saw sales drop 25%.

7:23 a.m. ET Thursday: Stock futures hold onto overnight gains

Here were the main moves in markets, as of 7:23 a.m. ET:

  • S&P 500 futures (ES=F): 3,281.00, up 17.50 points or 0.54%

  • Dow futures (YM=F): 26,517.00, up 108 points or 0.41%

  • Nasdaq futures (NQ=F): 11,234.00, up 101.25 points or 0.91%

  • Crude (CL=F): -$1.20 (-3.21%) to $36.19 a barrel

  • Gold (GC=F): -$0.70 (-0.04%) to $1,878.50 per ounce

  • 10-year Treasury (^TNX): -0.3 bps to yield 0.778%

6:05 p.m. ET Wednesday: Stock futures open higher, steadying after selloff

Here were the main moves in markets, as of 6:05 p.m. ET:

  • S&P 500 futures (ES=F): 3,278.25, up 14.75 points or 0.45%

  • Dow futures (YM=F): 26,514.00, up 105 points or 0.4%

  • Nasdaq futures (NQ=F): 11,195.00, up 52.25 points or 0.47%

Traders wearing masks work, on the first day of in person trading since the closure during the outbreak of the coronavirus disease (COVID-19) on the floor at the New York Stock Exchange (NYSE) in New York, U.S., May 26, 2020. REUTERS/Brendan McDermid
Traders wearing masks work, on the first day of in person trading since the closure during the outbreak of the coronavirus disease (COVID-19) on the floor at the New York Stock Exchange (NYSE) in New York, U.S., May 26, 2020. REUTERS/Brendan McDermid

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