Dow Tumbles Over 280 Points To Turn Negative for the Year

October 20, 2023 04:40 PM EDT

The Dow Jones Industrial Average tumbled 286 points, or almost 0.9%, in its third consecutive session of declines of more than 250 points. For the week, the Dow lost around 1.6% to close at 33,126, below where it started the year. 

Merck & Co. (MRK) shares gained 2.2% after it signed a $5.5 billion deal with Japanese drugmaker Daiichi Sankyo to develop three of its candidate cancer drugs. Walgreens Boots Alliance (WBA) followed, moving higher by 1.4%.

Johnson & Johnson (JNJ) shares gained 0.5% after it reported promising results from an early trial of an antiviral pill for the treatment of dengue.

American Express (AXP) shares plunged 5.4% after the credit card provider’s quarterly earnings revealed it has started putting aside more money to cover credit delinquencies. That overshadowed its record third-quarter revenue and earnings per share on increased spending on entertainment and travel. 

The technology sector declined by 1.7%, as did several tech components of the Dow 30. Salesforce (CRM) shares fell 2.2%, while Intel (INTC) dropped by 2.1%, and Microsoft (MSFT) moved lower by 1.4%. 

Apple (AAPL) shares fell 1.5%, the sixth straight session of declines for the tech giant, its longest losing streak since falling for eight straight sessions in January 2022.

-Terry Lane

Oil Retreats Slightly as Israel Delays Gaza Invasion

October 20, 2023 03:56 PM EDT

Oil futures, higher earlier in the day on the threat of fighting between Israel and Hamas spreading in the Middle East, fell after reports that Israel had agreed to delay its invasion of the Gaza Strip to allow more time to negotiate the release of hostages taken by Hamas.

The conflict and the possibility of Israel's oil-rich neighbors like Iran becoming involved have been the main drivers of oil prices since Hamas attacked southern Israel on Oct. 7. In that time, the West Texas Intermediate continuous contract has risen 8% and Brent crude has climbed 9%.

Toyota Joins EV Makers Adopting Tesla’s Charging Standard

October 20, 2023 03:23 PM EDT

Japanese automaker Toyota has joined the likes of Ford (F) and General Motors (GM) in adopting the North American Charging Standard (NACS), allowing the company's vehicles to access Tesla (TSLA) charging points.

Under the agreement, Toyota's vehicles will be able to access a network of 84,000 charging ports across North America.

Toyota's announcement comes after a rush of companies have moved to adopt Tesla's charging standard, solidifying the company's dominance in charging. U.S. car giants Ford and GM announced they were adopting the NACS standard in June, alongside Toyota's Asian rival Hyundai.

Shares of Toyota Motor Corp. (TM) were down 0.4% late Friday afternoon. Tesla (TSLA) shares fell 3%, extending its declines from yesterday when it fell 9% on a disappointing earnings report.

-Kevin George

Midday Market Movers

October 20, 2023 02:19 PM EDT

Merck & Co. Inc (MRK): Shares of the pharmaceutical giant rose more than 2% after it signed a deal to develop and commercialize three cancer treatments. Merck will pay at least $5.5 billion in the next two years, and another $16.5 billion if certain sales milestones are hit.

Abbott Laboratories (ABT): Shares of the medical device maker gained more than 2%, extending its gains after beating earnings estimates earlier this week and reassuring investors that the popularity of weight loss drugs like Ozempic wouldn’t affect its diabetes device business nearly as much as markets expected. 

Oracle Corp. (ORCL): Shares of the enterprise software provider fell about 6% a day after its AI Executive Forum, in which it outlined ways businesses could use AI to improve their business. The event may not have lived up to the AI hype that’s pushed Oracle stock up 65% in the last year.

Hewlett Packard Enterprise Co. (HPE): Shares of the IT services provider fell more than 5% after offering a disappointing cash flow and profit outlook for its 2024 fiscal year.

American Express Increases Provisions for Delinquent Customers, and Shares Fall

October 20, 2023 01:05 PM EDT

American Express (AXP) was the worst-performing stock in the Dow midday Friday as shares fell over 3% after the credit card provider boosted the money put aside to cover customers defaulting on their payments.

Amex reported third-quarter fiscal 2023 provisions for credit losses of $1.233 billion, up from $1.198 billion in the previous quarter and $778 million a year ago. The company explained the increase reflected “higher net write-offs, partially offset by a lower net reserve build."

That came as Amex posted its sixth straight quarter of record revenue, which rose 13% year-over-year to $15.38 billion. Earnings per share (EPS) came in at $3.30, also an all-time high. Both exceeded analysts’ forecasts.

Nonetheless, the news sent shares of American Express into negative territory for 2023.

-Bill McColl

Gold Gains as Fighting in the Middle East Escalates

October 20, 2023 12:23 PM EDT

Gold futures passed $2,000 Friday morning as fighting in the Middle East escalated, Israel ordering the evacuation of a town close to the Lebanese border after exchanging fire with the Lebanon-based militant group Hezbollah. 

