Dow gives up 300-point gain, turns negative as Thursday’s rally loses steam: Live updates

GlobalFoundries shares popped more than 3% after the semiconductor manufacturer signed a deal with General Motors for exclusive production capacity of U.S.-made chips.

“The supply agreement with GlobalFoundries will help establish a strong, resilient supply of critical technology in the U.S. that will help GM meet this demand, while delivering new technology and features to our customers,” GM executive vice president of global product development Doug Parks said in a statement.

The deal comes as car makers continue to deal with supply chain problems, including a yearslong shortage of chips.

— Fred Imbert, Mike Wayland

Tesla has more than doubled from its bear market low.

The electric-vehicle maker’s stock hit a low of $101.81 on Jan. 6. That’s more than 110% off the session high of $214 the stock hit Thursday.

Tesla’s stock has been helped by the reopening in China, the break in rising rates and an improving landscape for growth stocks. The move higher also comes after the company cut prices for some vehicles, setting off what some have called a pricing war in the electric vehicle market.

But some think the rally could die. Jonathan Krinsky, chief market technician at BITG, said the “rally has run its course” in a note to clients Thursday.

The stock traded up more than 4% Thursday.

Shares of Robinhood dipped into the red in late morning trading after opening the day up more than 5%.

The initial gains came despite Robinhood reporting $380 million in fourth quarter revenue, below the $397 million expected from analysts, according to Refinitiv.

Several Wall Street analysts pointed to improvements in metrics that could lead to profits down the line, such as operating expenses and average revenue per user, as positives in the quarter.

However, Robinhood still had a net loss of $166 million for the quarter and saw monthly active users decline.

Dan Loeb’s Third Point has taken a stake in Salesforce, becoming the fifth activist investor with a position in the software company, CNBC’s Scott Wapner confirmed. The stake was first reported by The Wall Street Journal.

Shares of Salesforce rose more than 2% following the news. The firm, which is experiencing slowing growth, has attracted action from other activists including Elliott Investment Management, Starboard Value, ValueAct Capital and Jeff Ubben’s Inclusive Capital.

— Yun Li

Wall Street just pulled off its biggest IPO in four months, giving bankers hope that the market for newly-listed company shares is stirring to life.

The solar technology firm Nextracker raised $638 million by selling about 15% more shares than expected, sources told CNBC Wednesday.

The listing, which began trading Thursday, shows that the stock market’s rebound this year is reviving appetite for new companies from mutual fund and hedge fund managers, said Michael Wise, JPMorgan Chase’s vice chairman for equity capital markets.

It comes as Wall Street’s so-called IPO window, which allows companies to readily tap investors for new stock, has been mostly shut for the past year.

— Hugh Son

Activist investor Nelson Peltz has dropped his proxy fight against Disney after the company revealed a plan to reorganize its business, cut 7,000 jobs and slash costs by $5.5 billion.

“Now Disney plans to do everything we wanted them to do,” he told CNBC’s “Squawk on the Street” Thursday. “We wish the very best to Bob [Iger], this management team and the board. We will be watching. We will be rooting.”

Peltz’ Trian Fund Management launched a proxy fight against the media giant last month. He slammed Disney for its acquisition of Fox and its failed succession planning, while pushing for a seat on the board.

A slew of analysts also approved of the company’s cost-cutting plans, viewing the initiatives as a way improve profitability long term. One analyst said the plans are “restoring the magic.”

Shares were last up nearly 3%.

Disney CEO Bob Iger said in an appearance on CNBC’s “Squawk on the Street” Thursday that he plans to stay only two years.

“Well, my plan is to stay here for two years, that’s what my contract says, that was my agreement with the board, and that is my preference,” Iger told CNBC’s David Faber.

Those remarks follow Iger’s first earnings report since returning to Disney in November. On Wednesday, Disney announced that it would slash 7,000 jobs, and cut $5.5 billion in costs in a massive restructuring of the company.

Additionally, Iger said he plans to help the board find a new successor following the ouster of Bob Chapek last year.

— Sarah Min, Lillian Rizzo

Fourth-quarter results for both Wynn Resorts and MGM Resort International show that Las Vegas is heating up, according to Wall Street analysts.

Both casino operators reported revenue that beat expectations, with Wynn’s $1 billion coming above Refinitiv’s estimate of $958 million and MGM’s $3.59 billion topping estimates of $3.35 billion.

Several analysts cheered the results, with Jeffries titling its report on Wynn’s earnings, “Las Vegas Is Starting to Sizzle.”

“The strength in Las Vegas coupled with the early stage recovery in Macau are supportive of the strong momentum of late. The commentary supports further positive progression in estimates for both markets, which we believe should drive a positive reaction in the shares,” analyst David Katz wrote in a note Tuesday.

Meanwhile, Deutsche Bank hiked its price target on Wynn to $128 per share from $106, as well as its price target on MGM to $53 from $49 per share.

“We believe the 2023 outlook for Las Vegas remains solid, with near-term strength evident in bookings. We see the return of capital story as compelling and differentiated, with the equity value creation from Macau accelerating,” analyst Carlo Santarelli said in a note Thursday.

