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Dow closes lower on Thursday and snaps 4-day win streak as November rally takes a break: Live updates

Traders work on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., November 16, 2023.
Brendan Mcdermid | Reuters

The Dow Jones Industrial Average closed lower Thursday, as investors took a break from the rally seen this month.

The 30-stock Dow slipped 45.74 points, or 0.13%, to close at 34,945.47 and snap a four-day run of gains. The S&P 500 ticked higher by 0.12% and ended the session at 4,508.24. The Nasdaq Composite inched up by 0.07%, closing at 14,113.67.

Cisco Systems shed nearly 10% a day after the networking hardware maker offered weak guidance for the current quarter and full fiscal year. Walmart slid 8% after the world's largest retailer issued a lower-than-expected forecast for the year. Both stocks were the biggest decliners in the Dow.

Shares of Chevron also slipped 1.6% as U.S. crude oil prices fell about 5%.

Even as November's rally paused, stocks are well on their way toward winning weeks, with the three indexes up roughly 2% each for the period. Two inflation reports had a hand in lifting stocks earlier this week.

October's producer price index, a gauge of wholesale prices, slid 0.5%. That marked its biggest monthly decline since April 2020. Meanwhile, the consumer price index held flat in October, another positive sign for investors hoping the Federal Reserve may be satisfied with the cooling inflation trend.

"Economic data so far is confirming that for now we're in this gentle deceleration, back towards less inflation without evidence of a severe contraction," said Tom Hainlin, senior investment strategist at U.S. Bank Wealth Management. "It's like this Goldilocks scenario of inflation decelerating, but not too rapidly."

The major averages are on pace for sizeable gains this month. The S&P 500 is up more than 7%, while the Dow has advanced 5.7%. The Nasdaq is up 9.8%.

Dow closes lower

The Dow Jones Industrial Average closed lower on Thursday, although all three major indices notched weekly gains.

The 30-stock index slid 46 points, or 0.13%, to close at 34,945.57. The S&P 500 added 0.12% to finish the session at 4,508.24, while the Nasdaq Composite climbed 0.07% to 14,113.67.

— Lisa Kailai Han

5 key investment strategies for 2024, according to UBS

Investors are now entering "'a new world'...defined by economic uncertainty and geopolitical instability, but also profound technological change," according to UBS.

The bank expects global growth and U.S. consumption to both decline in the coming year.

With this in mind, the bank recommended several key strategies for investors to position for 2024:

  1. Manage liquidity as lower interest rates and yields reduce the returns of cash.
  2. Buy quality in both stocks and bonds, which should be best positioned to generate earnings despite weaker growth.
  3. Trade the range in currencies and commodities. "We expect the US dollar to remain around current levels in the months ahead but weaken as US growth slows, so we like strategies that sell dollar upside risk," wrote Solita Marcelli, chief investment officer of the Americas for the bank's global wealth management division.
  4. Hedge market risks against a backdrop of increasing geopolitical uncertainty.
  5. Diversity with alternative credit, including credit arbitrage and distressed debt.

— Lisa Kailai Han, Michael Bloom

U.S.-China relations will still be defined by 'competitive confrontation,' analysts say after Biden-Xi meeting

Wednesday's high-stakes Biden-Xi meeting left analysts with slight reassurance that both countries are keen on establishing a line of communicationbut also maintained the belief that U.S.-China relations will remain competitive.

"We think the meeting shows the intention from both sides to restore bilateral relations. This could help reduce near-term risk of escalatory confrontation," Morgan Stanley analyst Robin Xing wrote in a Thursday note. "But 'competitive confrontation' will likely remain for now, which does not mean a complete decoupling, but instead continued tech competition and de-risking away from China."

This also indicates a continued reduction in direct foreign investment and technology spillover to China, Xing said, which could weigh on China's long-term growth outlook. Moving forward, the analyst believes that further stimulus and reforms in China are needed to help stabilize market confidence in the country.

"As China risks tripping into a debt-deflation loop, we think more growth opportunities are needed to retain foreign investors, together with efforts to diversify the supply chain and strengthen its economic relations with other key trading partners," Xing said.

