4:11pm: Apple drops on Barclays downgrade
The Dow closed Tuesday up 26 points, less than 0.1%, at 37,715, the Nasdaq Composite fell 245 points, 1.6%, to 14,766 and the S&P 500 slid 27 points, 0.6%, to 4,743. The small-cap Russell 2000 index dipped 22 points, 1.1%, to 2,005.
Investors likely engaged in a bit of profit-taking, particularly in the tech sector. After a sustained rally to close out 2023, the Nasdaq suffered its worst trading day since October.
Among the laggards was Apple, shares of which fell 3.6% after Barclays downgraded the company to an Underweight rating.
12:00pm: Blue-chips rally but tech remains out of favour
Blue-chips rallied as lunch approach, led by gains in pharmaceuticals stocks, but it remains a day to forget for technology issues.
At noon, the Dow Jones Industrial Average was up 15.49 points at 37,705.03, the S&P 500 was down 24.01 points at 4,745.82 and the Nasdaq Composite was down 191.44 points at 14,819.92.
Moderna shares surged 13% after the vaccine maker's CEO Stéphane Bancel said in a shareholder letter that the company expects its sales to grow in 2025.
"With the expected launch of our RSV vaccine candidate in 2024, and potential launch of our flu/COVID combination vaccine as early as 2025, we believe Moderna will experience sales growth in 2025," said Bancel.
The news seemed to act as a boost across the sector with Pfizser, Bristol-Myers and Merck among those heading north.
Chevron rose 1.0% reflecting the rise in the oil price, shrugging aside news it would record a fourth-quarter impairment loss of up to $4 billion due to regulatory challenges in California and certain oil and gas production facilities in the Gulf of Mexico.
9:44am: Tech tumbles in weak start to the year
Stocks started 2024 firmly in the red as the end of year rally in tech stocks petered out.
Shortly after the opening bell, the Dow Jones Industrial Average was down 105.60 points, 0.3%, at 37,583.94, the S&P 500 was down 33.88 points, 0.7%, at 4,735.95 and the Nasdaq Composite was down 211.67, 1.4%, at 14,799.69.
Leading tech stocks took a breather following the strong end to 2023, with Apple down 2.5% after the Barclays downgrade to ‘underweight’ and Tesla losing 0.9% after fourth quarter delivery figures.
The quarter saw Tesla lose its spot as the world’s top-selling electric vehicle manufacturer to Chinese group BYD.
Elon Musk’s firm delivered 484,500 cars in the fourth quarter, more than the 483,000 forecast, but it was surpassed by BYD, which sold 526,400 vehicles in the same period, outperforming the US manufacturer for the first time.
Another EV maker, Rivian plunged 7.4% after the California-based company, which produces its cars in Illinois, delivered 13,972 EVs in the final three months of 2023, missing analyst expectations of 14,114.
7:00am: Markets set to open New Year on the back foot
Stocks are expected to start 2024 on the back foot ahead as investors look ahead to key economic data on the health of the labour market.
In pre-market trading, futures for the Dow Jones Industrial Average were down 0.3%, while those for the S&P 500 were 0.5% lower and contracts for the Nasdaq 100 futures declined 0.8%.
Joshua Mahony at Scope Markets said this week looks to bring traders back to their desks “with a bang, as we buckle up for a raft of data that should help shape expectations after a period of bullish exuberance.”
“The recent pricing around Federal Reserve easing looks to have gone a step too far, with the Dot Plot mapping out three hikes this year rather than the six cuts expected by the markets,” he suggested.
He thinks Wednesday’s Federal Reserve meeting minutes could help hammer home “the disparity that currently exists between market and Fed rate expectations.”
Later in the week, investors will have non-farm payroll figures to review with job vacancy, ADP payroll and weekly jobless claims figures before then.
Stocks to watch include Apple, down 1.8%, after Barclays downgraded to ‘underweight’ on expectations of soft demand for its latest iPhone.
““We expect reversion after a year when most quarters were missed and the stock outperformed,” the analysts wrote in a note on Tuesday, reported by Bloomberg.
“Our checks remain negative on volumes and mix for iPhone 15, and we see no features or upgrades that are likely to make the iPhone 16 more compelling.”