Dow drops 700 points as December sell-off continues

Legendary investor Bill Miller, who’s about to retire after a career highlighted by a 15-year stretch when he outperformed the S&P 500, told Barron’s in an interview that he’s added to positions in Amazon and Silvergate Capital, is “a big fan” of Delta Air and that Bitcoin is still a large holding in his personal account.

Miller’s Opportunity Trust mutual fund is down about 36% in 2022, ranking in the 100th percentile of its peer group, which is down less than 14%, according to Morningstar. Over the past 10 years, the fund ranks in the 68th percentile.

Miller’s view of Amazon is “it’s going to be hard” for it “not to double over the next three years given how much cash AWS [Amazon Web Services] and the advertising business are throwing off.” 

Chesapeake Energy was also touted by Miller, along with other, lesser-followed stocks such as OneMain Holdings, Quad Graphics, Gannett, Clear Secure and Farfetch. Chesapeake and OneMain also offer yields above 10%, Miller said.

— Scott Schnipper

Shares of Tesla dropped more than 9% during Thursday trading. The automaker offered a $7,500 discount on its Model 3 and Model Y vehicles delivered in the United States by year-end, as well as 10,000 miles of free supercharging for those vehicles, according to its website.

The promotion added to investor concerns that surging inflation and CEO Elon Musk’s controversial handling of Twitter could weigh on demand for Tesla vehicles.

Tesla is the biggest decliner during the December market sell-off, down 36% this month. Shares are down more than 64% in 2022.

— Sarah Min

Fifteen stocks in the S&P 500 hit new 52-week lows Thursday, with shares of online dating company Match Group trading at all-time lows since is public debut in November 2015.

Here are the stocks:

• Match Group (MTCH) trading at all-time lows back to its IPO in Nov, 2015
• Warner Bros. Discovery (WBD) trading at lows not seen since Apr, 2009
• Advance Auto Parts (AAP) trading at lows not seen since July, 2020
• Amazon.com (AMZN) trading at lows not seen since Mar, 2020
• Expedia (EXPE) trading at lows not seen since Aug, 2020
• CarMax (KMX) trading at lows not seen since Apr, 2020
• Tesla (TSLA) trading at lows not seen since Oct, 2020
• VF Corp. (VFC) trading at lows not seen since Aug, 2011
• Tyson Foods (TSN) trading at levels not seen since Nov, 2020
• Signature Bank (SBNY) trading at lows not seen since Nov, 2020
• Generac (GNRC) trading at lows not seen since Apr, 2020
• Paypal (PYPL) trading at lows not seen since Oct, 2017
• Trimble (TRMB) trading at lows not seen since Oct, 2020
• Western Digital (WDC) trading at lows not seen since Mar, 2020
• Equity Residential (EQR) trading at lows not seen since Jan, 2021

— Chris Hayes, Sarah Min

The Dow Jones Industrial Average fell 500 points, or 1.5%, as stocks accelerated losses during midday trading Thursday. S&P 500 declined 1.97%, while the Nasdaq Composite was 2.83% lower.

— Sarah Min

Information technology was the biggest laggard in the S&P 500, with the sector down more than 3% during morning trading. Consumer discretionary and communication services also underperformed in the broader market index, about 2.6% and 1.8% lower, respectively.

Among the biggest decliners in the information technology sector were semiconductor companies. Shares of Lam Research dropped nearly 10%, while Applied Materials was more than 7% lower. Meanwhile, Advanced Micro Devices fell more than 6%.

— Sarah Min

Stocks are tumbling Thursday, dashing hopes that had been stoked by a 526-point rally on Wednesday. Top Wall Street analysts don’t expect these gyrations to go away anytime soon.

CNBC rounded up predictions from the top 15 Wall Street strategists about where the S&P 500 is heading in 2023. While the average forecast calls for a higher year, many are seeing double-digits drawdowns during the period as the economy is expected to deteriorate.

There is a big divergence in the estimates, with a top prediction of 4,500 from Deutsche Bank and CFRA and a low of 3,725 from Barclays. Read more here.