According to Piper Sandler analyst Andy Laperriere, the economic and geopolitical relationships between the U.S. and China will remain locked in competition. Both countries are in a "cold war," he said, expecting the U.S. to maintain its tariffs on Chinese imports and further tighten restrictions on what China can buy and how U.S. businesses can invest in China.

— Pia Singh

Softer inflation data doesn't mean good news just yet for markets, says BTIG

November's red-hot stock rally means that some investors believe that the Federal Reserve could pull off a soft landing. But BTIG analyst Jonathan Krinsky isn't as quick to jump to the conclusion.

"Bulls will cite the inflation data and resilience of cap-weighted indices as signs that a 'soft-landing' is here. Bears will cite slowing macro data, company-specific commentary, and persistent weakness of the average stock as signs that a 'hard landing' is on the horizon," the analyst wrote. "We continue to find ourselves in the latter camp, and today's data and price action are certainly not doing much to dissuade us from that view."

Historical track records also show a similar pattern of rallies prior to a recession, Krinsky noted.

"If we look at all recessions ex-Covid over the last 50 years ('07, '01, '90, '80-'82, and '74), the common trait was there was a period where rates were falling and stocks were rallying. Ultimately as the reality of the recession set in, stocks began to fall," he said.

The analyst added that the biggest tell for a recession will be any sign of "meaningful weakness" from mega-cap tech stocks, combined with lower rates.

— Lisa Kailai Han

U.S. crude oil dives as supply rises amid demand worries

The price of U.S. crude oil fell 5% on Thursday, as inventories rose while slowing industrial activity raised concerns about softening demadn.

The West Texas Intermediate December contract fell $3.76, or 4.9%, to settle at $72.90 a barrel, while the Brent January contract tumbled $3.81, or 4.69%, to $77.37 a barrel. U.S. crude and the global benchmark were both trading at their lowest level since early July.

U.S. crude inventory rose by 3.6 million barrels this week, while the Federal Reserve reported that industrial production and manufacturing declined in October.

-- Spencer KImball

Investors might be too optimistic on softer-than-expected inflation data, Wolfe Research warns

This week's softer-than-expected inflation data has boosted the stock market's ongoing November rally. But investors may be getting too far ahead of themselves, said Wolfe Research's Chris Senyek.

"Over the past six weeks, stock investors have generally treated 'bad news' as 'good news' into a growing belief that the Fed will kick off a prolonged cutting cycle in the first half of next year as inflation continues to decline and the employment picture weakens — even though neither FOMC forecasts nor market consensus anticipate a recession hitting next year," the analyst wrote in a note.

He added: "We continue to believe that consensus is underestimating the lagged impact of past rate hikes and the likelihood for Powell & Co. to be 'higher for longer.'"

— Lisa Kailai Han

Real estate leads S&P 500's gains this week

Real estate is by far and large the winning S&P 500 sector this week, up 5%.

The broader index as a whole is poised to close the week at more than 1.8% higher.

Extra Space Storage has led the sector higher, rallying more than 11% this week. Crown Castle, Alexandria Real Estate Equities, American Tower and SBA Communication are all up more than 8% week to date.

Only two stocks within the sector are due to end the week in the red: Mid-America Apartment Communities and Camden Property Trust.

— Lisa Kailai Han

Energy stocks underperform this week

Energy stocks in the S&P 500 have lagged this week, bucking the broader market's ascent.

The S&P 500 sector is on pace to end the week about 2% lower, making it the only of the 11 sectors on track for losses. Meanwhile, the index as a whole is poised to close the week 1.8% higher.

Diamondback Energy has led the sector lower with a drop of nearly 5%. ConocoPhillips, Halliburton and Baker Hughes are also among the worst performers this week, sliding more than 4% each.

Some energy stocks in the S&P 500 have been able to sidestep the downturn. Kinder Morgan is slated to finish the week 1.6% higher, while EQT and Oneok are both tracking for gains of around 1%.

— Alex Harring

Deflation could be coming in weeks and months ahead, says Walmart CEO

Shoppers might get the gift of "deflation" this holiday season, according to Walmart CEO Doug McMillon.

The executive said on the company's earnings call Thursday that deflation could be coming as general merchandise and key grocery items, such as eggs, chicken and seafood get cheaper. Walmart expects some of the higher prices, in pantry staples, for example, to begin to "deflate in the coming weeks and months."

