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Stock market live Wednesday: Dow gains 450 points, Tesla sinks, DraftKings gets Jordan boost

Stocks close near sessions highs

The market rose in the final hour of trading, with the Dow briefly trading up more than 500 points for the day. The 30-stock average closed about 450 points, or 1.6%, higher, while the S&P 500 gained 1.5%. The Nasdaq Composite lagged its counterparts but still rose 1%. — Jesse Pound

Kansas City Southern jumps 6% on takeover bid

Shares of Kansas City Southern popped more than 6% after the Wall Street Journal reported that private-equity firms Blackstone Group and Global Infrastructure Partners have made a takeover offer for the railroad operator. The Journal, which cited people familiar with the matter, said these buyout investors submitted the bid after a previous offer was rebuffed. Kansas City Southern has a market value of more than $17 billion, and its stock is up more than 27% this year. — Yun Li

Final hour of trading: Dow hits session high, surges 350 points

The Dow traded at its session high with less than an hour left of trading, surging more than 350 points as Coca-Cola and IBM — two of the average’s lagging stocks — outperformed. The S&P 500 rose more than 1% and the Nasdaq advanced 0.7%. Wednesday’s session has featured value stocks outperforming their growth counterparts. —Fred Imbert

Jobs recovery stuck in neutral in August, data shows

Data from staffing firms that track shifts from workers at small businesses and in the service industry showed little improvement in the labor market during August. The slowdown came as the economic relief provisions, including enhanced unemployment of $600 per week, expired at the end of July. — Jesse Pound

NYSE’s plan for expanded direct listings paused, report says

The New York Stock Exchange’s plan to allow companies to raise capital through a direct listings was halted after an influential group of investors objected, the Wall Street Journal reported Wednesday. The Council of Institutional Investors filed a notice to the Securities and Exchange Commission that it would petition the agency’s approval of the new rule, leading the SEC to inform the NYSE that its decision had been stayed, according to the report. The investor group raised red flags that the new structure would allow companies to skip certain regulatory requirements, which could potentially harm investors. — Jesse Pound

New Quinnipiac poll shows Biden 52%, Trump 42% among likely voters

A new Quinnipiac University poll shows Joe Biden leading President Donald Trump 52% to 42% among likely voters.

The poll shows Biden with a wider lead than some other recent polls. Biden is leading by 7.5 percentage points in an average of major polls by after previously holding a double digit lead. One recent poll by USA Today/Suffolk University shows Biden’s lead narrowing. That poll shows Biden with a 7-point lead, down from 12 percentage points in June.

The Quinnipiac poll was conducted nationwide Aug. 28 to 31, following both the Democratic and Republican conventions, and it is the first poll by Quinnipiac of likely voters in the 2020 presidential election. There were 1,081 participants.

The poll also found a majority, 58%, believe the country is worse off than it was in 2016, while 38% said it was better off. The likely voters are split, 48% each, on whether Biden or Trump would do a better job handling the economy.  

Biden was leading on other issues, including handling racial inequality, responding to the coronavirus and handling health care. — Patti Domm

Fed Beige Book reports ‘modest’ economic growth

Economic growth is continuing but remains “modest” and “well below” what was happening prior to the pandemic, according to the Federal Reserve’s latest “Beige Book” report released Wednesday. The summary also said that employment rose overall though some areas “reported slowing job growth and increased hiring volatility” as some temporary furloughs turned into permanent job losses, particularly in the services industry. Wages rose in some sectors, especially in lower-paying areas that were hit hardest in the early days of the Covid-19 shutdown. In real estate, residential was “notably higher” with rising prices but commercial activity continued to decline. Inflation “increased … but remained modest,” the report stated. Regionally, New York reported that growth had “stalled” while Boston business contacts “continued to cite the disruptive effects of the pandemic on all aspects of their activity, even as recovery began or continued in some sectors.” Chicago seemed to fare best as it said “economic activity increased strongly” though not yet up to pre-pandemic levels. — Jeff Cox

