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Market News, October 23, 2023: Nasdaq ekes out gains ahead of big tech earnings, while the Dow drops nearly 200 points


Update (Oct. 24, 2023): For today's live markets coverage, see here.

Stocks ended Monday mixed and Treasury yields retreated after the 10-year note breached 5% for the first time since 2007 at the start of a week crammed with corporate earnings and major inflation data.

The Nasdaq closed 0.3% higher, while the S&P 500 slipped 0.2% and the Dow Jones Industrial Average lost 0.6%.

Markets were on edge at the open after the yield on the 10-year Treasury passed 5%, reaching a 16-year high as markets priced in the likelihood of interest rates staying higher for longer amid sticky inflation and a resilient economy. Investors will get a better idea of just how sticky inflation is when the September Personal Consumption Expenditures (PCE) Price Index, the Fed's preferred inflation gauge, is released Friday.

In corporate news, Chevron (CVX) will buy Hess (HES) for $53 billion in the second major oil deal to be announced this month. Microsoft (MSFT), Google-parent Alphabet (GOOGL), Visa (V), Meta Platforms (META), and Amazon (AMZN) will all report quarterly earnings this week.

Stocks slumped last week as investors moved into safe havens like gold amid fears fighting between Israel and Hamas could widen into a regional conflict.

S&P 500 Gains and Losses Today

October 23, 2023 05:01 PM EDT

Here are the S&P 500 stocks that gained and lost the most today, and the stories behind the market movers.

Investopedia

Dow Falls for Fourth Straight Day on Treasury Yield Fears

October 23, 2023 04:37 PM EDT

The Dow Jones Industrial Average fell 191 points, or about 0.6%, in its fourth straight session of losses.

Walgreens Boots Alliance (WBA) shares jumped 3.3% after JPMorgan Chase upgraded the stock to “Overweight” from “Neutral” and raised its price target to $30 from $27, citing optimism about the tenure of new CEO Tim Wentworth, who formally stepped into that role today. 

American Express (AXP) shares rose 2.1%, rebounding from last week’s losses on an earnings report that showed record revenue, but also an increase in provisions for delinquencies.

Walmart (WMT) shares moved higher by 1.4% while Microsoft (MSFT) gained 0.8%.

Chevron (CVX) shares fell nearly 3.7% after it announced it would acquire Hess (HES) for $53 billion in an all-stock deal, giving the oil giant a stake in offshore development projects in Guyana. Shareholders of Hess will receive 1.025 Chevron shares, equivalent to nearly $171 a share. Hess shares declined about 1.2% to trade at over $161 a share. 

Shares of Intel (INTC) dropped 3.1% on reports Nvidia (NVDA) is using Arm Holdings Plc (ARM) designs to develop a central processing unit for personal computers, a direct challenge to Intel’s business. Nvidia shares jumped 3.8% on the news while American depositary receipts of Arm gained more than 4.9%. 

Amgen (AMGN) shares declined 2.1% while Dow Inc. (DOW) moved lower by 1.5%.  

Salesforce (CRM) shares fell 0.8% after Piper Sandler downgraded it to “Neutral” from “Overweight,” citing uncertainty about the company’s ability to monetize artificial intelligence and growing merger strategy and execution risks.

-Terry Lane

Energy Sector Slumps on Falling Oil Prices

October 23, 2023 03:55 PM EDT

Oil and gas companies were some of the market's worst-performing stocks Monday as oil prices fell while investors kept a close eye on the Middle East.

West Texas Intermediate futures lost 2.5% Monday, falling to about $86 a barrel. Brent crude futures dropped to about $90.

Shares in oil giants followed prices lower. Chevron Corp. (CVX) fell nearly 4% the same day it announced its $53 billion acquisition of Hess Corp. (HES). ExxonMobil Corp. (XOM) stock dropped almost 2%, and Occidental Petroleum Corp. (OXY) fell 4%.

Roivant Sciences Sells Joint Venture With Pfizer to Roche for $7.1 Billion

October 23, 2023 03:20 PM EDT

London-based biotech firm Roivant Sciences (ROIV) agreed to sell its Telavant Holdings unit, which is co-owned by Pfizer (PFE), to Roche Holding for $7.1 billion.

