Stock market live Thursday: Third straight down day, Dow claws back early losses, Walgreens pops 4.8%

Stocks close well off session lows

The Dow and S&P 500 finished nearly flat for the day, shaking off larger declines earlier Thursday. The Dow lost 18 points, while the broader index slipped about 0.2%. The Nasdaq Composite was the laggard, dropping 0.5%. — Jesse Pound

Dow turns positive

With about half an hour left in Thursday’s trading, the 30-stock Dow erased a 300-point drop and climbed into positive territory. Walgreens was the biggest gainer in the Dow, jumping more than 5%. — Yun Li

Labor market weakness changes how investors view election, strategist says

Labor market weakness changes how investors view election, strategist says 106746463

Recent labor market data like Thursday’s initial claims has showed that the economic recovery is in a “stall” period, said Yung-Yu Ma, chief investment strategist at BMO Wealth Management, and that is changing how investors are viewing the election.

“Typically, going into an election we often think of gridlock as good, because it sort of presents more of a status quo if there isn’t a way that big changes are going to be made to the economy. Now it’s not necesarily if gridlock is good or bad, but the question is what’s the best means to get fiscal stimulus pumped into the economy,” he said.

That could be making the market more comfortable with a blue wave outcome where Joe Biden can work with a Democratic Congress, the strategist said. — Jesse Pound

Final hour of trading: Stocks fall for a third day in a row

The major averages were headed for their longest losing streak in nearly a month on Thursday as prospects for a new fiscal stimulus package remain dim and coronavirus cases rise across Europe. The Dow dipped 33 points, or 0.1%. The S&P 500 pulled back by 0.3%. The Nasdaq Composite slid 0.7%. —Fred Imbert

Trading action remains light as stocks head for 3-day slide

Thursday’s trading volumes were relatively light as Wall Street is set for a third straight day of losses.

  • U.S. Composite Volume: 5.32 billion shares have traded so far, below the 50-day average volume of 8.16 billion shares. 
  • SPDR S&P 500 (SPY) has traded 40.2 million shares so far, below its 30-day average volume of 81.6 million shares.
  • Invesco QQQ (QQQ) has traded 32.3 million shares so far, below its 30-day average volume of 58.6M shares.

Advancers outpacing decliners at NYSE

  • Advances: 1,606
  • Declines: 1,412
  • Unchanged: 137

Christopher Hayes

S&P 500 price action still ‘constructive’ even amid this week’s pullback, Marketfield says

Marketfield Asset Management’s Michael Shaoul thinks that, from a technical standpoint, the S&P 500 is in a good place even amid this week’s struggles.

“After re‐gaining the ground above the 50‐day moving average and a brief test that followed, the large cap index has pushed higher advancing through short term price resistance at 3,430 last Thursday” before easing slightly this week, the firm’s president and CEO said. “We continue to view the price action as constructive.”

The S&P 500 traded around 3,470 on Thursday and was headed for its third straight daily loss. —Fred Imbert

Fed’s Quarles says short-term funding markets need more reform

Short-term funding markets that froze up during the early days of the coronavirus pandemic will be looked at for more reform measures, Randal Quarles, the Federal Reserve’s vice chair for supervision, said Thursday. In a breakdown of the various credit issues that happened in mid-March, Quarles said the support systems ultimately did their job, but the most vulnerable markets during the 2008 financial crisis turned out to continue to have structural issues when under duress. “It appears that these short-term funding markets remain an unstable source of funding in times of considerable financial stress,” he said. Quarles heads a Financial Stability Board panel that will be examining the issue. – Jeff Cox

Midday movers

Earnings results and Wall Street calls were driving stock moves on Thursday. Here are a few of the major movers:

  • Roku – Shares of the streaming device maker slid after KeyBanc downgraded the company to a “sector weight” rating. 
  • Brinker International — The restaurant stock jumped after an upgrade to outperform from market perform by BMO Capital Markets. 
  • United Airlines — Shares of the airline company fell on the back of disappointing third-quarter results as the travel industry continues to reel from the coronavirus pandemic.

Read more movers here. — Jesse Pound

Markets at midday: Stocks headed for 3-day losing streak

The major averages were on pace for their third straight daily loss around midday amid concerns over new U.S. fiscal coronavirus stimulus and a virus resurgence in Europe. The Dow dipped 126 points, or 0.5%. The S&P 500 traded 0.7% lower and the Nasdaq Composite was off by 1%. —Fred Imbert

Rotate into cyclicals and out of tech, Goldman strategist says

The potential for a blue wave in November combined with a possible coronavirus vaccine has set up the market for a rotation into cyclical stocks and away from tech, Goldman Chief Global Equity Strategist Peter Oppenheimer said in a note Thursday. The firm also moved to a long position on its recovery basket of stocks.

