McCarthy says he's optimistic negotiators can reach deal on debt ceiling in time for vote next week
Big Tech, chipmakers help lift Nasdaq Composite
Dow lags in early trading
The Dow's 1-day chart
— Alex Harring
Leading indicators fell 0.6% in April in 'mild recession' sign
The Conference Board's Leading Economic Index declined 0.6% in April, signaling more deterioration in the U.S. economic picture.
Though the index, fell in line with the Dow Jones estimate, it still was indicative of a slowing growth picture and a potential recession ahead.
"Importantly, the LEI continues to warn of an economic downturn this year," said Justyna Zabinska-La Monica, the board's senior manager of business cycle indicators. "The Conference Board forecasts a contraction of economic activity starting in Q2 leading to a mild recession by mid-2023."
The LEI looks at 10 components including jobless claims, manufacturing gauges and financial market benchmarks such as bond yields and the S&P 500.
—Jeff Cox
UBS raises price target on shipping giant ahead of quarterly results
UBS raised its price target on FedEx on Wednesday, as the firm said it expects quarterly results next month to surpass consensus expectations. Shares were up more than 2% in Thursday's session.
"We believe upcoming results from FedEx next month can be a meaningful positive catalyst for shares. We see little to no risk on the quarter itself, and we are very positive on the potential for 2024 earnings and guidance relative to consensus," Deutsche Bank analyst Amrit Mehrotra said.
FedEx will report quarterly results on June 20. CNBC Pro subscribers can read the full UBS call here.
— Brian Evans
Dow, S&P 500 open down
The Dow and S&P 500 both opened in the red Thursday.
The Dow was down 0.2%, while the S&P 500 was slightly below flat. The Nasdaq Composite, on the other hand, was up 0.2%.
— Alex Harring
Dallas Fed President: Economic data doesn't justify rate hike pause yet
Dallas Federal Reserve President Lorie Logan said Thursday that the economic data points so far don't justify skipping a rate increase at the central bank's next meeting in June.
"After raising the target range for the federal funds rate at each of the last 10 FOMC meetings, we have made some progress," she said in prepared remarks for a speech to bankers in San Antonio. "The data in coming weeks could yet show that it is appropriate to skip a meeting. As of today, though, we aren't there yet."
Futures took a leg lower following her remarks.
— Jeff Cox
Jobless claims fall unexpectedly; Philadelphia manufacturing improves
Initial jobless claims unexpectedly declined last week, indicating the labor market still has some tightness.
First-time filings for the week ended May 13 totaled 242,000, a drop of 22,000 from the previous week and below the Dow Jones estimate for 250,000, the Labor Department reported. Continuing claims nudged lower to 1.799 million, against the FactSet estimate for 1.829 million.
In other economic news, the Philadelphia Federal Reserve's manufacturing index for the region rose to -10.4, an increase of 29 percentage points and better than the estimate for -20.
However, the index, which measures the percentage of companies reporting expansion against those seeing contraction, still showed the sector in decline for the region.
—Jeff Cox
Walmart, Take-Two Interactive among biggest movers before the bell
These are some of the stocks making the biggest moves before the bell:
Walmart – Shares of the retail giant rose more than 1.5% in premarket trading after the company raised its full-year forecast and reported an almost 8% gain in sales for the fiscal first quarter, pointing to strength in its large grocery business that helped offset weaker sales in clothing and electronics.
Take-Two Interactive Software — The video game company surged 14% after posting better-than-expected revenue for its fiscal fourth quarter. Take-Two Interactive shared a weaker-than-expected outlook, but signaled that a strong future gaming slate could fuel strong growth thereafter.
Boot Barn — The western footwear brand shed more than 13% before the bell. Boot Barn reported fiscal third-quarter revenue and guidance that fell short of Wall Street's expectations.
Read the full list of stocks moving here.
— Samantha Subin
Bath & Body Works surges 10% after strong earnings report
Shares of Bath & Body Works jumped nearly 10% in premarket trading after the retailer of body care and fragrance posted stronger-than-expected earnings and revenue for the latest quarter. Bath & Body Works also raised its full-year earnings guidance.
Dan Loeb's Third Point has been an activist investor in the company, raising red flags on the company's executive compensation structure, financial discipline and board composition.
— Yun Li
Indexes on track for weekly gains
Walmart gains on strong earnings and guidance
Shares of Walmart rose more than 1.5% in premarket trading after the retail giant on Thursday raised its full-year forecast and reported an almost 8% gain in sales for the fiscal first quarter, pointing to strength in its large grocery business that helped offset weaker sales in clothing and electronics.
Walmart also reported stronger-than-expected adjusted earnings and revenue, according to Refinitiv.
— Tanaya Macheel, Melissa Repko
UBS Global Wealth Management sees three reasons to buy gold
Gold prices dipped slightly Thursday, as investors grew optimistic that U.S. lawmakers could reach a deal to raise the debt ceiling. However, UBS Global Wealth Management is still bullish on the precious metal, citing three reasons:
- "Central bank demand should remain robust:" Mark Haefele, CIO at UBS Global Wealth Management, said 2022 was the 13th straight year that central banks were net buyers of gold, and demand is unlikely to let up anytime soon. "Based on the 1Q23 data from the World Gold Council, central banks are on track to buy around 700 metric tons of gold this year, much higher than the average since 2010 of below 500 metric tons," he wrote.
