Dow rises more than 300 points after another report hints that inflation could be slowing

Biotech has shown a lot of strength lately and is contributing to what’s likely to prove broader, fourth quarter outperformance by the health care sector, Mark Newton, head of technical strategy at Fundstrat Global Advisors wrote in a note late Monday entitled, “Biotech breakout worth following as Healthcare gets stronger.”

The iShares Biotechnology ETF (IBB) has strengthened lately and is showing a bullish chart pattern, Newton wrote, and “is a very positive development for Biotech which had been slowly building a base for much of the year.  Near-term, I expect IBB to push higher to $140.80, with an outsized chance of hitting $149 which would be strong overhead resistance.”

Among the large-cap biotech stocks showing recent strength: MRNA, AMGN, GILD, BIIB. Meanwhile, “former leaders” including VRTX and REGN “remain quite strong technically speaking and should be able to participate given Monday’s breakout.”

Finally, the IBB has broken out relative to the big pharma ETF (PPH), as well as the iShares US Medical Devices ETF (IHI) and SPDR S&P Health Care Services ETF (XHS) and, as a result, “is the strongest sub-industry group right now within Healthcare,” which should continue in to December, Newton said.

— Scott Schnipper

Stocks opened higher Tuesday after October’s produce price index signaled that inflation could be slowing.

The Dow Jones Industrial Average rose about 300 points at the open, or 0.9%. The S&P 500 advanced 1.6% and the Nasdaq Composite added 2.4%.

— Tanaya Macheel

October’s lighter-than-expected producer price index suggests a “day of recognition” from the Federal Reserve may be coming sooner than expected, Jeremy Siegel, professor of finance at the Wharton School of Business told CNBC’s “Squawk Box” on Tuesday.

“I think this moves up the pivot,” he said. “All we need is for them to recognize what prices on the ground are actually doing and they are not going up. They’re probably going to go 50 basis points, but that should be the absolute pause.”

Siegel also told CNBC that the yield on the 10-year Treasury note has likely hit its peak and the S&P shouldn’t retest this year’s previous lows.

— Samantha Subin

The producer price index, a measure of wholesale inflation, rose 0.2% in October on a month-over-month basis. Economists polled by Dow Jones expected an increase of 0.4%.

The report comes less than a week after the consumer price index report showed a lighter-than-expected increase as well, stoking optimism that inflation could be easing.

— Jeff Cox

These are some of the companies moving before the bell Monday:

• Getty Images — Getty Images slumped 11.8% in the premarket after its quarterly revenue fell short of Wall Street forecasts, although the visual content marketplace operator did see earnings top consensus.
• Taiwan Semiconductor — Taiwan Semiconductor rallied 10.9% in off-hours trading after Berkshire Hathaway disclosed in a Securities and Exchange Commission filing that it had bought more than $4.1 billion of the chip maker’s stock during the third quarter.
• Energizer Holdings — The maker of Energizer and Rayovac batteries saw its stock surge 10% in premarket action following better-than-expected quarterly results. Energizer’s results came despite what the company calls a volatile operating environment with significant headwinds.

Check out the full list of stocks making the biggest moves here.

— Peter Schacknow, Tanaya Macheel

Walmart and Home Depot kicked off a big week of retail earnings on Tuesday morning.

Walmart shares popped about 7% in early trading after the company boosted full-year guidance. It also beat Wall Street’s earnings and sales estimates.

Meanwhile, Home Depot topped analysts’ sales and revenue estimates, with comps that were also better-than-expected. It kept guidance in place for the full-year, however, and shares dipped 1% premarket.

— George Manessis, Tanaya Macheel

Jefferies thinks it’ll be harder than investors think for Harley-Davidson to grow its subscriber base.

“Simply put, we lack confidence in the go-forward demand trajectory for heavyweight motorcycle segments,” the firm said in a note to clients, noting that a recent “retail inflection lacks legs.”

Harley-Davidson shares slipped 1.7% before the bell.