Referring to the potentially lower prices, McMillon said, "while that would put more unit pressure on us, we welcome it, because it's better for our customers."

Consumers are still facing a series of headwinds, including inflation, higher interest rates and ongoing global tensions, making the everyday shopper wary of their spending. Former Walmart U.S. CEO Bill Simon had warned of a consumer spending pullback in October.

— Pia Singh, Melissa Repko

Amazon announces move into car sales, Carmax and Carvana drop

Amazon announced Thursday that it will allow auto deals to sell cars through its site starting next year. Hyundai will be the first automaker to join.

Customers will be able to search for and purchase cars online, and then either pick up their vehicle or have it delivered by the local dealership.

The news appeared to push down shares of major car dealers. Shares of Carmax fell more than 6%, while Carvana dropped over 8%.

— Jesse Pound

Stocks making the biggest moves midday

Check out the companies making headlines in midday trading.

  • Sonos — The stock climbed 17% after Sonos CEO Patrick Spence said the company is entering a multiyear product cycle that will include an entry "into a new multi-billion dollar category" in the second half of fiscal 2024.
  • Macy's — Shares of the department store chain popped more than 6% on the back of better-than-expected quarterly results. Macy's also said margins and inventory levels improved during the third quarter.
  • General Motors — General Motors shares dipped more than 1% in midday trading. The move comes after union workers on Thursday said it ratified a record deal with the United Auto Workers.

Read the full list here.

— Sarah Min

Fed Governor Cook sees soft landing as likely but not assured

Federal Reserve Governor Lisa Cook said Thursday she thinks the U.S. can avoid a deep recession but is attentive to risks that could thwart that goal.

"I believe that a soft landing is possible, with continued disinflation and a strong labor market, but it is not assured," she said in prepared remarks for a speech in San Francisco.

Specifically, she noted the burden that higher interest rates are posing on small businesses, housing and lower-income households, noting that three groups "could be warning of broader stress ahead."

—Jeff Cox

U.S. crude price falls 5% as supply grows amid demand worries

U.S. crude fell 5% on Thursday as inventories rose while industrial production fell.

The West Texas Intermediate December contract fell $3.84, or 5.01%, to $72.82 a barrel while the Brent January contract tumbled $3.91, or 4.82%, to $77.27 a barrel. U.S. crude and the global benchmark were both trading at their lowest level since early July.

U.S. crude inventories rose by 3.6 million barrels last week while production held steady at a record 13.2 million barrels per day, according to data released by the Energy Information Agency Wednesday.

And U.S. industrial production fell by 0.6% in October as the United Auto Workers strike impacted motor vehicle output, according to data released by the Federal Reserve on Thursday.

— Spencer Kimball

Small caps may finally be having their moment in the sun, says Wolfe Research

Wolfe Research thinks that the outlook is promising for small-cap stocks.

"Over the past few months, the levels of small cap underperformance has been staggering," wrote analyst Rob Ginsberg, pointing to the asset class's 22-year lows versus the S&P 500.

But after this week, the analyst expects a turning point.

"Timing these things is a futile effort, and Small Caps have continued to plunge to new relative lows, but if this rally is for real and the bottom is in, its tough to see outperformance not finally coming with it," he wrote. "While the likes of the S&P and NASDAQ have seen rallies of their own, we are much more inclined to buy into Small Caps at this point, which have a much longer runway for upside in our view, rather than chase the likes of overbought large cap names."

— Lisa Kailai Han

Stock market rally could boost equities into year-end, says Meera Pandit

The ongoing market rally could boost stocks into year-end, according to Meera Pandit, global market strategist at JPMorgan Asset Management.

Good economic news throughout the fall was responsible for pushing yields up and stocks down, the strategist said. A dramatic slowdown, combined with negative economic data, would hurt stocks and bonds going forward.

"So right now [we're] in the Goldilocks scenario, where we're kind of right down the middle with more moderate news that's really supporting the market and could support the market into year-end," Pandit told CNBC's "Squawk Box" on Thursday morning.

She added that she does not expect to see a slowdown in U.S. consumers until the jobs market noticeably weakens.

