Stock market news today: S&P 500, Nasdaq lead stock market rebound after worst day since September

Josh Schafer and Karen Friar
Updated
916
In this article:

US stocks climbed Thursday to rebound after the major indexes suffered their worst daily sell-off in months.

The S&P 500 (^GSPC) popped about 1%. The Dow Jones Industrial Average (^DJI) rose 0.9%, while the teach-heavy Nasdaq Composite (^IXIC) gained more than 1.2% after both indexes had snapped nine-day win streaks.

Thursday brought a wave of economic data: The final reading of Gross Domestic Product for the third quarter showed the US economy grew 4.9% on annualized basis in the period, below the consensus estimate for 5.2% growth. Meanwhile, the latest data on initial jobless claims showed 205,000 people filed for unemployment insurance in the week ending Dec. 16. Economists had estimated 215,000 claims were filed.

Read more: What the Fed rate-hike pause means for bank accounts, CDs, loans, and credit cards

In corporate news, Apple (AAPL) halted sales of some of its smartwatches in the US amid an ongoing patent dispute. The stock was down just 0.1% Thursday.

Meanwhile, Micron Technology (MU) shares rose more than 8% after the memory chipmaker's second quarter revenue forecast topped Wall Street's expectations. The outlook signals a 2024 revival for the memory chip sector, which has suffered a significant slump in prices.

LIVE COVERAGE IS OVER11 updates
  • Josh Schafer

    Stocks rebound on Thursday

    Stocks returned to their cheerful holiday form on Thursday with all three of the major averages closing in the green.

    The S&P 500 (^GSPC) popped about 1%. The Dow Jones Industrial Average (^DJI) rose 0.9%, while the teach-heavy Nasdaq Composite (^IXIC) gained more than 1.2% after both indexes snapped nine-day win streaks.

    The Russell 2000 (^RUT) rose more than 1.6% after sinking on Wednesday. Consumer Discretionary led the sectors rising nearly 1.5%.

  • Josh Schafer

    Apple halts online sales of its Apple Watch Series 9 and Apple Watch Ultra 2

    Shares of Apple (AAPL) were little changed as the technology product maker halted sales of its Apple Watch Series 9 and Apple Watch Ultra 2.

    Yahoo Finance's Dan Howley has more:

    Apple (AAPL) has officially halted online sales of its Apple Watch Series 9 and Apple Watch Ultra 2 in the US due to a patent dispute related to their blood oxygen sensors between the tech giant and medical technology company Masimo (MASI).

    Apple stopped selling its best-selling smartwatches via its online stores at 3:00 p.m. ET on Thursday. The web pages for both the Series 9 and Ultra 2 list them as currently unavailable with no option to purchase them. In-store sales, as well as delivery and pickup of online orders, will stop Dec. 24.

    In October, the International Trade Commission (ITC) issued cease-and-desist and limited exclusion orders that force Apple to stop importing the watches and selling them through its first-party stores after a presidential review period that ends Dec. 25.

    While the Biden administration could still veto the orders, Apple is pulling the watches early to ensure it is in compliance in case the White House doesn't make any moves.

    Third-party retailers such as Best Buy can continue to sell the watches. Apple will also be able to continue selling the Apple Watch SE, because it doesn't include a blood oxygen sensor.

    Apple can address the patent dispute by reaching a deal with Masimo, altering the Apple Watch's hardware, or, potentially, making software changes to the wearables.

    The US is Apple's most lucrative market. And while the company can still sell the Apple Watches outside of its home country, it risks losing out on a chunk of potential revenue.

  • Josh Schafer

    10-Year Treasury yield makes a round trip in 2023

    The correlation between stocks and bonds has been closely tracked over the last several months as major swings in the 10-Year Treasury yield have correlated with moves in the stock market.

    If yields have fallen, stocks have risen and vice versa.

    This played out amid the recent market rally. After an aggressive dip in the 10-year weighed on stocks through October, the trend reversed in November and December.

    And now, after much discussion about yields sitting at 16-year highs with the threat to press higher, yields are just about back where they started.

    As of about 2:30 p.m. ET on Thursday the 10-Year Treasury yield sits at 3.89% but had been as low as 3.83% during the trading session. The 10-year Treasury yield closed 2022 at 3.88%.

