Stocks struggled Thursday as investors dumped risk assets and concerns mounted over the outlook for the U.S. economy ahead of Friday's keynote labor report.
The S&P 500 dipped 0.3% to end at 5,503.41, while the Dow Jones Industrial Average lost 219.22 points, or 0.54%, to settle at 40,755.75. The Nasdaq Composite gained 0.25% to finish at 17,127.66, after rising as much as 1.2% earlier in the session.
"We're right in the middle of yet another mini growth scare," said Arun Sai, senior multi-asset strategist at Pictet Asset Management.
Fresh labor market data Thursday sent mixed signals about the health of the U.S. economy as questions linger over whether the Federal Reserve is behind the curve on rate cuts. Private payrolls data showed the weakest growth since 2021, heightening fears of a slowing labor market. However, weekly claims for unemployment benefits declined from the previous week.
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The market has shown hypersensitivity to potential growth scares in recent weeks, including Tuesday's sell-off on the heels of weak manufacturing data. That puts heightened scrutiny on labor market data, with all eyes on Friday's August nonfarm payrolls report. A weak July report released last month spurred recession fears and a raft of volatility in August.
"It's a very, very narrow band," said Mark Malek, chief investment officer at Siebert Financial. "If we're significantly out of what would be expectation tomorrow, we could see pretty big moves in either direction. If we see any deviation, we expect more volatility."
In other news, Tesla popped 4.9% after the electric vehicle maker said it plans to launch its full self-driving{
Tesla gains 3%, announces plans to release FSD software in Europe, China next year
Tesla rallied nearly 3% after the electric vehicle maker said it plans to roll out its "Full Self-Driving" driver assistance program in Europe and China during the first quarter of 2025, if approved by regulators.
Money Report
The company announced news of the paid add-on driver assistance tool via a social media post on X. The feature has not been cleared by regulators in the regions, but CEO Elon Musk said in July that he expects approval by the end of the year.
Shares have slumped about 12% year to date.
— Samantha Subin, Ryan Browne
Frontier Communications Verizon buy the company in a $20 billion dealThursday's moves come after the S&P 500 and Nasdaq Composite each closed lower for the second straight session. The Dow squeezed out a small gain. All three averages are down for the week.
Dow, S&P finish lower Thursday
The S&P 500 dipped 0.3% on Thursday to end at 5,503.41, while the Dow Jones Industrial Average lost 219.22 points, or 0.54%, to settle at 40,755.75. The Nasdaq Composite gained 0.25% to finish at 17,127.66.
— Samantha Subin
Now is not the time to be chasing defensives, portfolio manager says
Investors may be increasingly rotating into defensive names, but Morgan Stanley Investment Management's Andrew Slimmon would recommend against this strategy.
"Now is the time to just be cautious. Don't chase the defensives that are working because I think when we get to the fourth quarter, that won't work," the portfolio manager told CNBC's "The Exchange" on Thursday afternoon.
On the other hand, Slimmon said one stock that could see upside potential in the fourth quarter is Nvidia and other GLP-1 names. The portfolio manager expects these market winners to continue rallying into year-end.
— Lisa Kailai Han
Traders pricing in big stock market moves on jobs Friday
Options market pricing data reviewed by Morgan Stanley's trading desk shows investors are bracing for big stock moves on Friday.
The S&P 500 is tipped to move 1.1% in either direction, while the iShares Russell 2000 ETF (IWM) is expected to swing 1.8%. The Invesco QQQ Trust ETF, meanwhile, is expected to see a 1.4% move.
This positioning comes as traders brace for a major U.S. jobs report. Economists polled by Dow Jones forecast an increase of 161,000 jobs for August.
— Fred Imbert
Stocks making the biggest moves midday
Check out the companies making headlines in midday trading:
- JetBlue Airways — The New York-based airline popped more than 8% after hiking its forward guidance for third-quarter revenue. JetBlue now expects revenue to be in a range of down 2.5% to up 1% compared to the same period a year ago. Previously, a loss between 5.5% and a loss of 1.5% was expected.