— Lisa Kailai Han

Bank of America downgrades Palo Alto following weak billings guidance

The risk of further pressure to Palo Alto Networks' billings and free cash flow has pushed Bank of America to the sidelines.

Analyst Tal Liani downgraded the technology stock to neutral from buy and slashed his price target by $25 to $265. His new target implies an upside of just 3.4% over where the stock finished Wednesday.

"The high bar of expectations suggests risk of further deterioration to billings, in our view, but also a possible negative impact on FCF and challenges to hit the long-term growth targets," Liani told clients on Thursday.

The downgrade comes a day after the company offered weaker-than-expected billings guidance. Still, CEO Nikesh Arora said on CNBC that demand remained strong.

Shares dropped nearly 7% in Thursday's session as investors parsed the guidance and quarterly report.

— Alex Harring

Individual investor bullishness inches up to 3-month high, rising for second week

Individual investor enthusiasm for stocks inched higher in the latest week, reaching the highest since early August, after an explosive rebound in the prior survey, according to the latest reading from the American Association of Individual Investors.

Bullishness toward stocks over the next six months rose to 43.8% from 42.6% last week and just 24.3% two weeks ago. But bearishness also expanded a touch, to 28.1% from 27.2% last week, (albeit far below the 50.3% that prevailed two week ago). Investors' neutral opinion on the outlook for stocks narrowed to 28.1% from 30.2%.

Bullishness stands above the historic average of 37.5%, while bearishness and neutral sentiment are below the historic averages, at 31.0% and 31.5%, respectively.

Rising bullishness and shrinking bearishness can raise red flags for contrarian investors who believe that greater enthusiasm can mean the bulk of buying is behind the market and cash reserves have fallen.

— Scott Schnipper

GM union workers ratify UAW deal following contentious vote

The United Auto Workers' record deal with General Motors has been ratified by a majority of workers, according to voting results posted Thursday morning by the union.

According to the UAW's vote tracker, the deal was supported by roughly 54% of the more than 34,700 autoworkers at GM who voted. Results from two smaller GM facilities representing about 1,400 workers, are still outstanding, but cannot offset the roughly 2,500-vote margin.

GM shares were lower by more than 1% midday.

— Michael Wayland, Tanaya Macheel

Utilities rise amid dropping yields, energy sector struggles

The S&P 500 utilities sector was far and away the best performer Thursday, rising about 1% as Treasury yields fell broadly. Duke Energy, Southern Co. and NRG Energy rose more than 1% each to lead utilities higher.

Energy, however, struggled, losing 2% as oil prices dropped sharply. APA fell 4.4%, while Baker Hughes and Halliburton dipped 3% to lead the decline.

— Fred Imbert

Luxury stocks fall broadly on disappointing Burberry results

U.S.-traded shares of major European luxury companies fell Thursday during premarket trading, following Burberry's worse-than-expected quarterly results.

The British fashion retailer reported that comparable store sales growth slowed 18% from the previous quarter due to slowing momentum in China. The company also warned that it is unlikely to reach its previously-stated revenue guidance if weaker demand globally persists.

Burberry's U.S.-listed shares declined 9.3% Thursday morning. The dismal results also brought down other luxury companies. U.S.-traded shares of LVMH and Kering fell 1.7% and 1.8%, respectively. Burberry and Kering are now down 22.1% and 17.9% year to date, respectively. LVMH remains positive by 5.7% in 2023.

— Hakyung Kim

Oil falls more than 3% as U.S. inventories rise amid China demand worries

Oil fell more than 3% Thursday as U.S. crude inventories rose and China's refining throughput eased.

West Texas Intermediate crude shed $2.55, or 3.33%, to $74.11 a barrel, while Brent futures were down $2.54, or 3.13%, to $78.64 a barrel.

Crude inventories in the U.S. rose by 3.6 million barrels last week. Production remained unchanged at a record 13.2 million barrels per day.

In China, refining throughput eased amid weakening industrial demand, according to Reuters. Throughput was equivalent to 15.05 million barrels per day, slowing from a September record of 15.48 million barrels, according to Reuters.

-- Spencer Kimball

Walmart stock continues to sink after company signals concern about the consumer

Shares of retail giant Walmart have continued to fall throughout the morning and are now down about 7%.