Shares of Wynn were up more than 6%, while MGM rose nearly 8%.

— Michelle Fox

The iShares U.S. Aerospace & Defense ETF hit a high not seen since 2020.

The ETF gained 0.5% to reach $115.69. That’s its highest level since Feb. 21, 2020.

It’s also up 1.5% so far this week and 3% since the start of the year. The ETF is 26% higher than its 52-week low, which was hit in September.

— Nick Wells, Alex Harring

Shares of sports gaming company DraftKings were down slightly after being downgraded to sell from neutral at Roth Capital Partners.

Analyst Edward Engel said in a note to clients that DraftKings was likely in for a rough first half of 2023 as new states legalizing sports betting and the potential addition of Fanatics as a competitor could lead to more promotions for customers and shrinking margins.

The downgrade comes after a sharp rally for the stock, which has gained 55% year to date.

—Jesse Pound

Stocks opened in the green, coming off a down Wednesday.

The Dow was up more than 200 points, or 0.7%, shortly after open. The S&P 500 and Nasdaq Composite added 0.8% and 1%, respectively.

— Alex Harring

Wynn Resorts and MGM Resorts International jumped in the premarket as Wall Street lauded the travel-and-casino stocks coming off their recent earnings.

Wynn added 5.4% after it posted $1 billion in revenue for the fourth quarter, ahead of the $958 million expected by analysts polled by Refinitiv.

MGM advanced 6.7% after also beating revenue expectations, reporting $3.59 billion compared with the $3.35 billion analysts anticipated. But the company did see a bigger loss in earnings per share than expected at $1.53 against Refinitiv’s $1.36 estimate.

Analysts are increasingly optimistic about the stocks coming off earnings. Jefferies said Wynn’s results showed that “Vegas is Starting to Sizzle,” while Deutsche Banks also noted Las Vegas’ strong gaming business when reiterating it buy rating on MGM.

The stocks have been closely followed amid news of rolled back Covid protocols that are expected to aid the companies’ businesses in Macao, a Chinese region known for its gambling offerings.

— Michelle Fox, Contessa Brewer, Alex Harring

The 2023 stock market rally has investors feeling their most confidence since last year’s market stumble began, a widely followed sentiment survey shows.

Those expecting the market to be higher over the next month totaled 37.5%, according to the American Association of Independent Investors poll, which was updated Wednesday. That’s the highest level since Dec. 30, 2021, when market bulls made up 37.7% of survey respondents.

Bearishness in the latest survey totaled 25%, which was the lowest reading since Nov. 11, 2021.

While the survey shows optimism growing, the spread between bulls and bears nevertheless reflects a cautious attitude. That gap of 12.2% is on the low side of “neutral” and just a touch above “fearful,” according to the AAII’s spread indicator.

By contrast, the bull-bear spread six months ago was at 28 percentage points, which falls well within the association’s “greedy” indicator.

Sentiment surveys like the AAII reading generally serve as contrarian indicators — when sentiment swings strongly in one direction, it’s often best to move the other way as extremes represent either sharply overbought or underbought conditions.

—Jeff Cox

First-time filings for unemployment benefits rose more than expected last week but held at comparatively low levels.

Jobless claims for the week ended Feb. 4 totaled 196,000, an increase of 13,000 from the previous period and above the Dow Jones estimate for 190,000. It was the fourth week in a row that claims were under 200,000 after the most recent peak of 241,000 in mid-November.

Continuing claims also rose, up 38,000 to 1.688 million, a number that has trended higher since the beginning of the year.

Markets showed little initial reaction to the claims data.

—Jeff Cox

These are the names making the biggest moves in the premarket:

• Tapestry — The Coach-parent reported adjusted fiscal second-quarter earnings of $1.33, beating StreetAccount’s estimate of $1.27, and raised its fiscal 2023 earnings outlook. Tapestry rallied nearly 9%.
• Hilton Worldwide — The hotel operator’s adjusted fourth-quarter earnings of $1.59 per share topped estimates of $1.22, per StreetAccount. Its revenue of $2.44 billion also came above the $2.35 billion expected. Hilton was up 1% in the premarket.
• Tesla — The electric-vehicle maker gained more than 3%, a day after being cleared from blame in the crash of one of its vehicles in Texas. Earlier this week, CEO Elon Musk said he would unveil his “Master Plan 3” at investor day March 1.

For more big premarket movers, check out the full story here.

— Michelle Fox

A difficult macro environment with more pain likely ahead is enough of a reason to hold off on buying shares of Affirm in the near-term, according to RBC Capital Markets.

Analyst Daniel Perlin downgraded the buy-now-pay-later company to sector perform from outperform after the company posted a disappointing earnings report and shared plans to cut its workforce by 19%

Shares were last down more than 17% before the bell.

Read more on the downgrade from RBC here.

Mattel dropped more than 10% in after-hour trading after the toy maker missed analyst expectations in its holiday quarter.

The company reported 18 cents in adjusted earnings per share, under the 29 cents expected by analysts polled by Refinitiv. Revenue also missed expectations, with the company recording $1.4 billion compared with $1.68 billion anticipated by analysts.