Pro subscribers can read more about the call here. — Jesse Pound

Stocks drop at the open

Stocks fell at the open on Thursday as uncertainty around stimulus talks remains and as Covid-19 cases increase in numerous places. The Dow Jones Industrial Average shed 287 points for a loss of 1%. The S&P 500 declined 1.4%, while the Nasdaq Composite dipped 1.76%. — Pippa Stevens

Charles Schwab delivers earnings beat, shows strong account growth in third quarter

E-broker Charles Schwab beat on the top and bottom lines of its third quarter earnings on Thursday. Schwab reported earnings of 48 cents per share on revenue of $2.45 billion. Analysts were expecting earnings of 46 cents per share on revenue of $2.43 billion, according to Refinitiv.

Schwab added 592,000 new accounts in the third quarter, demonstrating the retail trading boom continued after the epic market rebound. This compares to the 552,000 new accounts in the second quarter, excluding 1.1 million USAA member accounts, and 609,000 new accounts in the first quarter.

Daily active trades averaged 1.5 million in the third quarter, compared to 1.62 million daily active trades in the second quarter.

“As a result of our watershed acquisition of TD Ameritrade, which closed on October 6, 2020, we have created a company with tremendous reach – approximately $6 trillion in client assets and 28 million brokerage accounts – that will leverage the proud history of both firms by helping individual investors across every phase of their financial journey as well as support the independent advisors who serve them,” Schwab CEO Walt Bettinger said in the earnings release. — Maggie Fitzgerald

Stimulus talks to continue

Amid ongoing stimulus talks, Treasury Secretary Steven Mnuchin told CNBC’s “Squawk Box” that he and President Donald Trump are committed to getting a deal done, though it will be challenging to reach a consensus before the election. Mnuchin plans to speak with House Speaker Nancy Pelosi on Thursday.

“What we have been focused on is the language around testing,” Mnuchin said. “When I speak to Pelosi today, I’m going to tell her that we’re not going to let the testing issue stand in the way. We’ll fundamentally agree with their testing language subject to some minor issues. This issue is being overblown.” — Pippa Stevens

Here are Thursday’s biggest analyst calls of the day: Tesla, Zoom, Peloton, Lemonade, Roku & more

  • KeyBanc downgraded Roku to sector weight from overweight.
  • BMO upgraded Brinker to outperform from market perform.
  • Canaccord raised its price target on Netflix to $620 from $550.
  • Credit Suisse initiated Lemonade as underweight.
  • Baird raised its price target on Tesla to $450 from $360.
  • Morgan Stanley downgraded Progressive to equal weight from overweight.
  • Bank of America raised its price target on Peloton to $150 from $116.
  • Guggenheim downgraded Mondelez to neutral from buy.
  • Bernstein raised its price target on Zoom to $611 from $228.
  • Barclays upgraded ViacomCBS to overweight from equal weight.

Pro subscribers can read more here.Michael Bloom

Fastly tumbles 30% after lowering guidance amid TikTok tensions

Shares of Fastly dropped 30% in premarket trading on Thursday after the cloud computing services provider dialed back its third-quarter revenue guidance, citing uncertain geopolitical tensions and a decline in usage from its customers including TikTok.

Fastly said it now expects third-quarter sales of $70 million to $71 million, lower than a previous guidance of $73.5 million to $75.5 million. It also withdrew its full-year forecast.

“Due to the impacts of the uncertain geopolitical environment, usage of Fastly’s platform by its previously disclosed largest customer did not meet expectations, resulting in a corresponding significant reduction in revenue from this customer,” the company said in a statement.

Fastly didn’t name TikTok in the statement, but the company has generated 12% revenue from the Chinese social media platform this year, according to Wall Street firm Piper Sandler. Fastly also previously said TikTok is its single largest customer.