Fed officials make push for new approach to inflation

Federal Reserve officials hit the speaking circuit Wednesday to explain and express confidence in the central bank’s revised push to boost inflation. Last week, Chairman Jerome Powell outlined plans that would allow inflation to run hotter than the Fed’s 2% goal following periods, like most of the past decade, when it was weaker. His fellow central bankers are pushing the importance of the new approach. “These changes will actually make it somewhat easier to achieve these goals,” New York Fed President John Williams said. “We’re making to clear both in terms of our words and presumably with our actions that we are comfortable with inflation behind moderately above [2%] for a period of time.” One important change to the policy is the willingness to keep short-term interest rates low even when unemployment falls, which policymakers had once viewed as a cue that higher inflation was on the way. “The new statement language clarifies that in the absence of inflationary pressures or risks to financial stability, strong employment is not a concern and monetary policy will not react to it,” Cleveland Fed President Loretta Mester said in a separate appearance. — Jeff Cox

Markets at midday: Stocks continue strong start to the month in apparent market rotation

Wall Street added to its strong September start as traders rotated out of high-flying tech names like Apple and Tesla and bought into some of the more beaten-down parts of the market. The Dow gained 218 points, or 0.8% and the S&P 500 advanced 0.7%. The Nasdaq, meanwhile, was slightly lower in midday trading. —Fred Imbert

Tesla falling sharply

Shares of Tesla dropped more than 12% on Monday morning as the volatile stock gave back some of its recent gains. Baillie Gifford, Tesla’s largest outside shareholder, announced in a securities filing on Wednesday that it had reduced its holdings of the stock to less than 5% of the outstanding shares. The company said in a statement that the move was due to restrictions on high concentration in its portfolio. — Jesse Pound

United Airlines to cut 16,000 jobs due to the coronavirus pandemic

United Airlines said Wednesday it plans to cut more than 16,000 jobs as early as October as the coronavirus pandemic cripples travel demand and federal aid protecting aviation jobs expires. Those cuts represent about 17% of United’s staff at the end of 2019. This, however, is a much lower job reduction than the company had warned about in July. Back then, the company said 36,000 jobs could be lost. United shares traded more than 1% lower. —Fred Imbert, Leslie Josephs

Broad rally for S&P 500

The S&P 500 posted a modest gain of 0.5% on Wednesday morning, but the rise was widespread. There were 415 stocks in the index trading in positive territory, while just 90 had lost ground, according to FactSet. Micron and Coca-Cola were two of the top performers in the index. — Jesse Pound

Nasdaq turns negative as tech slips

The Nasdaq Composite lost ground in the opening hour of trading and fell 0.4%. Shares of Apple fell nearly 4% after starting the session in positive territory, while Tesla and Zoom both fell sharply. The S&P 500 and Dow held on to their gains of less than 1%. — Jesse Pound

Stocks open higher

The U.S. market continued its strong start to September as all three major indexes opened higher on Wednesday. The Dow climbed 120 points, or 0.4%, while the Nasdaq Composite and S&P 500 rose 0.8% and 0.5%, respectively. Apple helped boost the broader market indexes, gaining 2%. — Jesse Pound

Here are Wednesday’s biggest analyst calls of the day: Nvidia, Peloton, Costco, Facebook & more

  • Deutsche Bank upgraded Zillow to buy from hold.
  • Berenberg upgraded Teladoc to buy from hold.
  • JPMorgan raised its price target on Peloton to $105 from $58.
  • Berenberg downgraded American to sell from hold and Delta to hold from buy.
  • Berenberg upgraded Southwest Airlines to buy from hold.
  • Bank of America raised its price target on Nvidia to $650 from $600.
  • Cowen raised its price target on Costco to $410 from $370.
  • Bank of America raised its price target on Twitter to $52 from $48 and on Facebook to $335 from $290.

Pro subscribers can read more here. — Michael Bloom

Here are Wednesday’s biggest analyst calls of the day: Nvidia, Peloton, Costco, Facebook & more

  • Deutsche Bank upgraded Zillow to buy from hold.
  • Berenberg upgraded Teladoc to buy from hold.
  • JPMorgan raised its price target on Peloton to $105 from $58.
  • Berenberg downgraded American to sell from hold and Delta to hold from buy.
  • Berenberg upgraded Southwest Airlines to buy from hold.
  • Bank of America raised its price target on Nvidia to $650 from $600.
  • Cowen raised its price target on Costco to $410 from $370.
  • Bank of America raised its price target on Twitter to $52 from $48 and on Facebook to $335 from $290.

Pro subscribers can read more here. — Michael Bloom

DraftKings jumps as Michael Jordan joins as board advisor

Michael Jordan is joining DraftKings as a special advisor to the board of directors, the company said Wednesday.