While the company's third-quarter earnings estimates topped expectations, guidance suggested that the fourth quarter could be disappointing.

Walmart CFO John David Rainey told CNBC's Courtney Reagan that the company was "a little more cautious on the consumer" after seeing some softening trends in late October.

"That gave us a reason for or maybe more caution, but in November started off really well. And so it's hard to put our finger on exactly what's driving this," Rainey said.

Walmart's stock did hit an all-time high on Wednesday.

— Jesse Pound

Stocks open lower

Stocks opened lower on Thursday as traders took a breather from November's red-hot rally.

The Dow Jones Industrial Average fell 100 points, or 0.3%. The S&P 500 shed 0.2% while the Nasdaq Composite slid 0.3%.

— Lisa Kailai Han

Barclays turns overweight equities, expects stocks to outperform core fixed income

It's "time to take some risk" in the equity market, according to Barclays.

Despite the stock market's red-hot rally so far this month, analyst Ajay Rajadhyaksha has now turned overweight global equities over core fixed income.

"Yes, we expect the economy to grow more slowly next year, in both real and nominal terms," he said. "But the downside risks to the world economy have diminished greatly."

The analyst continued: "We think stocks will benefit from a fairly benign bottom to this business cycle and look through near-term earnings disappointments. Even as bond yields stay elevated, we expect mid- to high single-digit equity returns in both the US and Europe next year."

— Lisa Kailai Han, Michael Bloom

Weekly jobless claims increase more than anticipated

Initial filings for unemployment benefits rose more than expected last week, the Labor Department reported Thursday.

First-time claims for the week ended Nov. 11 totaled 231,000, an increase of 13,000 from the prior week and ahead of the Dow Jones estimate for 220,000.

Continuing claims, which run a week behind, also rose to 1.865 million, an increase of 32,000 and higher than the 1.853 million FactSet estimate.

—Jeff Cox

Import prices fell 0.8% in October, more than expected

Import prices fell more than expected in October, another part of a continuing disinflation trend boosted by falling gasoline costs.

The Labor Department's price index for U.S. imports declined 0.8% for the month, even more than the expected drop of 0.3% in the Dow Jones consensus estimate. Imports fell for the first time since June and saw the biggest one-month decline since March. On a year-over-year basis, import prices dropped 2%.

A 6.3% slide in imported fuel drove much of the fall in prices, though nonfuel import prices also fell 0.2%.

— Jeff Cox

Stocks making the biggest moves before the bell: Walmart, Cisco and more

Check out the companies making headlines before the bell.

  • Walmart — The big box retailer fell 4.7% after reporting adjusted earnings-per-share guidance for the year of $6.40 to $6.48, lighter than analysts expected.
  • Cisco Systems — Shares tumbled nearly 11% during premarket trading on the back of the company's earnings guidance for the current quarter, which fell below analyst estimates.
  • Palo Alto Networks — Shares slid more than 6% after Palo Alto Networks issued a weaker-than-expected billings forecast for the current quarter and full year.

Read the full list of stocks moving here.

— Lisa Kailai Han, Hakyung Kim

Macy's stock rallies after the apparel retailer tops earnings

Macy's stock added more than 10% before the bell after the apparel retailer reported fiscal third-quarter earnings results that beat analyst expectations.

Macy's reported earnings of 21 cents per shares on revenue of $4.86 billion, versus the 0 cents on $4.82 billion expected by analysts polled by LSEG.

The company also raised its full-year guidance, lifting the low end of its expected sales range to $22.9 billion from the $22.8 billion it had previously projected.

— Lisa Kailai Han

Walmart reports better-than-expected earnings, but shares fall

Walmart shares fell more than 2% in the premarket after the retail giant issued tepid guidance, which overshadowed better-than-expected earnings for the fiscal third quarter. The company sees full-year adjusted earnings per share of $6.40 to $6.48.

For the third quarter, Walmart posted an adjusted profit of $1.53 per share on revenue of $160.8 billion. analysts polled by LSEG expected earnings of $1.52 per share on revenue of $159.72 billion.

— Fred Imbert

European stocks lower as sentiment cools; Burberry down 8%

European shares made a negative start to Thursday's trade.