—Yun Li, Christina Cheddar Berk

Needham analyst Laura Martin laid out her five biggest concerns for Netflix heading into the new year:

• Peak subscriptions may be behind company
• Pressure to average revenue per user
• Below-consensus ad revenue estimates for 2023
• Government lawsuit against Microsoft because of its Activision Blizzard deal makes it less likely for tech giant to buy Netflix
• “If NFLX reports sub growth in 2023, subs come from low-ARPU geos, while sub losses come from high-ARPU geos.”

Martin also lowered her estimates for 2023 and now sees revenue growth of just 6%.

— Fred Imbert

Micron shares fell about 4% after the semiconductor maker missed earnings estimates and said it’s facing dwindling demand for its products.

“In the last several months, we have seen a dramatic drop in demand,” said Micron CEO Sanjay Mehrotra on an earnings call Wednesday, noting that a mismatch between supply and demand has forced the company to retain more inventory and lose its pricing power.

He also noted that profitability for the company will “remain challenged” through 2023, although revenues and free cash flow may bounce back later in the year.

In response to these challenges, the company said it’s cutting 10% of its workforce and suspending 2023 bonuses.

Micron also said it now expects a wider-than-expected loss of 62 cents a share for the current period.

The news from Micron weighed on chip stocks Thursday, with shares of Advanced Micro Devices and Nvidia last down about 6% and 5%, respectively. Marvell Technology and Qualcomm fell more than 4% and 3%, respectively.

— Samantha Subin

Stocks opened lower Thursday, with the Dow Jones Industrial Average down 313 points, or 0.94%. The S&P 500 declined 1.23%, while the Nasdaq Composite was 1.79% lower.

— Sarah Min

AMC Entertainment shares tumbled more than 23% in premarket trading after the movie theater chain announced plans to raise $110 million through the sale of its “APE” preferred stock.

Antara Capital will purchase the “APE” stock at an average price of 66 cents per share, the company said. The preferred stock closed Wednesday at 68.5 cents.

AMC also is looking to win shareholder approval to convert the “APE” stock into “AMC” common shares at a ratio of 1:10.

CEO Adam Aron tried to use the stock’s popularity during the meme stock craze to raise funds and improve its balance sheet in several different ways, including the issuance of “APE” shares. The company had fallen deeper in debt after its theaters were closed for many months during the Covid lockdowns, and audiences were slow to return to theaters amid a lack of new movies.

In a press release Thursday Aron said, the preferred stock was having its intended benefit as it is helping the company improve its liquidity. “However, given the consistent trading discount that we are routinely seeing in the price of APE units compared to AMC common shares, we believe it is in the best interests of our shareholders for us to simplify our capital structure, thereby eliminating the discount that has been applied to the APE units in the market.”

Many of the stocks championed by retail traders have fallen sharply over the past year, and AMC is now different. Shares are down more than 80% year to date.

—Christina Cheddar Berk

David Tepper told CNBC Thursday he is “leaning short” on equities because of global central bank tightening.

“The upside/downside just doesn’t make sense to me when I have so many … central banks telling me what they are going to do,” the founder of Appaloosa Management said in an interview with “Squawk Box.”

The Federal Reserve and European Central Bank have both said they will continue to hike interest rates, while Bank of England officials have signaled the same possibility.

To read the full Pro story, and watch the entire interview, click here.

— Michelle Fox

Initial weekly jobless claims for the week ending Dec. 17 rose by 2,000 to 216,000, the Labor Department said Thursday. However, the number was smaller than a Dow Jones consensus estimate of 220,000.

— Fred Imbert

Needham’s Laura Martin lowered her 2023 estimates for Amazon, while maintaining her fourth quarter 2022 estimates, saying investors want to see pricing power over cost cutting from the online retailer.

“It is our view that AMZN’s economic model has problems created by itself,” Martin wrote in a Thursday note.