- G-III Apparel Group — Shares surged 24% after the apparel maker posted second-quarter results that topped estimates. Adjusted earnings of 52 cents per share beat the 27 cents per share that analysts expected, according to FactSet. Revenue of $644.8 million fell a bit short of the $649.5 million estimate.
- Hewlett Packard Enterprise — Shares dropped 6% after Hewlett Packard Enterprise saw gross margins decline from a year ago. Fiscal third-quarter results beat expectations, with Hewlett Packard Enterprise citing robust demand for artificial intelligence products.
— Sarah Min
7 stocks in the S&P 500 hit new 52-week lows
During Thursday's trading session, seven stocks in the S&P 500 index hit new 52-week lows.
Names that hit this milestone included:
On the other hand, 38 stocks in the broader market index hit new 52-week highs. Of these, 11 tickers traded at new all-time highs:
- Southern Company trading at all-time-high levels back to its listing on the New York Stock Exchange in 1949
- Duke Energy trading at all-time-high levels back to its listing on the New York Stock Exchange in 1961
- Atmos Energy trading at all-time-high levels back to 1983 when Energas was spun off from Pioneer; in 1988, ATO changed its name to Atmos Energy
- Procter & Gamble trading at all-time-high levels back to when it was first listed on the New York Stock Exchange in 1891
- Colgate-Palmolive trading at all-time-high levels back to its first listing on the New York Stock Exchange in 1930; the company was founded in 1806
- Philip Morris trading at all-time-high levels back to its spinoff from Altria in 2008
- Welltower trading at all-time-high levels back to its incorporation as a health-care REIT in 1985
- S&P Global trading at all-time-high levels back through our history to 1972
- Travelers trading at all-time highs back to its spinoff from Citi in 2002
- Chubb trading at all-time-high levels back through 1993 (ACE and Chubb are now one company)
- Marsh & McLennan trading at all-time-high levels back to 1962 when it became a public company
— Lisa Kailai Han, Gina Francolla
U.S. Steel rises more than 2% after sell-off on Biden plan to block sale
U.S. Steel rose nearly 3% on Thursday after a steep sell-off in the previous session as President Joe Biden is poised to block the company's sale to Japan's Nippon Steel.
Two people familiar with the matter told NBC News that Biden will block the $14.9 billion deal. The president has made his opposition to the deal well known, saying U.S. Steel should remain American-owned.
U.S. Steel shares sold off more than 17% Wednesday after The Washington Post first reported Biden's plans to block the acquisition.
— Spencer Kimball
UnitedHealth, Amgen weigh on Dow
The Dow Jones Industrial Average slumped 260 points, or 0.6%, during morning trading.
UnitedHealth and Amgen were the biggest contributors to the Dow's loss, falling about 2% each. Home Depot, Honeywell International and IBM lost more than 1% each.
Amazon was the biggest gainer in the 30-stock index, jumping nearly 3%. Merck also added close to 3%.
— Samantha Subin
Market volatility could lead to bigger stock blow-ups in the near term, Wolfe Research says
As heightened fears shake the market, stocks could face disproportionate pullbacks in the near term, according to Wolfe Research.
"With risks skewed to the downside into a choppy trading environment over the next two months, earnings disappointments may result in a larger number of stock blow-ups," the firm wrote in a Thursday note.
The CBOE Volatility Index, which measures market volatility, has spiked in recent weeks due to rising trepidation around the U.S. presidential election and a sell-off in the technology sector.
— Lisa Kailai Han
Nasdaq gains 1% as technology stocks rally
The Nasdaq Composite popped nearly 1% Thursday as investors bought up technology stocks.
Tesla was the biggest gainer in the tech-heavy index, surging 6% after the company said it plans to roll out its Full Self-Driving assistance software in China and Europe next year. Amazon popped 3%, while Nvidia jumped 2%.
Comcast, Intel and Arm Holdings were among the significant gainers in the concentrated Nasdaq-100, adding about 2% each. Alphabet and Apple rose about 1% each.
— Samantha Subin
Service sector measure shows modest improvement
The U.S. services sector expanded at a slightly faster-than-expected pace in August, according to the latest Institute for Supply Management survey released Thursday.