  • Josh Schafer

    Everyone's talking about small caps but that doesn't mean they're recommending the Russell 2000

    Small caps have been all the rage amid the Fed pivot.

    Since the Federal Reserve held interest rates steady on Nov. 1, the Russell 2000 (^RUT) has soared more than 20%. The commonly referenced index is used to encapsulate small-cap companies, which many had sold over the past year and a half over fears that higher interest rates would squeeze the companies.

    But as investors have become increasingly confident that the Federal Reserve is closer to cutting interest rates than it is to raising them again, investors have snatched up interest rate sensitive sectors.

    Small caps have become a favorite among that group, as many strategists have highlighted that indexes like the Russell 2000 are trading at a cheap valuation compared to the historical standard.

    The above graph shows the valuation of profitable companies in the Russell 2000.
    The above graph shows the valuation of profitable companies in the Russell 2000. (Fidelity, FMRCO, Bloomberg)

    However, when asked further about small caps most strategists note they aren't talking directly about the Russell 2000, per se.

    Charles Schwab chief investment strategist Liz Ann Sonders highlighted to Yahoo Finance Live that the Russell 2000 doesn't use a profitability filter. She estimated that 40% of the companies in the index aren't profitable and 31% of the stocks are "zombie companies," meaning they're not turning profitable and are barely surviving.

    "I'm not recommending the index," Sonders said. "But if you're looking for an index as a source for ideas, inherently, you have a higher quality index with the S&P 600 (^SP600) because of that profitability filter."

    Matt Stucky, a senior portfolio strategist at Northwestern Mutual Wealth Management, has been "overweight small caps." But, he too sees a key difference in what exactly that means. He prefers to also go fishing in the S&P 600.

    "That's not abnormal for smaller companies that are growing to scale, but with our assessment, we think overweighting factors like profitability makes sense."

    Over the last month, the returns in the two indexes are roughly the same. However, tracking back five years, the value-focused S&P 600 has outperformed, growing about 65% compared to the Russell 2000's 55% return.

    Source: Yahoo Finance
    Source: Yahoo Finance
  • Josh Schafer

    Mortgage rates hit lowest level since June

    Mortgage rates are continuing their decline below 7%, according to new data from Freddie Max released on Thursday.

    Yahoo Finance's Gabriella Cruz-Martinez reports:

    The rate on the 30-year fixed mortgage declined to 6.67% from 6.95% the week prior, according to data released by Freddie Mac on Thursday. Rates fell for the eighth consecutive week and hit the lowest level since June.

    The decline is a departure from recent months when rates surged over 7% to the highest clip in 23 years. Rates have since scaled back over a full point since peaking in October when they hit 7.79%.

    It also comes as signs of cooling inflation solidified the Federal Reserve’s decision to hold its benchmark rate steady last week while indicating up to three possible rate cuts in 2024. While welcome news for some homebuyers, lower mortgage rates won’t be enough to mend affordability challenges plaguing most Americans. They have, however, rekindled some refinance activity.

    "Unless it's a really compelling rate climate, mortgage and housing activity does slow measurably this time of year — there's your seasonal holiday effect," Keith Gumbinger, vice president of HSH.com, told Yahoo Finance. "The good news is that rates are down, and to the best levels since summer. The bad news is that they are only as low as they were during the summer, which to say not all that compelling an opportunity for buyers or those looking to refinance."

  • Dani Romero

    Homebuilder stocks get price target bumps from JPMorgan

    JPMorgan analysts are getting more bullish on the homebuilding sector.

    Analysts at the bank raised their December 2024 price targets on builder stocks amid investor enthusiasm for rate cuts from the Fed next year.

    The target raises included large cap names like PulteGroup (PHM), which now has a $139 target, up from a previous $117, as well as Toll Brothers (TOL), which got a bump to $127 from $108. Smaller competitors like Meritage Homes Corporation (MTH) and Taylor Morrison Home Corporation (TMHC) were also among the names that saw increases.

    The bank also raised the sector's EPS estimates for 2024 and 2025 by 3% and 6%, respectively.

    The updated projections come as homebuilder stocks have posted a major rally since November driven by a drop in rates and rising optimism that the Fed will rate cuts next year. At its most recent meeting, the central bank signaled that it would cut rates three times in 2024.

    Builders have also benefited from a lack of inventory in the resale market.

