Stock market today: Live updates

Morningstar said all three of the homebuilding stocks it covers “look fully valued according to our metrics today,” including two that Warren Buffett’s Berkshire Hathaway this week disclosed buying in the second quarter.

Berkshire bought $726 million worth of D.R. Horton shares, $70 million worth of NVR shares and $17.2 million of Lennar in the second quarter, according to its latest 13F to the SEC.

Morningstar analyst Brian Bernard rates D.R. Horton three stars and pegs its fair value at $120 a share, below Wednesday’s price of about $123; Morningstar also gives Lennar only three stars and puts its fair value at $133, about 8% above Wednesday’s level; and Toll Brothers three stars and a price target of $76, more than 5% below where Toll recently traded. Morningstar doesn’t cover NVR.

Morningstar sees total housing starts falling 17% in 2023 to 1.295 million units, single-family starts down 18% to 825,000 units and multifamily starts off 14.5% to 470,000 units, analyst Susan Dziubinski wrote.

— Scott Schnipper, Michael Bloom

The retail earnings reports coming in the back half of August provide upside potential for investors through options trades, according to the Goldman Sachs derivatives research team.

Analyst Sesha Phani said in a note to clients on Wednesday that Bath & Body Works, Macy’s and Nordstrom were all call-option long candidates ahead of their earnings reports next week. Goldman analysts are optimistic about the management strategies for all three companies despite a choppy retail environment.

By purchasing call options, investors can capture the upside of a stock if it rallies on the heels of the report, while limiting the downside risk if the results are worse than expected.

— Jesse Pound

Goldman Sachs downgraded two real estate investment trusts, Tanger Factory Outlet Centers and Kimco Realty, to neutral from buy on Wednesday.

Tanger’s funds from operations (FFO) multiple has expanded 74% over the last 12 months, its stock price has significantly outperformed consensus estimate revisions and its multiple is near the multiple- to-growth trend line across REITs, analyst Caitlin Burrows wrote in a note to clients.

Burrows also expects Kimco’s FFO growth to be more limited than previously thought. While its FFO growth will accelerate over 2024 and 2025, it will lag that of its retail peers, she said.

Shares of Tanger Factory Outlet are up nearly 34% year to date, while Kimco Realty has last nearly 9%.

— Michelle Fox

Utilities and consumer staples led the S&P 500 on Wednesday afternoon, up 0.71% and 0.26%, respectively. Financials closely followed, up 0.25%.

Power generation company AES Corporation led the utilities sector in afternoon trading with a 2.8% gain. Consolidated Edison and Public Service Enterprise were also higher by about 1.5%. Target led consumer staples, trading 3.7% higher after its second-quarter earnings beat expectations.

Communication services was the major laggard in the broad-based index, down 0.7%. The sector was dragged down by media titans Paramount, Netflix and Comcast. Facebook parent Meta and Match Group were also posting losses of at least 1%.

— Pia Singh

Deutsche Bank found in a survey that Anheuser-Busch InBev’s Bud Light is regaining favor after the drama surrounding its decision to use a transgender influencer in marketing.

The survey showed a falling share of beer drinkers no longer buying the brand between July and August, analyst Mitch Collett said in a note to clients Wednesday. And former Bud Light drinkers who say they are very unlikely to buy the brand in the next three to six months has fallen significantly.

Other brands that have benefited from Bud Light’s losses also showed less gains for the switches among consumers in August than July, he added.

Also on Wednesday, Target CEO Brian Cornell said “negative reaction” to the retailer’s pride-themed collection weighed on sales.

— Alex Harring

The minutes from the Federal Reserve’s July minutes pointed toward “upside risks” to inflation, which could lead to more rate hikes down the road.

“With inflation still well above the Committee’s longer-run goal and the labor market remaining tight, most participants continued to see significant upside risks to inflation, which could require further tightening of monetary policy,” the meeting summary stated.

— Fred Imbert, Jeff Cox

Weak economic data from China has rattled markets over concerns of weakening demand and a sluggish property market. Although the news soured investor sentiment during Tuesday’s trading session, Carson Group director and macro strategist Sonu Varghese believes the effects of the China’s worsening economy will be seen more in the bond market, rather than in equities.

“I don’t want to say we are insulated from what’s happening in China, but if anything I believe there will be more of an impact in the bond market,” said Varghese.

“If China’s economy is under pressure currencies under pressure, they would probably spend some of their reserves, or the state-backed commercial banks will probably use some of their foreign assets to defend the currency. It could have an impact on agency mortgage backed securities, because they do they have historically bought more of that,” Varghese continued.

To be sure, he noted mortgage rates are already are in the 7% range.

“We’re still seeing housing demand start to go up despite high mortgage rates, so I don’t think there’ll be a big impact directly on the industrial side of the economy, but maybe on the bond market at the margin,” he added.”

— Hakyung Kim

Wolfe Research’s Rob Ginsberg pointed to a worrying trend in the market: Stocks are losing momentum while in overbought conditions.

“This is exactly what we are seeing with the NASDAQ, as its weekly MACD triggered a sell signal, it’s first since last September, but more importantly to us, it’s first within a deeply overbought condition since early last year,” Ginsberg wrote. “The S&P is not quite there, but we would be very surprised if it doesn’t follow the NDX’s lead.”

— Fred Imbert, Michael Bloom

There were 11 new S&P 500 stocks that hit fresh lows during midday trading Wednesday. Among them, stocks such as Moderna and SolarEdge Technologies fell to their lowest levels since 2020.