Gold last traded over $2,000 on July 31, when it briefly jumped above the threshold before dropping the next day. 

Gold prices often rise amid heightened uncertainty and risk in markets. Prices jumped in March amid the largest U.S. bank failures since the 2007-2008 financial crisis. And they’ve risen nearly 9% since Hamas attached southern Israel on Oct. 7.

Bitcoin Tops $30,000 on ETF Optimism

October 20, 2023 11:39 AM EDT

The price of Bitcoin rose above $30,000 for the first time since July early Friday as markets awaited a decision from a DC court that is expected to finalize a ruling in favor of crypto asset manager Grayscale in its fight against the Securities and Exchange Commission to convert it Bitcoin trust into an estrange-traded fund. 

Bitcoin jumped to nearly $30,000 earlier in the week after reports indicated the SEC would not appeal Grayscale’s court victory. 

Investors are expecting the SEC to approve the spot Bitcoin ETF applications of several large money managers, including BlackRock and Invesco, at some point this year.

The launch of an ETF holding Bitcoin would be more than just a PR victory for the blockchain industry. It would also lower the barriers to buying the cryptocurrency, likely increasing adoption and supporting prices. 

Regions Financial and Comerica Earnings Sink Regional Bank Stocks

October 20, 2023 10:44 AM EDT

Shares of regional banks sank Friday morning after earnings reports from Regions Financial (RF) and Comerica (CMA) stoked concerns about the industry’s health. 

Regions Financial said deposits fell to $126.2 billion in the third quarter from $127 billion the prior quarter and $135.4 billion a year ago. Meanwhile, the amount of money it set aside to cover credit losses increased. Regions shares fell more than 15% early Friday.

Comerica shares dropped 8% after it reported a more than 25% year-over-year decrease in net income last quarter. Net interest income fell 15% to $601 million as interest-bearing deposits and the average cost of those deposits both increased. 

Shares of peers Zions Bancorp (ZION) and Fifth Third Bancorp (FITB) also fell more than 5%.

Stocks Making the Biggest Early Moves

October 20, 2023 09:39 AM EDT

Gains:

• Knight-Swift Transportation Holdings Inc. (KNX): Shares of the trucking and logistics company jumped 13% after beating Wall Street’s estimates on the top and bottom line last quarter. 
• Coinbase Global Inc. (COIN): Shares of the cryptocurrency exchange gained more than 2% after the Securities and Exchange Commission dropped charges against two Ripple executives who it claimed aided the company in breaking federal securities law. 
• General Motors Co. (GM): Shares rose more than 2% after a United Auto Workers (UAW) negotiator said the union and carmaker were nearing a deal that could end the UAW strike against GM, which began more than a month ago.

Losses: 

• Solar stocks: Shares of solar companies sank Friday morning after SolarEdge Technologies (SEDG) warned its third-quarter earnings would come in below prior guidance after unexpected cancellations from European distributors working through inventory. SolarEdge shares fell 33%, while competitor Enphase Energy (ENPH) fell 15%.
• Regions Financial Corp. (RF): The regional bank’s shares lost more than 12% after reporting worse-than-expected third-quarter earnings and missing Wall Street’s forecasts for net interest income. 
• Intuitive Surgical Inc. (ISRG): Shares of the surgical robotics company fell 4% after its third-quarter revenue of $1.74 billion fell short of analysts’ estimates.
  

5 Things to Know Before Markets Open

October 20, 2023 08:55 AM EDT

Here's what investors need to know to start their day:

1. Shares of SolarEdge Technologies (SEDG) dropped 25% in premarket trading after the company warned that in the second part of the third quarter, it experienced a substantial number of unexpected cancellations from European distributors.
2. Knight-Swift Transportation (KNX) shares jumped nearly 18% in premarket trading after the company said it was able to offset a drop in third-quarter core revenue through improvement in its less-than-truckload business.
3. CSX Corp. (CSX) said it expects the slower rail shipping trends from the third quarter to continue for the rest of the year, held back by caution from retailers.
4. Hewlett Packard Enterprise Co. (HPE) shares fell 5% in premarket trading after its company guidance for fiscal 2024 was below analyst expectations.
5. CVS Health Corp. (CVS) shares dipped nearly 1% after the pharmacy chain said it would remove some over-the-counter allergy and cold medicines after a U.S. Food and Drug Administration committee said a main ingredient, phenylephrine, was ineffective when taken orally.

-Terry Lane

Stock Futures Lower as Investors Seek Out Safe Havens

October 20, 2023 08:30 AM EDT

Futures contracts connected to the Dow Jones Industrial Average were about 0.2% lower in premarket trading Friday as investors, worried about a wider conflict in the Middle East, sought out the safety of gold and Treasury bonds.

S&P 500 futures were about 0.3% lower early Friday.

Nasdaq 100 futures fell about 0.4%.