Dow Jones Industrial Average Tanks 500 Points – Ends September Down 8%

Wall Street earnings analysts lowered their third quarter earnings estimates more than normal in the past three months, according to FactSet senior earnings analyst John Butters.

The estimated earnings growth rate for all the companies in the S&P 500 index now stands at 2.9% and, if that turns out to be the actual number for the quarter, it will prove the slowest rate of expansion since the third quarter of 2020, when earnings fell 5.7%.

How bad has the adjustment on the Street been? Butters says that when the second quarter ended on June 30, third quarter earnings were forecast to expand by 9.8%.

Because the denominator on the market has contracted, the forward 12-month price-to-earnings multiple on the S&P 500 is now 15.4, Butters says, against a 5-year average of 18.6 and a 10-year average of 17.1.

— Scott Schnipper

Some market observers say they see the Federal Reserve using the markets as a vehicle for curbing inflation by way of rate hikes.

“The market stinks,” said Jamie Cox, managing partner of Harris Financial Group. “But that’s basically what the Fed wants: tighten financial conditions, and they believe that that will help bring down inflation to the levels that they find acceptable. And they’re using the transmission mechanism of the market to make that happen.”

He said there are “large amounts of net worth being erased” as the rate hikes come. But Cox said the downturn could provide opportunity for savvy investors, specifically pointing fixed income as an area worth watching as the Fed’s war against inflation continues to play out.

— Alex Harring

At least 53 stocks in the S&P 500 hit new 52-week lows during Friday afternoon trading.

Here are some of the names:

• Comcast (CMCSA) trading at lows not seen since May, 2016
• AT&T (T) trading at lows not seen since Apr, 2003
• Verizon (VZ) trading at lows not seen since Aug, 2015
• Advance Auto Parts (AAP) trading at lows not seen since Feb, 2021
• Best Buy (BBY) trading at lows not seen since Apr, 2020
• Carnival (CCL) trading at lows not seen since Oct, 1992
• Caesars Entertainment (CZR) trading at lows not seen since Aug, 2020
• eBay (EBAY) trading at lows not seen since Apr, 2020
• Garmin (GRMN) trading at lows not seen since May, 2020
• CarMax (KMX) trading at lows not seen since Apr, 2020
• Nike (NKE) trading at lows not seen since Apr, 2020
• PVH Corp. (PVH) trading at lows not seen since July, 2020
• Ralph Lauren (RL) trading at lows not seen since Nov, 2020
• VF Corp. (VFC) trading at lows not seen since Oct, 2011
• Whirlpool (WHR) trading at lows not seen since July, 2020
• Church & Dwight (CHD) trading at lows not seen since June, 2020
• Colgate-Palmolive (CL) trading at lows not seen since June, 2020
• Estee Lauder (EL) trading at lows not seen since Oct, 2020
• Kimberly-Clark (KMB) trading at lows not seen since Mar, 2020

— Chris Hayes, Sarah Min

Shares of Twitter rose about 3% following a Bloomberg Law report, citing people familiar with the matter, saying Hollywood super agent Ari Emanuel has attempted to seek a settlement between billionaire Elon Musk and Twitter.

Emanuel reportedly reached out to Twitter board member Egon Durban and suggested the two parties resolve their differences ahead of court proceedings.

Meanwhile, Musk was denied access to more documents from Twitter on its internal metrics for robot and spam accounts, according to a Bloomberg report. A judge on Friday ruled that the social media company had “done enough” to disclose accounts.

Tesla did not immediately respond to a request for comment. Neither did Endeavor, where Emanuel is CEO.

— Sarah Min

Shares of F45 Training Holdings shot up more than 40% Friday after Kennedy Lewis Management made an offer to acquire the Mark Wahlberg-owned fitness company.

Funds affiliated with Kennedy Lewis owned approximately 14.6% of shares at the time the offer was filed, according to a letter to the F45 Board of Directors dated Friday. Kennedy Lewis offered $4 per share, an 82.6% increase from the stock’s value of $2.19 at Thursday close.

“Given the measures that the company has already taken together with the brand and operating repositioning that is needed, we believe that as a private company F45 would be in a stronger position to maximize its resources and realize strategic value that enhances its operations and supports its stakeholders,” the letter reads.

The company is known for its namesake F45, a circuit and high intensity interval training workout. F45 has more than 600 studios across the U.S., according to its website.

— Alex Harring

Despite the major averages sliding this week, some stocks have gained more than 30%.

Pharmaceutical company Biogen is the best performer this week, jumping 32.4% after announcing what analysts call “best-case scenario” results from the third phase of its Alzheimer’s drug trial. But its upside is lower than other top performers at 1.4%.

Other stocks ranging from health care to tech posted gains breaking 20% so far this week. CNBC Pro subscribers can read more about how these stocks performed and where analysts see them headed here.