CNBC Pro subscribers can read more here.

— Alex Harring

Netflix shares traded more than 2% higher in the premarket after Bank of America double upgraded the streaming giant to buy from underperform.

“Despite slower sub growth, we believe efforts to improve monetization via a value-oriented ad tier and significant conversion of password sharers has the potential to drive operating/financial upside,” analyst Jessica Reif Ehrlich said in a note.

CNBC Pro subscribers can read more here.

— Alex Harring

Credit Suisse on Tuesday announced that it would accelerate the restructure of its investment bank by selling a significant portion of its securitized products group (SPG) to Apollo Global Management.

Credit Suisse said the transaction, along with the potential sale of other assets to third-party investors, is expected to reduce SPG assets from around $75 billion to $20 billion.

The bank said the move represented an “important step towards a managed exit from the Securitized Products business, which is expected to significantly de-risk the investment bank and release capital to invest in Credit Suisse’s core business.”

Read the full story here.

– Elliot Smith

European markets were cautious on Tuesday as investors gauged the economic outlook in the region and wider global economy.

The pan-European Stoxx 600 was flat in early trade, with utilities adding 0.8% while telecoms stocks fell 0.4%.

The muted sentiment comes after a choppy session in the United States on Monday, led by comments from Federal Reserve leaders Lael Brainard and Chris Waller about interest rate hikes.

– Elliot Smith

With many stocks in a bear market, equities could be undervalued by 15%, according to Morningstar.

The equity research firm’s chief U.S. strategist believes headwinds that were present earlier in the year will start to recede at the start of next year and benefit stocks.

Dave Sekera also shared his “fair value” assessment on six companies with a “wide economic moat” that will outperform in such an economic environment.

CNBC Pro subscribers can read more here.

— Ganesh Rao

China’s industrial production grew 5% in the month of October compared with a year ago, slowing from an increase of 6.3% seen in September. The latest figure misses estimates of a 5.2% rise predicted in a Reuters poll.

Separately, retail sales in China fell 0.5% in October from a year ago, missing expectations.

Analysts polled by Reuters expected a 1% increase, and retail sales grew 2.5% in September.

— Abigail Ng

Which stocks could benefit if China rolls back its zero-Covid policy? Market pros reveal how to play a reopening as China eases some of its virus controls.

Pro subscribers can read more here.

— Zavier Ong

Two major retailers will report earnings Tuesday morning, giving investors more insight into their quarters and how consumers are faring with high inflation and the threat of economic weakness.

Walmart and Home Depot will both release results early Tuesday. Analysts expect Walmart to report earnings per share of $1.32 on revenue of $147.75 billion, according to Refinitiv. Estimates for Home Depot are for earnings per share of $4.12 on $37.96 billion in revenue.

Later in the week, Target, Lowe’s, Macy’s, Kohl’s and Gap will also report their latest results.

—Carmen Reinicke

Shares of the blank-check company that said it planned to merge with Trump Media and Technology Group, former President Donald Trump’s social media company, jumped 11% Monday ahead of an announcement from the former president scheduled for Tuesday.

The Digital World Acquisition special acquisition company, or SPAC, is now up more than 66% month to date.

The SPAC announced in October 2021 that it would merge with Trump Media and Technology Group, former President Donald Trump’s social media company, but has so far failed to win the support needed. Another shareholder vote is scheduled for later in November.

In addition, the company is attempting to extend its deadline to complete the acquisition of Trump Media to Sep 8, 2023. The SPAC is still down more than 46% year to date.

—Carmen Reinicke, Gina Francolla

Stock futures rose Monday evening, making back some losses from the daily trading session that snapped a two-day winning streak that began after last week’s better than expected inflation report.

Futures tied to the Dow Jones Industrial Average gained 72 points, or 0.18%. S&P 500 futures and Nasdaq-100 futures gained 0.25% and 0.33%, respectively.

—Carmen Reinicke