Meanwhile, there were just four S&P 500 stocks that reached fresh highs: Comcast, the TJX Companies, Arthur J. Gallagher and Eli Lilly.

Here are the other names hitting fresh 52-week lows:

• Etsy trading at lows not seen since July, 2022
• Conagra Brands trading at lows not seen since Apr, 2020
• Campbell Soup Company trading at lows not seen since Mar, 2022
• Estee Lauder trading at lows not seen since May, 2020
• Kellogg trading at lows not seen since Mar, 2022
• Willis Towers Watson trading at lows July, 2022
• Illumina trading at lows not seen since Aug, 2017
• Moderna trading at lows not seen since Nov, 2020
• SolarEdge Technologies trading at lows not seen since July, 2020
• Sealed Air trading at lows not seen since Aug, 2020
• Eversource Energy trading at lows not seen since Mar, 2020

— Sarah Min, Chris Hayes

Investors will be looking for more clues about where interest rates are headed when the Federal Reserve releases minutes from its latest meeting at 2 p.m. Wednesday.

The Fed approved a 0.25 percentage point hike at the meeting, taking its key borrowing rate to a target range of 5.25%-5.5%, the highest level in more than 22 years. However, the post-meeting statement offered little guidance about what comes next, and Chairman Jerome Powell’s news conference featured conflicting views.

Markets overwhelmingly expect that the rate increase approved at the July 25-26 meeting will be the last, and several Fed officials in the past few weeks have made statements that seemingly bolstered that view.

However, others have noted that the central bank is well away from achieving its 2% long-run inflation goal and at the least will need to hold rates at a higher level.

—Jeff Cox

Stocks of some of China’s biggest companies declined Wednesday.

The iShares MSCI China ETF pulled back 1.4%. The China-focused fund is down nearly 7% for the year.

Tencent and JD.Com saw their shares fall on the back of their earnings announcements. Both companies’ shares declined by more than 2%. Alibaba and Baidu shares lost 2% and 2.8%, respectively.

The People’s Bank of China reduced interest rates from 2.65% to 2.5% on Tuesday, in what was the central bank’s second rate cut in three months. The country’s July economic data, also released Tuesday, missed analyst estimates and heightened concerns of slowing growth and deflations.

Tower Semiconductor shares slid 7% and touched a fresh 52-week low on Wednesday morning.

The action came after Intel announced a mutual agreement to end its $5.4 billion plan to acquire Tower. Intel cited the inability to obtain necessary regulatory approvals in a timely fashion as the driver.

Intel will pay Tower a termination fee of $353 million.

Read more about this development here.

–Darla Mercado, Arjun Kharpal

The surprising downturn in homebuilder sentiment on Tuesday could be a warning sign about the broader economy, according to Wolfe Research.

Strategist Chris Senyek said in a note to clients on Wednesday that the report — which saw the index fall to 50 in August from 56 in July — may show that the “all-time low affordability is finally starting to take a toll on sales activity and homebuilder sentiment.”

“Since the beginning of the pandemic, housing values have pushed up household wealth by +$12 trillion (vs. stocks at ‘only’ +$7 trillion). While one month doesn’t make a trend, a sustained drop in home prices has the potential to unwind the ‘virtuous mini-cycle’ that’s driven upside surprises & equity markets over the past six months,” the note said.

— Jesse Pound

Mizuho Securities says Chevron will continue to grow as oil prices climb.

The firm upgraded Chevron stock to buy on Wednesday. Analyst Nitin Kumar highlighted the company’s expansion of the Tengiz oilfield with the Wellhead Pressure Management.

“Although oil mix has trended below the long term 50% indicated by CEO Mike Wirth on the earnings call, we expect it to increase as new well productivity improves,” Kumar said.

Chevron shares gained 1.2% Wednesday morning.

CNBC Pro subscribers can read the full story here.

— Brian Evans

Despite the stock’s more than 200% surge this year, analysts remain bullish on Nvidia ahead of its quarterly print after the bell on Aug.23.

“There is clearly some hesitation to buy a name up ~200% this year but we believe the stock will look cheap exiting earnings as the Street moves to our $15+ EPS estimate next year on its way to $20+, as supply fills in,” said Barclays analyst Blayne Curtis in a recent note.

Read why analysts are going gaga for the stock here.

— Samantha Subin

Wells Fargo thinks GE HealthCare Technologies will benefit from the growth of a key Alzheimer’s drug which requires regular MRI use.

The firm initiated coverage of GEHC stock on Wednesday with an overweight rating. Shares rose 1.9% Tuesday morning.

“Based on our analysis of the number of patients on Alzheimer’s drugs in the US, EU and Japan, we estimate ~$47 mil of incremental revenues in 2024 (20 bps growth contribution) to GEHC,” Analyst Larry Biegelsen said.

CNBC Pro subscribers can read the full story here.

— Brian Evans

Shares of the U.S. cryptocurrency exchange Coinbase rose 2.9% after the National Futures Association, a CFTC-designated self-regulatory organization, cleared the company to operate a futures trading service alongside its existing spot crypto trading offering.

The global crypto derivatives market represents ~75% of crypto trading volume worldwide, according to Coinbase.

The approval comes as the industry watches for the Securities and Exchange Commission to approve several applications for spot bitcoin ETFs. The regulator has only allowed bitcoin futures ETFs to operate so far. Coinbase has surveillance sharing agreements with several of the funds awaiting a response, meant to address SEC concerns about market manipulation.

— Tanaya Macheel