    “Ultimately, we believe the recent stronger rally in the sector (as well as the market) compared to the decline during the prior three months has been not only driven by the recent decline in interest rates, but also by investors greater certainty towards a more constructive market outlook for 2024, which includes the Fed beginning to cut rates midyear, along with the economy moderating but avoiding even a mild recession,” JPMorgan analyst Michael Rehaut wrote in a note to clients Thursday.

    Shares of large-cap homebuilder stocks are up more than 80% year to date, while shares of small-cap builder stocks have increased more than 70%.

  • Josh Schafer

    Stocks on the move after earnings

    Micron (MU) led the Yahoo Finance trending tickers page with shares up roughly 7% on Thursday after the semiconductor topped Wall Street's earnings estimates. The company projected sales in the current quarter to hit $5.3 billion, above estimates for $4.97 billion.

    Carnival Corporation's (CCL) earnings topped Wall Street's expectations on Thursday sending shares up more than 7% in intraday trade. The company's revenue of $5.4 billion came in higher than the $5.3 billion analysts expected while the cruise liner noted that booking volumes exceeded 2019 levels during the fourth quarter.

    BlackBerry (BB) fell 13% on Thursday as the company's fourth quarter revenue guidance came in at a range of $150 million to $159 million, below analysts' expectations for $190 million.

    CarMax (KMX) shares were up more than 6% after the company's earnings per share of $0.52 surpassed estimates for earnings per share of $0.11.

  • Josh Schafer

    Short sellers lost close to $178 billion in 2023

    It's been a tough year to bet against stocks.

    Short sellers on Wall Street have lost nearly $178 billion this year, according to data from S3 Partners provided to Yahoo Finance.

    The top six stocks these investors have lost money on are all part of the Magnificent 7, with Alphabet (GOOGL) being the lone tech leader not atop the list. The moves reflect the unexpected nature of the 2023 stock market rally which many on Wall Street didn't predict entering the year.

    But as hype over artificial intelligence took hold in the spring of 2023, companies like Nvidia (NVDA), Tesla (TSLA) and Meta (META) soared more than 100% this year.

    Read more here.

  • Josh Schafer

    And the data says...

    A slew of economic data was released at 8:30 a.m. ET on Thursday.

    The final reading of Gross Domestic Product for the third quarter showed the US economy grew 4.9% on annualized basis in the period. This came below the prior reading of 5.2%, which economists had expected to hold.

    Still, it marked the strongest quarter of economic growth since the fourth quarter of 2021.

    Meanwhile, the latest data on initial jobless claims showed 205,000 people filed for unemployment insurance in the week ending Dec. 16, below consensus estimates for 215,000 claims.

    "The claims data – along with other recent labor market statistics – are consistent with a job market that is cooling but not freezing," Oxford Economics lead US economist Nancy Vanden Houten wrote on Thursday.

  • Josh Schafer

    Stocks open Thursday higher

    US stocks climbed on Thursday, headed for a rebound from their worst daily sell-off in months as nerves settled and the prospect of interest rate cuts buoyed spirits again.

    The S&P 500 (^GSPC) popped about 0.8%, staging a comeback from the biggest single-day loss since October. The Dow Jones Industrial Average (^DJI) rose 0.7%, while the teach-heavy Nasdaq Composite (^IXIC) gained 1.2% after both indexes snapped nine-day win streaks.

    Meanwhile, bond yields fell with the 10-Year Treasury retreating four basis points to 3.83%, its lowest level since late July.

  • Brett LoGiurato

    Stock futures point to rebound after brutal sell-off

    Stock futures pointed to a rebound Thursday after Wall Street's biggest sell-off in months.

    Here's a look at what's happening today, via Yahoo Finance's Morning Brief (sign up here!):

    • Economic data: Initial jobless claims, week ended Dec. 16 (215,000 expected, 202,000 previously); Continuing jobless claims, week ended Dec. 9 (1.88 million expected, 1.88 million previously); Third quarter GDP, final estimate (+5.2% annualized rate expected, +5.2% previously); Third quarter personal consumption, final estimate (+3.6% annualized expected; +3.6% previously); Philadelphia Fed business outlook, December (-3 expected, -5.9 previously)

    ‌

    • Earnings: CarMax (KMX), Carnival (CCL), Nike (NKE)

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