The Trump administration had threatened to slap a new ban on TikTok in the U.S. due to security concerns. The ban was avoided after President Donald Trump approved a deal in principle in which Oracle and Walmart will own 20% of TikTok. — Yun Li

Jobless claims come in higher than expected

Jobless claims for the prior week came in at 898,000 the Labor Department said Thursday. Economists surveyed by Dow Jones had expected first time filers to total 830,000. — Jeff Cox

AB Bernstein gives Zoom Street high price target of $611 per share

AB Bernstein slapped a Street high price target on Zoom Video of $611 per share, up from its old target of $228 per share. The Wall Street firm said it is “increasingly bullish on operational metrics and new product releases” after Zoom’s analyst day on Wednesday.

“Zoom still has a huge runway for increasing penetration and revenue within the Global 2000 companies given only 12% are paying more than $100k in revenue,” the analyst said.

Pro subscribers can read more about the call here. — Maggie Fitzgerald

UK imposes tougher restrictions on London

The U.K. government announced plans to impose tougher coronavirus restrictions on London from midnight on Friday, saying the rapid spread of the disease warranted action now in order to avoid even stricter measures later on.

The U.K. capital city will move to a so-called “high” alert level, up from the current “medium” alert level. It means millions of people in London will soon be unable to meet with anybody outside their household or support bubble in any indoor setting, whether at home or in public.

The French government declared a public health state of emergency on Wednesday as the country saw hospitalizations from Covid-19 jump above the 9,100 threshold for the first time since June 25, Reuters reported. Germany has also announced new rules to curb the spread of the virus.— Yun Li, Sam Meredith

Biden leads Trump by double digits, NBC/WSJ poll shows

A new poll from NBC and The Wall Street Journal show Democratic nominee Joe Biden leading President Donald Trump by 11 percentage points with three weeks to go before the election. That margin is actually smaller than the 14-point spread in the previous NBC/WSJ poll, but the movement is within the margin of error. — Jesse Pound

Morgan Stanley tops revenue estimates

Morgan Stanley on Thursday reported third quarter earnings that beat analyst estimates for revenue on stronger-than-expected trading. The bank earned $1.66 per share, ahead of the $1.28 expected by analysts surveyed by Refinitiv. Revenue rose 16% year over year to $11.7 billion.

“We delivered strong quarterly earnings as markets remained active through the summer months, and our balanced business model continued to deliver consistent, high returns,” CEO James Gorman said in a statement.

Shares of Morgan Stanley were 0.6% lower during premarket trading. — Hugh Son, Pippa Stevens

United Airlines reports $1.8 billion net loss

United Airlines reported a $1.8 billion net lost for the quarter ending Sept. 30 as travel remained depressed amid the coronavirus pandemic. The company reported an adjusted loss of $8.16 per share versus the $7.53 expected by analysts polled by Refinitiv. Revenue fell 78% year over year to $2.49 billion, which was slightly below the consensus estimate of $2.5 billion.

“Having successfully executed our initial crisis strategy, we’re ready to turn the page on seven months that have been dedicated to developing and implementing extraordinary and often painful measures, like furloughing 13,000 team members, to survive the worst financial crisis in aviation history,” United CEO Scott Kirby said in a statement. “Even though the negative impact of COVID-19 will persist in the near term, we are now focused on positioning the airline for a strong recovery that will allow United to bring our furloughed employees back to work and emerge as the global leader in aviation.”

United Airlines shares slid about 1% during premarket trading on Thursday. — Pippa Stevens, Leslie Josephs

Stimulus talk continues but hopes for a deal wane

House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin plan to speak again Thursday on further coronavirus stimulus after Wednesday’s discussion yielded no agreement. Mnuchin said Wednesday that reaching a deal before the election and executing on that would be difficult. Pelosi said earlier this week that a recently proposed package by the administration “falls significantly short” of what is needed.

The pair talked by phone and had “productive” discussions about language in relief proposals delivered over the weekend, Pelosi spokesman Drew Hammill said in a tweet. He added that “one major area of disagreement continues to be that the White House lacks an understanding of the need for a national strategic testing plan” for Covid-19. — Jacob Pramuk, Yun Li

U.S. futures fall, on track for third day of losses

U.S. stock index futures slid on Thursday morning, pointing to steep losses at the opening bell. Futures contracts tied to the Dow Jones Industrial Average shed 280 points, indicating a 260-point loss when the market opens. S&P 500 futures dropped 1%, while Nasdaq 100 futures declined 1.4%.

The move lower, which puts the major averages on track for their third straight day of losses, came as lawmakers continue to remain at odds over additional stimulus measures, and as some European nations including France and the U.K. implemented stricter Covid-19 policies as cases rise. — Pippa Stevens