The deal gives Roche development, manufacturing, and commercialization rights in the U.S. and Japan for its experimental RVT-3001 antibody treatment for patients with inflammatory bowel disease, including ulcerative colitis and Crohn’s disease. RVT-3001 showed success in a Phase 2b study, and Roche is expected to begin a Phase 3 study as soon as possible. 

Shares of Roivant Sciences lost ground and were down more than 8% Monday afternoon, while Pfizer shares advanced 1%.

-Bill McColl

TradingView

Bitcoin Passes $31,000 as Markets Anticipate ETF Approval

October 23, 2023 02:49 PM EDT

The price of Bitcoin rose nearly 4% Monday to more than $31,000, its highest since July, amid optimism the Securities and Exchange Commission (SEC) will soon approve a spot Bitcoin exchange-traded fund.

Several major money managers, including BlackRock and Invesco, earlier this year submitted applications to launch an ETF that holds Bitcoin.

A major cloud hanging over the market's hopes was partially cleared last week by reports the SEC would not appeal a D.C. court's judgment that it overstepped when it blocked Grayscale's attempt to convert its Bitcoin Trust into an ETF.

Midday Market Movers

October 23, 2023 01:43 PM EDT

Coinbase Global Inc. (COIN): Shares of the cryptocurrency exchange rose more than 7% as the price of Bitcoin climbed above $31,000 for the first time since July as investors ramped up bets the Securities and Exchange Commission will soon approve a long-awaited spot Bitcoin ETF. 

Spirit AeroSystems Holdings Inc. (SPR): Shares of the plane parts supplier gained 6% after analysts at Bernstein upgraded the stock to outperform from market perform, citing the recent appointment of Pat Shanahan as CEO and a new production deal with Boeing (BA).

Pfizer Inc. (PFE): Shares rose more than 1% after Swiss pharmaceutical company Roche offered to buy Telavant Holdings, which it owns with biotech firm Roivant (ROIV), and its bowel-disease drug for about $7 billion.

FMC Corp. (FMC): Shares of the agricultural chemicals supplier fell 12% after it lowered its third-quarter and full-year sales and earnings outlook, citing an unexpected drop in Latin America sales driven by destocking in Brazil. Shares of peers Corteva Inc. (CTVA) and CF Industries Holdings Inc. (CF) also slipped over 2%.

Chevron Corp. (CVX): Shares fell more than 3% after it said it would buy Hess Corp. (HES) and its operations in Guyana, South Dakota, the Gulf of Mexico, and the Gulf of Thailand, for about $53 billion.

Philips' Profit Rises After Simplifying Operations and Shoring Up Its Supply Chains

October 23, 2023 01:07 PM EDT

American depositary receipts (ADRs) of Philips (PHG) advanced as the health technology firm posted better-than-expected results and raised its outlook on improved operational performance.

The Netherlands-based multinational reported third-quarter fiscal 2023 earnings before interest, taxes, depreciation, and amortization (EBITA) soared 119% from a year ago to 457 million euros ($483.3 million), and comparable sales jumped 11% to $4.5 billion euros ($4.77 billion).

Comparable revenue jumped 14% for its Diagnostic & Treatment unit, climbed 10% at its Connected Care division, and rose 7% at its Personal Care segment. However, a slowdown in demand from China led to a 9% drop in orders.

Philips ADRs were up 3.5% Monday afternoon, and have added a quarter of their value so far this year.

-Bill McColl

Fisker Stock Falls on Price Cuts

October 23, 2023 12:25 PM EDT

Shares of electric vehicle maker Fisker Inc. (FSR) fell more than 1% after it cut prices on its priciest vehicle, the Ocean Extreme SUV.

Fisker slashed Ocean Extreme prices to $61,499, a $7,500 reduction.  At the same time, it said it would raise the prices of its less expensive Ocean Ultra and Sport models starting Nov. 6, 2023. Ocena Ultra prices will increase by $3,000 to $52,999, and Sport prices will go up $1,500 to $38,999.

“It is essential that Fisker responds to competitive realities in the rapidly growing EV market,” Chair and CEO Henrik Fisker said in a statement. And the reality is EV makers across the globe are cutting prices to stir tepid demand. 