The pan-European Stoxx 600 index was down 0.4% by mid-morning, with oil and gas stocks shedding 1.3% to lead losses while utilities added 0.8%.

Burberry shares dropped 8% after the British luxury fashion brand warned that it may miss its annual revenue forecast amid a global spending slowdown.

Siemens shares climbed more than 6% after the German industrial conglomerate posted record-breaking quarterly earnings.

- Elliot Smith

Hong Kong markets cool after previous session's gains

Hong Kong's Hang Seng index fell 1.81% in Thursday morning trade, shaving off more than half of its gains from the previous session.

The Hang Seng Tech index shed 2.34%. Most tech focused stocks had rallied on Wednesday on signs of cooling U.S. inflation, which lifted hopes that the Federal Reserve could soon end its interest rate hiking policy.

On Thursday, stocks including Alibaba, Xiaomi, Xpeng and Li Auto were among decliners clocking losses between 2.4% and 6.79%.

— Shreyashi Sanyal

CNBC Pro: UBS expects the Fed to halve interest rates next year. Here are 3 of their preferred trades

UBS has highlighted several stock ideas it favors for 2024, as it forecasts massive cuts for interest rates next year.

The investment bank expects the U.S. will see slower economic growth and strong disinflation leading to an interest rate cut of 275 basis points. That would bring the Federal Funds Rate down from the current range of 5.25% and 5.5% to between 2.50% and 2.75%.

Given the economic outlook, UBS strategists recommend a number of trades to clients for 2024. CNBC Pro has highlighted three of them. Subscribers can read more here.

— Ganesh Rao

Earth is ‘big enough’ for U.S. and China to succeed, Xi says as he meets Biden

The U.S. and China have agreed to resume high-level military communication, according to both countries.

U.S. President Joe Biden and Chinese President Xi Jinping met Wednesday in their first face-to-face encounter in a year.

"We're back to direct, open, clear communications," Biden said at a press conference after the talks.

The U.S. has wanted to revive the military communication, especially after some near-miss incidents where China's ships almost collided with American forces.

"We have to ensure that competition does not veer into conflict," Biden said at the start of the summit. "Critical global challenges we face, from climate change to counternarcotics to artificial intelligence, demand our joint efforts."

The summit, held on the sidelines of the Asia-Pacific Economic Cooperation conference in San Francisco, followed efforts between the countries to increase high-level communication amid continued tensions.

Read the full story here.

— Evelyn Cheng

Stocks on pace for winning week

With more than half of the trading week now in the rearview mirror, the three major indexes are poised to finish higher.

The S&P 500 is up about 2% on the week. Meanwhile, the Dow and Nasdaq Composite have added around 2.1% and 2.2%, respectively.

— Alex Harring

Mega-cap banks could take hits to their net interest income levels as rates fall, Deutsche Bank says

Big banks could be in trouble as rates fall, according to Deutsche Bank.

"Mega cap bank disclosures suggest all remain positioned for higher (not lower) interest rates," said analyst Matt O-Connor. He used third-quarter 10Qs from major financial institutions to update interest rate sensitives.

Of the biggest names, Citi and Goldman Sachs are both "relatively neutral to changes in rates, with modest hits to net II [net interest income] from lower rates and modest boosts from higher rates."

On the other hand, as rates fall both Bank of America and Wells Fargo would take the biggest net interest income hits.

Morgan Stanley's wealth management division would also take a large hit to net interest income, although outside of the division the bank seems to be "liability positioned," implying that "the net impact to net II from lower rates is less than what MS discloses," O-Connor wrote.

— Lisa Kailai Han

Goldman Sachs is out with its official 2024 outlook

Goldman Sachs just came out with its official 2024 outlook — and has a message penned by Taylor Swift for investors.

CNBC Pro subscribers can read the full story here.

— Sarah Min

See the stocks making big moves after hours

These are some of the stocks making notable moves in extended trading:

See the full list here.

Alex Harring

Stock futures open slightly lower

Stock futures inched lower shortly after 6 p.m. ET.

Futures tied to the Dow and S&P 500 slipped 0.1% each. Nasdaq 100 futures lost 0.2%.

— Alex Harring

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