“AMZN states that they are focused on cost-cutting. We don’t object. However, investors also want AMZN to demonstrate upside pricing power in 2023, since cost-cutting has limits to driving valuation upside,” Martin wrote.

CNBC Pro subscribers can read the full story here.

— Sarah Min

These companies are making headlines before the bell:

• CarMax (KMX) – The auto retailer’s stock slumped 12.7% in the premarket after its quarterly profit and revenue fell well short of estimates. CarMax earned 24 cents per share, compared with a consensus estimate of 70 cents, and its comparable used-vehicle sales were down 22.4% versus FactSet’s consensus forecast of a 16.9% slide.
• Micron Technology (MU) – Micron shares fell 2.9% in premarket trading after the chip maker reported a wider-than-expected quarterly loss and revenue that fell short of Wall Street forecasts. Micron’s results were impacted by declining demand for electronics, and the company announced it will cut about 10% of its workforce.
• Under Armour (UAA) – The athletic apparel maker named Marriott executive Stephanie Linnartz as its new CEO, effective on Feb. 27. Linnartz is currently president of Marriott’s international operations and has been with the hotel operator for 25 years.

Read the full list here.

— Peter Schacknow

Shares of CarMax fell more than 14% in Thursday premarket trading after the used car retailer missed profit and revenue expectations in its most recent quarter.

CarMax reported earnings of 24 cents per share on revenue of $6.51 billion. Analysts polled by Refinitiv were forecasting earnings of 70 cents per share on revenue of $7.29 billion.

CEO Bill Nash said the company is managing its business “prudently, and prioritizing initiatives that reduce costs” to deal with ongoing pressures in the used car industry.

— Sarah Min

The dollar fell Tuesday as markets started to wind down ahead of the holiday period.

The U.S. dollar index — which measures the greenback against a basket of currencies — slid 0.44% early Thursday to 103.75, its lowest level in seven days. By 4:20 a.m. ET it was trading around 103.94.

The euro rose 0.47% against the dollar to hit $1.0655, although it pared some gains to trade around $1.0631 by 4:20 a.m. ET.

— Hannah Ward-Glenton

Shares of Micron Technology slumped 2% in extended trading after the semiconductor maker shared disappointing fiscal first-quarter earnings results and plans to cut about 10% of its workforce.

For the period, Micron Technology posted a loss of 4 cents a share on $4.09 billion in revenue. Analysts surveyed by Refinitiv had expected a 1 cent loss per share on revenues of $4.11 billion.

The company also shared earnings guidance for the current period that fell short of Wall Street’s expectations, saying that it expects a loss of 62 cents a share. Analysts anticipated a loss of 30 cents.

Micron also shared plans to suspend 2023 bonuses.

— Samantha Subin

Under Armour shares seesawed between gains and losses in extended trading after the athletics apparel company named Stephanie Linnartz as its next CEO.

Linnartz, who currently serves as president at Marriott International, will step into the role in February 2023. She joined Marriott in 1997 as a financial analyst.

Under Armour shares last traded down more than 1%.

— Samantha Subin

It’s been a difficult year for stocks, with just six trading sessions left in 2022.

As of Wednesday’s close, all the major averages are set to break a 3-year win streak and post their worst yearly performance since 2008. That year, the Dow Jones Industrial Average sank 33.84%, while the S&P 500 and Nasdaq Composite shed 38.49% and 40.54%, respectively.

The indexes are also poised to snap two consecutive months of gains. Here’s the breakdown by the numbers:

Dow:

• Up 1.39% for the week
• Down 3.51% in December
• Down 8.15% year to date

S&P:

• Up 0.68% for the week
• Down 4.94% month to date
• Down 18.63% in 2022

Nasdaq:

• Up 0.04% for the week
• Down 6.62% in December
• Down 31.55% this year

— Samantha Subin, Chris Hayes

Stock futures opened higher on Wednesday evening.

Futures tied to the Dow Jones Industrial Averages gained 54 points or 0.16%, while S&P 500 futures added 0.22%. Nasdaq 100 futures inched 0.2% higher.

— Samantha Subin