Dow falls 100 points as investors digest earnings, economic data: Live updates

Bank of America analyst Ebrahim Poonawala said in a note to clients that he came away confident in Wells Fargo‘s trajectory after a meeting with CFO Michael Santomassimo.

“Management sees significant cost-save opportunities across the franchise, which should keep a lid on expense growth and drive an improving efficiency ratio (WFC lags peers in three of the four operating segments) over the coming years,” the note said.

Poonawala also said that Wells Fargo’s excess capital should help the bank adjust to regulatory changes.

Bank of America has a buy rating and a $50 price target on Wells Fargo, which is 18% above where the stock closed on Wednesday.

— Jesse Pound

JPMorgan thinks Alcon’s recent better-than-expected second-quarter results will underpin forward growth.

The firm upgraded Alcon stock to overweight from neutral on Thursday.

“We acknowledge this reporting season has seen a lot of share prices in the sector struggle even with ‘beats & raises’ – but there had been a lot of anticipation built in elsewhere,” analyst David Adlington said. “The positive earnings’ momentum looks set to continue.”‘

Shares jumped more than 1% midday Thursday.

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— Brian Evans

Hawaiian Electric shares are poised to close at their lowest price in nearly four decades as pressure from the Maui wildfires mount.

Shares traded below $12 midday Thursday. If that holds through the close, it will be the cheapest price since 1985.

Investors have sold-off holdings in recent days amid growing concerns about the impact of the wildfires in Hawaii. Some Wall Street analysts have cut back on or completed pulled expectations for share prices over the next year as the situation’s evolution brings continuous questions on how the company will be impacted.

The stock has plummeted nearly 63% since the start of this week.

— Alex Harring

Oppenheimer marks the latest Wall Street firm to hikes it price target on Nvidia heading into the chipmaker’s earnings next week.

Analyst Rick Schafer lifted his target to $500 from $420 a share, calling the company the “purest scale play” on AI adoption. The new target reflects about 15% upside from Wednesday’s close.

“NVDA’s entrenched DC/AI ecosystem is core to GenAI adoption,” he wrote. “We remain long-term buyers.”

Schafer also views Nvidia as a leader in the transition from legacy central processing unit computing to accelerate compute. He also sees a strong long-term growth setup fueled by its high-performance gaming and auto divisions, and data-centric AI.

— Samantha Subin

Apple is having a difficult August.

The tech giant is currently the worst mega-cap performer for the month, with shares down 11%. It has also seen the largest losses in the Dow Jones Industrial Average, which comparatively has dropped 2.4%.

Shares are on pace for a third-negative week, and are set to snap a 7-month positive streak.

The stock fell 1% midday Thursday.

— Hakyung Kim

All 11 sectors in the S&P 500 are on pace for losses this week in a broad market slide.

The S&P 500 is down 1.5% this week. Consumer discretionary and real estate stocks have led the index lower, with each on pace for weekly losses of more than 2.5%.

Tesla and MGM Resorts weighed on the consumer discretionary sector, while Regency Centers dragged on real estate.

Information technology has performed the best of the sectors this week, but is still down about 0.4%. Rallies in Nvidia, Teledyne and Arista helped restrict losses.

— Alex Harring

Citi remains optimistic on tech giant Apple stock ahead of the company’s iPhone 15 launch.

The firm reiterated a buy rating on Apple stock in a Wednesday note, with a $240 per share target price or about 36% upside from Wednesday’s close.

To be sure, shares are down 1.1% in midday trading.

Recent US supply chain discussions point to strong replacement cycle potential in IP12 [iPhone 12] installed base and excitement around ~30% faster charging on upgraded USB-C vs Lightning port,” analyst Atif Malik said. “We believe a premium is warranted to reflect expanding gross margins, growing services sales mix, and strong balance sheet.”

— Brian Evans

Despite a flat day for the S&P 500, energy shares managed to post gains.

The Energy Select Sector SPDR Fund rose 2.3%. Shares of Exxon Mobil jumped 3.3%, while Chevron, Phillips 66 and ConocoPhillips all gained more than 2%.

Materials stocks also outperformed the broad market index, adding nearly 1%.

Meanwhile, technology, consumer discretionary, consumer staples and health care stocks fell into negative territory.

— Hakyung Kim

Faster productivity growth in the U.S. is coming to the rescue of both the stock market in the form of higher profits and Federal Reserve chairman Jerome Powell in his fight against higher inflation, Wharton School of Business professor of finance Jeremy Siegel said on CNBC’s “Squawk on the Street” Thursday.

“Why aren’t higher rates tanking the stock market now?,” Siegel asked. “Because real increases in productivity and real growth increase profits,” and profits look a lot better today than they did three months ago, “so the bond market has not done well, and the stock market is holding its own.”

Siegel said he’s not worried about inflation rising as a result of this summer’s strong economic reports, because of “one of the biggest bouncebacks in productivity that I’ve ever seen. And that’s saving Jay Powell. That’s why we can have this tremendous GDP growth and yet still have the disinflationary trends that are in the economy.”

“Last year we hired almost 5 million new workers, nonfarm payrolls, and we got GDP growth of less than 1%. It was the worst productivity performance in over 70 years. This year we are hiring at less than half the pace and we have 2-3 times the level of GDP growth that we had last year,” Siegel said.

“It is true, oil stopped going down, commodities have stopped going down, but I don’t see those as starting a new trend. I see the productivity as being a basic disinflationary force that will keep that inflation in check,” said the author of 1994’s “Stocks for the Long Run.”

— Scott Schnipper

Bank of America thinks Adobe could emerge as a leader in artificial intelligence.

The firm upgraded Adobe stock to buy from neutral on Thursday, and lauded its Firefly software as a driver of growth.

“Adobe is ahead of the curve, and we believe that AI offerings (such as generative AI-powered content creation tool Firefly) are likely to begin driving meaningful revenue/[free cash flow] upside as soon as FY24,” analyst Brad Sills said.

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— Brian Evans

Natural gas spiked nearly 2.8% Thursday, but is still headed for its worst week since July. Thus far this week, it’s down about 4% as of Thursday, or its worst week since July 7 when natural gas lost 7.72%.

Meanwhile, the natural gas ETF (FCG) was up 2% on Thursday. It was led by gains in Chesapeake, which is higher by 5.9% after the S&P said it would join the S&P 400 Midcaps index before trading opens Monday.

— Gina Francolla, Sarah Min

Cryptocurrencies were under pressure Thursday as investors grappled with renewed concerns about the U.S. economy.

Bitcoin was last lower by about 2% at $28,506.00, according to Coin Metrics. The slide began after the minutes of the Federal Reserve’s July policy meeting were released. Late Wednesday bitcoin dropped to as low as $28.335.42, its lowest level since late June.

Bitcoin’s correlation with stocks is at its lowest level in two years, according to Coin Metrics. In 2022 it shot to an all-time high as a result of the Fed’s rate hiking campaign to tame inflation.

For more, read the full story here.

— Tanaya Macheel