Tesla, the leader in the U.S. EV market, has lowered prices several times in the last year in an attempt to drum up demand. That strategy has narrowed its margins without delivering a meaningful boost to sales, an outcome CEO Elon Musk pins on high interest rates.

"When you look at the cost or the price reductions we've made in, say, the Model Y, and you compare that to how much people's monthly payment has risen due to interest rates, the price of the Model Y is almost unchanged," Musk said on Tesla’s quarterly earnings call last week.

UAW Expands Strike to Stellantis's Largest Plant

October 23, 2023 11:26 AM EDT

The United Auto Workers (UAW) on Monday expanded its stand-up strike against the Big Three automakers as negotiations over pay increases and protections in the electric vehicle transition dragged on.

The union said that 6,800 workers at Stellantis's largest factory, the Sterling Heights Assembly Plant in the Detroit suburbs, had joined the stand-up strike, bringing the total number of striking autoworkers to over 40,000. The strike is in its sixth week.

Monday's surprise expansion comes just days after the union said it was making progress with Stellantis (STLA) and General Motors (GM).

In a release Monday, the union accused Stellantis of having "the worst proposal on the table regarding wage progression, temporary worker pay and conversion to full-time, cost-of-living adjustments (COLA), and more."

Chevron to Buy Hess in Second Major Oil Deal in Weeks

October 23, 2023 10:29 AM EDT

Chevron Corp. (CVX), America’s second-largest oil company, said it would acquire Hess Corp. (HES) for $53 billion, the second-largest U.S. acquisition this year.

The deal values Hess at $171 a share, a 5% premium over Friday’s closing price. Hess shares rose about 2% to $166 Monday morning.

The announcement comes just two weeks after ExxonMobil (XOM) said it would buy Pioneer Natural Resources (PXD) for nearly $60 billion. 

Surging oil and gas prices in 2022 boosted oil company profits to historic highs and left giants like Exxon and Chevron flush with cash. 

Stocks Making the Biggest Moves Premarket

October 23, 2023 09:24 AM EDT

Gains: 

  • Roivant Sciences Ltd. (ROIV): Shares of the biotech firm jumped more than 8% after Swiss drugmaker Roche agreed to buy its bowel-disease subsidiary Telavant, which Roivant jointly owns with Pfizer (PFE), for more than $7 billion. Pfizer shares rose 1%.
  • Walgreens Boots Alliance Inc. (WBA): Shares gained 3% after analysts at JPMorgan upgraded the stock to overweight from neutral. The stock has lost more than 40% of its value so far this year, making it the worst-performing component of the Dow Jones Industrial Average.
  • Koninklijke Philips NV (PHG): The health tech company’s shares rose more than 1% after it beat analysts’ earnings estimates and raised its full-year sales and earnings outlook.

Losses: 

  • Okta Inc. (OKTA): Shares fell more than 7% before the open, adding to Friday’s 11% drop on news that hackers had accessed the cybersecurity firm’s support systems with stolen credentials. 
  • Salesforce Inc. (CRM): The enterprise software company’s shares fell about 2% after Piper Sandler downgraded the stock to neutral from overweight.  
  • Apple Inc. (AAPL): Shares fell more than 1% after Chinese tax authorities launched an investigation into Foxconn, a key Apple supplier and iPhone maker.

10-Year Treasury Yield Hits 16-Year High

October 23, 2023 08:54 AM EDT

The yield on the 10-year Treasury note exceeded 5% for the first time since July 2007.

Yields jumped 9 basis points to as high as 5.02% before U.S. equities markets opened on Monday.

Bond yields move inversely to their prices, which are impacted by investors' expectations for inflation, as well as federal monetary and fiscal policy. The yield on 10-year Treasurys has jumped more than 1 percentage point in the last three months as markets have adjusted to a "higher for longer" interest rate environment.

Futures Sink After 10-Year Yield Tops 5%

October 23, 2023 08:27 AM EDT

Futures contracts connected to the Dow Jones Industrial Average were 0.5% lower in early trading after the 10-year Treasury yield passed 5% for the first time in 16 years.

S&P 500 futures were also down 0.5%.

Nasdaq 100 futures lost 0.6%.

Sources


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