— Alex Harring

As it stands right now, the S&P 500 is on track for a troubling milestone.

According to Bespoke Investment Group, this could mark the first time in about 80 years that the S&P 500 posts a quarterly loss after being up more than 10% at one point during that three-month period.

The benchmark index was up as much as 14.3% at one point during the quarter. But through Friday afternoon, the S&P 500 was down 3.9%.

— Fred Imbert

Netflix is headed for its best quarter since 2018.

Shares of Netflix are up 37.4% in the quarter ending Sept. 30, on pace to snap a three-quarter losing streak for the streaming company. It’s the best three-month period for Netflix since the first quarter in 2018 when it was up 53.86%.

The streaming giant is among the leading outperformers in the S&P 500 in what has been an ugly month for stocks. The broader market index is off 3.8% this quarter, and down 7.9% this month.

Other best-performing stocks this quarter include Constellation Energy, Enphase Energy and Etsy. They’re up 46.1%, 45.2%, and 41%, respectively.

— Chris Hayes, Sarah Min

Shares of Nike slipped nearly 12% Friday after the company reported earnings weighed down by overstocked inventory that means aggressive discounting in the coming months.

In addition, shares of Carnival fell about 20% after the company reported disappointing third quarter earnings and a weak fourth quarter outlook, citing higher fuel costs and inflation. Shares of competing cruise lines Royal Caribbean and Norwegian also fell 11% and 15%, respectively.

Read more here.

—Carmen Reinicke

JPMorgan’s Marko Kolanovic optimism on the market is waning.

“The most recent increase of geopolitical and monetary policy risks puts our 2022 price targets at risk. While we remain above-consensus positive, these targets may not be realized until 2023 or when the above risks ease,” he wrote in a note Friday.

The firm’s positive outlook, and S&P 500 target of 4,800, was based on several factors that now seem to be in jeopardy, like the central banks not making a grave policy error and the war in Europe de-escalating.

“Given the recent escalation in hawkish rhetoric, the likelihood of central banks committing a policy mistake with negative global consequences has increased,” said Marko Kolanovic, the firm’s global markets strategist and co-head of global research.

He is also concerned about geopolitical tail risks following the destruction of underground Russian gas pipelines.

— Michelle Fox

The Dow Jones Industrial Average is headed for its worst September since 2002. In other words, this September is more awful for the index than the same month during the financial crisis in 2008. The Dow is also seeing its worst month since March 2020.

Meanwhile, the S&P 500 and Nasdaq Composite are having their worst September since 2008.

— Robert Hum, Sarah Min

Overall consumer sentiment in September came in lower than expected, according to a widely followed survey released Friday.

The University of Michigan’s Surveys of Consumers hit 58.6, higher than the prior month’s reading of 58.2 in August. It came in below the Dow Jones estimate of 59.5.

— Sarah Min

The SPDR S&P Retail ETF (XRT) tumbled more than 2% around 10 a.m. ET. The fund was down more than 3% earlier in the session, hitting a fresh low dating back to November 2020.

Rent-a-Center shares led the losses in the ETF, sliding about 16%. The furniture rent-to-own company recently slashed guidance for third quarter per-share earnings to a range of 85 to 95 cents, versus prior guidance of $1.05 to $1.25.

Dick’s Sporting Goods and Qurate Retail were also among the notable decliners in the ETF, falling more than 6% and 3%, respectively.

–Darla Mercado, Gina Francolla

Stocks opened lower Friday as traders looked to close out a terrible week that brought the S&P 500 to a new 2022 low.

The S&P 500 was down 0.69%. The Dow Jones Industrial Average lost 217 points, or 0.74%, while the Nasdaq Composite was 0.59% lower.

— Sarah Min

Federal Reserve Vice Chair Lael Brainard said it’s imperative that the central bank not shrink from fighting inflation until the job is done.

“Monetary policy will need to be restrictive for some time to have confidence that inflation is moving back to target,” she said Friday in remarks prepared for a speech in New York. “For these reasons, we are committed to avoiding pulling back prematurely.”

Inflation continues to push higher, according to the latest personal consumption expenditures price index data, the Fed’s preferred measure of inflation. Core PCE came in hotter than expected on Friday.

— Tanaya Macheel, Jeff Cox

August inflation data disappointed to the upside on Friday with a hotter-than-expected personal consumption expenditures reading, signaling that the Federal Reserve still has work to do to cool prices.

The PCE price index rose 0.3% month over month, and 0.6% when excluding food and energy. Economists surveyed by Dow Jones expected a 0.5% monthly increase for core PCE.

On a year over year basis, PCE rose 6.4%, and core PCE increased 5.0%.

Meanwhile, personal income rose 0.3% in August, matching expectations, and consumer spending rose 0.4%. Personal spending rose 0.1% when controlled for inflation.