“Michael Jordan is among the most important figures in sports and culture, who forever redefined the modern athlete and entrepreneur,” DraftKings CEO Jason Robins said in a press release. “The strategic counsel and business acumen Michael brings to our board is invaluable, and I am excited to have him join our team.”

Shares of the betting company jumped more than 11% in premarket trading following the announcement. – Pippa Stevens, Thomas Franck

Health experts warn of possible new coronavirus wave in the winter

Health experts are worried about the potential for a new coronavirus wave during the winter, citing several factors that could lead to a higher transmission rate at that time. Respiratory infections, such as coronaviruses, are typically spread by droplets that are released when a person coughs or sneezes. And, health experts say colder and drier conditions in winter strongly affects the transmission of flu-like illnesses. “It is not an unreasonable hypothesis to think that it will get worse in the winter,” said Dr. Simon Clarke, associate professor in cellular microbiology at the University of Reading. —Fred Imbert, Sam Meredith

Private payrolls rise 428,000 in August but miss estimates, ADP says

Private payrolls increased by 428,000 in August, about double that of July but well below Dow Jones estimates of 1.17 million, according to the latest count from ADP.

Big business was responsible for most of the job creation, with 298,000 new workers. At the sector level, leisure and hospitality led with 129,000 new jobs.

The ADP estimate and the Labor Department’s nonfarm payrolls count have differed widely since the pandemic began, with the former consistently well below the latter. Economists expect Friday’s official count to show a gain of 1.32 million. —Jeff Cox

Pelosi and Mnuchin talk, but divide over stimulus remains

House Speaker Nancy Pelosi, D-Calif., and Treasury Secretary Steven Mnuchin spoke over the phone Tuesday in an effort reach a new coronavirus stimulus deal. However, the two sides still remain divided on what that package will look like. “Sadly, this phone call made clear that Democrats and the White House continue to have serious differences understanding the gravity of the situation that America’s working families are facing,” Pelosi said in a statement. During testimony before a House panel, Mnuchin said he did not support a $2.2 trillion stimulus proposal from the Democrats. —Fred Imbert

Mortgage demand for homebuyers up 28% from last year

Data compiled by the Mortgage Bankers Association (MBA) showed homebuyer demand is up 28% on a year-over-year basis as people rush to buy homes amid low mortgage rates. This demand is also being driven by “activity from the spring, as well as households seeking more space in less densely populated areas,” said Joel Kan, an MBA economist. —Fred Imbert, Diana Olick

Peloton jumps on bullish call from JPMorgan

Shares of Peloton jumped more than 8% during premarket trading on Wednesday after JPMorgan called the stock a “top pick.” The firm established a December 2021 price target of $105, which is the highest on the Street, and is about 25% above where shares currently trade. “We continue to like shares into earnings and believe there is significant upside potential to consensus estimates both near and long term,” JPMorgan said. 

Shares of the exercise equipment maker have surged 194% this year amid strong demand during the pandemic. – Pippa Stevens 

AMC jumps 13% after announcing reopening plan

Shares of AMC Entertainment jumped more than 13% in premarket trading on Wednesday after the cinema operator said 70% of its U.S. theaters will be open by Friday with about 140 additional locations resuming operations this week. The company said it expects to make announcements about further reopenings in California, New Jersey and other areas of the country in the coming weeks. The stock has rebounded 50% in the past month. — Yun Li

Macy’s jumps 5% after earnings

Shares of Macy’s popped more than 5% in premarket trading on Wednesday after the department store reported a surprise jump in online sales in the second quarter even as its stores started to reopen during the pandemic. Macy’s digital sales surged 53% from a year ago, which helped it report a narrower loss and higher overall revenue than analysts were expecting. The company reported a quarterly loss of 81 cents per share, better than the $1.77 per share expected, according to Refinitiv. Its revenue came in at $3.56 billion, versus $3.48 billion expected.— Yun Li 

Dow futures jump 170 points as market builds on strong September start

U.S. stock futures were broadly higher on Wednesday as traders added to their strong gains at the start of the new month. Dow Jones Industrial Average futures were up by 175 points, or 0.6%. S&P 500 futures climbed 0.7% and Nasdaq 100 futures advanced 1%. Apple was among the big gains contributors in the premarket, rising more than 2%. Wall Street was coming off a strong session in which the S&P 500 and Nasdaq hit record highs on the first day of September. To be sure, September has historically been a tough month for the market. —Fred Imbert

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