- Dollar weakness: The dollar index, which tracks the U.S. currency's performance against six others, is down 0.4% year to date, which should be supportive for gold prices. "The direction of a weakening dollar is clear, with the US Fed having signaled a pause in its current tightening cycle after 500 basis points of rate hikes over the past 14 months," Haefele wrote.
- Recession risk: "Overall, recent data coming out of the US showed the country's growth is slowing, with weaker-than-expected 1Q GDP, six consecutive months of contracting manufacturing activity, and the weakest consumer sentiment since November," according to UBS.
— Michael Bloom, Fred Imbert
European equity markets open higher
European markets opened higher Thursday as U.S. debt ceiling talks make progress.
The pan-European Stoxx 600 index was up 0.3%, with most sectors trading in positive territory. Auto stocks led modest gains with a 0.9% uptick, followed by tech, which was up 0.7% at the start of trading.
European markets
— Hannah Ward-Glenton
Sony shares surge 6% as it eyes separate listing for financial unit
Japanese conglomerate Sony Group is mulling a partial spin off of its financial business in the next two to three years.
Sony said that this will be on the consideration that the group will continue to own a portion - slightly less than 20%, Sony says of the spin off.
This is "so that the financial services business can continue to utilize the Sony brand, and continue to generate synergies with Sony Group companies after the execution of the spin-off."
The financial unit reported a revenue of 1.45 trillion yen ($10.74 billion) in the financial year ended March, while operating profit came in at 223.9 billion yen for the full year.
Shares of Sony closed 6.4% higher on Thursday.
— Lim Hui Jie
Japanese stocks extend winning streak, led by energy and technology stocks
Japanese markets extended their winning streak on Thursday, with the Nikkei 225 leading gains in the region and continuing to trade above the 30,000 mark.
The Topix maintained levels not seen since August 1990.
Energy and technology stocks led the Topix, with its top gainers being Sony and electronics company Tokyo Electron.
Meanwhile, Factset revealed that electronics stocks powered the Nikkei, with the top gainer on the index being semiconductor test equipment manufacturer Advantest, followed by Tokyo Electron.
— Lim Hui Jie
Shares of Tencent slide over 3% despite better first quarter results
Shares of Chinese tech giant Tencent in Hong Kong have slid over 3% even as the company reported an 11% jump in quarterly revenue to 150 billion Chinese yuan ($21.4 billion)
This marked its fastest growth in more than a year, as the company saw a big rebound in payment volumes, ad sales, and gaming.
Net profit climbed 10% to 25.8 billion yuan, lower than than the 31 billion yuan expected by economists polled by Reuters.
— Lim Hui Jie, Ryan Browne
Nomura downgrades China's full-year growth forecast
Nomura downgraded its China full-year growth forecast from 5.9% to 5.5%, according to a Wednesday note.
"China's post-Covid recovery has been rapidly losing steam," Nomura's Ting Lu wrote, noting that the latest activity data and high frequency data in May show the momentum has been losing steam "due partly to weak confidence among consumers and business investors."
"As disappointment kicks in, we see a rising risk of slower activity growth, rising unemployment, persistent disinflation, falling market interest rates, and a weaker currency," he wrote.
Nomura added that it is also cutting its 2024 full-year gross domestic product forecast for China from 4.4% to 4.2%. It now expects the second quarter's GDP to grow 7.8%, third quarter to grow 4.9%, and the final quarter of the year to grow 5.0%.
– Jihye Lee
Japan trade deficit narrows in April, imports fall more than expected
Japan's trade deficit has narrowed by almost half in April, falling to 432.41 billion from 854.93 billion a year ago.
Most notably, imports fell by 2.3% year on year, more than the 0.3% expected by economists polled by Reuters.
Exports came in largely in line with expectations, rising 2.6% year-on-year compared to the 3% expected.
— Lim Hui Jie
The Russell 2000 closed above its 50-day moving average for the first time since March
The three major averages weren't the only indexes that had a strong session during Wednesday's trading. The Russell 2000 – the small cap benchmark — surged 2.21% to close above its 50-day moving average of 1,765.83, a first since March 8.
The smaller firms that make up the 2,000-stock index are especially sensitive to the economic cycle. The 50-day moving average, meanwhile, is important for chart technicians: A close above that threshold can indicate that a positive trend for the index is unfolding.
Stocks leading the Russell 2000 higher Wednesday include National Western Life, Qurate Retail and Microvast.
-Darla Mercado, Gina Francolla
Stocks making the biggest moves after hours
Check out the companies making headlines in extended trading.
Take-Two Interactive Software — Shares jumped 8.1% Wednesday during after hours trading. The video game company reported $1.39 billion in adjusted revenue in the fiscal fourth quarter, topping analysts' estimates of $1.34 billion, according to Refinitiv. Meanwhile, the company's estimates for bookings in the first-quarter and full-year missed Wall Street's expectations.
Cisco Systems — Shares dipped nearly 4% despite the company reporting an earnings and revenue beat for the fiscal third quarter. Cisco posted adjusted earnings of $1 per share and $14.57 billion in revenue. Analysts had estimated 97 cents earnings per share and $14.39 billion in revenue, according to Refinitiv.
The full list can be found here.
— Hakyung Kim
Stock futures open flat
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