— Jesse Pound‏

Credit Suisse says this electric vehicle infrastructure provider known as Allego can see its shares rally more than 120% as consumers rapidly adopt the technology.

“Allego benefits from rapidly growing EV adoption, supportive policies, and incentives,” wrote analyst Maheep Mandloi said in a note to clients Friday. “The stock has been under pressure due to capital needs, but we are positive on Allego owing to its market leadership, strong backlog, and expanded debt facilities that help meet its near-term cash needs.”

CNBC Pro subscribers can check out the full story here.

— Samantha Subin

These companies are making headlines before the bell:

• Nike – Nike slumped 10% in the premarket after it reported a 44% increase in inventories for its latest quarter, and said it would offer more discounts heading into the holiday season. The athletic footwear and apparel maker reported better-than-expected profit and revenue for its latest quarter.
• Amylyx Pharmaceuticals – Amylyx surged 9.3% in the premarket after the FDA approved its new ALS drug. The treatment slows the progression of the disease, extends survival, and is the first ALS drug to gain FDA approval in five years.
• Rent-A-Center – Rent-A-Center tumbled 18.1% in the premarket after the rent-to-own company cut its current-quarter earnings guidance. The company said current economic conditions have impacted retail traffic and customer payment patterns.

Check out more premarket movers here.

— Peter Schacknow

Wharton professor Jeremy Siegel said investors investing for the long haul should stay in stocks despite the recent selling pressures.

“Despite all the ups and downs and crises, and bear markets that we’ve had over the last 30 years, the real return on stocks has been absolutely the same, which is really quite remarkable,” Siegel told CNBC’s Bob Pisani. “They have trouble when the Fed is tightening. We see that now. But once that tightening is done, once normalization comes back, they make up the lost ground and they get back to that long-term trend.”

CNBC Pro subscribers can read the full story here.

— Fred Imbert

Raymond James analysts advised clients buy Microsoft shares, as the tech giant is well-positioned headed into a potential recession.

“Microsoft’s long track record and breadth of product offering (often including discounts for multi-product commitments) make them a competitor for a broader range of enterprise software RFPs than any competitor,” wrote analyst Andrew Marok in a note to clients Thursday.

CNBC Pro subscribers can read the full story here.

— Fred Imbert

China’s official manufacturing Purchasing Managers’ Index surprisingly grew in September to 50.1, much higher than the 49.6 predicted by analysts in a Reuters poll.

The 50-point mark separates growth from contraction. PMI prints compare activity from month to month.

Meanwhile, the Caixin/S&P Global manufacturing Purchasing Managers’ Index, a private survey of factory activity — reported a contraction with a reading of 48.1.

“Subdued demand conditions and lower production requirements led firms to cut back on their purchasing activity in September, with the rate of decline the quickest in four months,” the Caixin press release said.

The official non-manufacturing PMI came in at 50.6 in September, down from 52.6 in August.

— Abigail Ng

The U.S Federal Reserve announced yet another 75 basis point hike earlier this month, sending the federal funds rate up to a range of 3% to 3.25%. The central bank also signaled it may raise interest rates up to as high as 4.6% in 2023 to control inflation.

Ed Yardeni, the economist who coined the term “bond vigilantes,” gives his take as the Fed’s response to inflation comes under intense scrutiny.

Pro subscribers can read more here.

— Zavier Ong

Nike and Amylyx Pharmaceuticals are moving after hours.

The sportswear giant Nike was down about 9.2% in after-hour trading Thursday after reporting first-quarter earnings after the bell. Despite beating revenue expectations, the company said supply chain and inventory issues hurt the bottom line.

On the other hand, Amylyx saw shares up nearly 10% in extended trading. The pharmaceutical company received approval from the Food and Drug Administration late in the afternoon for its controversial new drug expected to slow the progress of Lou Gehrig’s disease.

— Alex Harring

The three major indices are all on pace to slide this week.

The Dow is down about 1.23% week to date, putting it on track for its sixth negative week out of the last second. It dropped 7.25% so far this month, which places it on pace for its worst month since March 2020 – when the pandemic began.

The S&P 500 was also on track for its sixth negative week out of the last seven, notching down 1.43% so far this week. It has fallen 7.95% month to date, which would be its worst month since June if it remains at that level.

Also heading toward its sixth negative week out of the last seven, the Nasdaq slid 1.2% so far this week. It is down 9.13% month to date, meaning it is on track for its worst monthly performance since April.

— Alex Harring

Futures ticked up slightly after open Thursday evening following a day of sell-offs as nervous investors continue wondering how the Federal Reserve’s fight against inflation will impact markets.

Futures for the S&P 500 were up 0.33%. The Dow Jones Industrial Average futures were up slightly less at 0.23%. Nasdaq 100 futures followed closely, up 0.21%.

— Alex Harring