CEO Ynon Kreiz said the broader economy had left the company in a more challenging environment than it had hoped for its holiday quarter.

— Alex Harring, Rebecca Picciotto

PepsiCo gained more than 1.5% before the bell on the back of earnings that beat Wall Street expectations.

The snack-and-drink maker, known for brands such as Pepsi and Doritos, reported adjusted per-share earnings at $1.67 for the quarter, ahead of the consensus estimate of $1.65 from analysts polled by Refinitiv. Revenue came in at $28 billion, topping the $26.84 analysts anticipated.

— Alex Harring, Amelia Lucas

Many analysts reiterated their bullish stances on Disney after the media giant unveiled its latest quarterly results along with a plan to cut costs going forward.

“Bob Iger laid out a plan for cost cuts, content and streaming rationalization and ultimately improved profitability,” said Wells Fargo’s Steven Cahall in a Wednesday note to clients. “An execution story is a cleaner catalyst path, and the shares should track higher on confidence + estimates.”

Check out our full story for more analyst commentary.

Credit Suisse on Thursday reported a fourth-quarter and annual net loss that missed expectations, as the Swiss bank continued with its huge strategic overhaul.

The lender’s fourth-quarter net loss attributable to shareholders came in at 1.4 billion Swiss francs ($1.51 billion), worse than analyst projections of a loss 1.32 billion Swiss francs, according to Eikon.

Credit Suisse is telegraphing another “substantial” full-year loss in 2023 before returning to profitability in 2024.

CEO Ulrich Koerner told CNBC on Thursday that the full results were “completely unacceptable,” but underscored the need for the ongoing multi-year transformation program.

Read the full story here.

— Elliot Smith

Morgan Stanley has said shares of a green hydrogen producer are expected to rise thanks to the latest set of green subsidies in both the U.S. and Europe.

The investment bank said the company would benefit as green hydrogen is set to become a “key beneficiary” of cleantech stimulus plans on both sides of the Atlantic.

The push for green energy has gained fresh impetus after the U.S. unveiled its $365 billion subsidy program through the Inflation Reduction Act last year. In response, the European Union announced its Green Deal Industrial Plan earlier this year.

CNBC Pro subscribers can read more here.

— Ganesh Rao

Some companies could struggle to fulfill their existing debt as banks continue tightening their lending standards on commercial and industrial loans, LPL fixed income strategist Lawrence Gillum said in a Wednesday report.

The Federal Reserve reported earlier this week that lending officers at major domestic banks raised the threshold for commercial and industrial firms seeking credit, and that prospective borrowers also reduced their demand for loans. Commercial and industrial, or C&I loans, are short-term loans given to businesses that are often backed by company collateral. These loans are an important funding source for lower-rated companies, Gillum said, because borrowing, or issuing equity shares, can sometimes be too restrictive and costly.

According to Gillum, tighter lending could lead to higher bond yields and spreads for some companies. This increases the risk of high-yield companies defaulting on their payments and not having access to emergency financing from C&I loans if needed. That risk is only exacerbated if the economy contracts this year, Gillum added.

“While we like high yield from a strategic perspective (for investors with a longer-term time horizon), we would caution investors interested in allocating new assets to the space, as there will likely be increased volatility in the near term,” Gillum wrote. 

– Pia Singh

Wednesday evening earnings reports are showing more evidence of consumers spending on experiences.

Revenues for Disney’s parks and experiences business topped expectations as guests flocked to the parks during the holidays, according to the company, who also cited “increased guest spending.” CEO Bob Iger said on the call, demand for parks is “extraordinary right now,” but it wouldn’t be smart to let more people in and dilute the guest experience or charge more for tickets.

Casino and hotel operators MGM and Wynn saw a similar trend. AT MGM:

• Rooms revenues soared 46%
• Average daily rates spiked 30%
• And occupancy was at 91%

Meanwhile, at Wynn:

• Vegas casino revenues were up 17%
• Room revenues jumped 20%
• Entertainment and retail revenues skyrocketed 36%
• Average daily rates rose 12%
• Occupancy hovered around 90%

— Robert Hum, Tanaya Macheel

These are the stocks making the biggest moves in extended trading:

• Affirm — The buy now, pay later company slid 19% in extended trading as fiscal second-quarter earnings and revenue missed analysts’ estimates, according to Refinitiv. CEO and founder Max Levchin also announced layoffs equal to 19% of the workforce effective immediately.
• Mattel — Shares tumbled 12% after the company said shoppers bought fewer toys this holiday season and fourth-quarter sales fell 22% from the prior year.
• Disney — Shares rose more than 5% after the company reported a smaller-than-expected drop in subscribers, as well as a beat on the top and bottom lines. CEO Bob Iger also announced Disney would be slashing 7,000 jobs as part of a cost-cutting and reorganization plan.

For further details and more big movers check out the full story here.

— Tanaya Macheel

Stock futures were little changed to begin trading Wednesday evening.

Dow Jones Industrial Average futures rose 27 points, or 0.08%. S&P 500 futures were just above the flat line at 0.01% and Nasdaq 100 futures advanced slightly by 0.04%.

— Tanaya Macheel