The ISM purchasing managers index hit a reading of 51.5% for the month, representing the percentage of respondents reporting expansion. That was up just 0.1 percentage point from July and a touch better than the Dow Jones consensus estimate for 51%.
Also in the survey, the employment index nudged down nearly a full point to 50.2%, while order backlogs and new export orders both showed substantial declines. A reading below 50% indicates contraction.
— Jeff Cox
Nasdaq opens lower, falls for a third day
The Nasdaq Composite opened lower Thursday, falling 0.1%. The S&P 500 hovered near the flatline, while the Dow Jones Industrial Average added 70 points, or about 0.2%.
— Samantha Subin
See the stocks moving in premarket trading
These are some of the stocks making big moves before the bell on Thursday:
- Verizon, Frontier Communications — Verizon announced it will purchase Frontier Communications in an all-cash deal valued at $20 billion, confirming earlier reports of the transaction. Frontier shares tumbled 9.7%, while Verizon's stock advanced 1.2%.
- Tesla — The electric vehicle titan rose nearly 3% after announcing it will roll out its "Full Self-Driving" driver assistance program in Europe and China in the first quarter of 2025.
- JetBlue — The airline climbed 4.6% after raising its guidance for third-quarter revenue. JetBlue said to expect somewhere between a loss of 2.5% and a gain of 1% relative to the same period a year ago. Before this update, the company had said to pencil in a decrease of between 5.5% and 1.5%.
Click here for the full list.
— Alex Harring
Jobless claims edge lower to 227,000, less than forecast
Initial filings for unemployment benefits edged lower last week, easing some fears about the potential for an uptick in layoffs, the Labor Department reported Thursday.
Jobless claims totaled 227,000 for the week ending Aug. 31, a drop of 5,000 from the upwardly revised previous period and slightly below the Dow Jones consensus forecast for 229,000.
Continuing claims also fell, off 22,000 to 1.838 million and below the FactSet consensus call for 1.868 million.
— Jeff Cox
Private payrolls grow by 99,000 in August, ADP says
Private payrolls growth came in well below estimates for August, another sign of weakness in the U.S. jobs market.
Companies hired 99,000 workers last month, according to ADP. That is below a downwardly revised July print of 111,000. It also missed a Dow Jones estimate of 140,000.
"The job market's downward drift brought us to slower-than-normal hiring after two years of outsized growth," ADP chief economist Nela Richardson said in a statement.
— Fred Imbert
Tesla gains 3%, announces plans to release FSD software in Europe, China next year
Tesla rallied nearly 3% after the electric vehicle maker said it plans to roll out its "Full Self-Driving" driver assistance program in Europe and China during the first quarter of 2025, if approved by regulators.
The company announced news of the paid add-on driver assistance tool via a social media post on X. The feature has not been cleared by regulators in the regions, but CEO Elon Musk said in July that he expects approval by the end of the year.
Shares have slumped about 12% year to date.
— Samantha Subin, Ryan Browne
Jobless claims are expected to be down slightly week over week
Jobless claims data for the final week of August is due out before the opening bell on Thursday.
Economists surveyed by Dow Jones are expecting 229,000 initial jobless claims, which would be down from 231,000 the prior week.
— Jesse Pound
C3.ai, Topgolf Callaway among biggest after-hours movers
Here are some of the biggest individual stock movers in extended trading on Wednesday:
- C3.ai — Shares of the technology company dropped nearly 16% after subscription revenue came in below expectations for the fiscal first quarter. C3.ai reported $73.5 million in subscription revenue for the period, while Wall Street analysts were looking for $79.2 million, according to FactSet.
- Topgolf Callaway — The golf equipment and entertainment stock rose about 3% after the company announced that it will split into two. Callaway will be a golf equipment and active lifestyle company, while Topgolf will focus on golf entertainment.
- AeroVironment — Shares of the defense contractor slid more than 3% after the company reaffirmed its full-year guidance despite beating estimates on the top and bottom lines for its fiscal first quarter.
— Jesse Pound
Stock futures open little changed
Futures were calm when trading began at 6 p.m. in New York.
— Jesse Pound
