04/02/2024
Stocks Today: Wall Street retreats as yields rise, Tesla dampens sentiment (midday)
Key points:
1. U.S. health insurance companies drop after disappointing Medicare rates
2. Tesla’s stock price fell after its first-quarter delivery volume fell short of targets
3. Calvin Klein parent company PVH drops on poor fiscal year revenue forecast
【Economic data】
Wall Street's main indexes fell on Tuesday, weighed down by U.S. Treasury yields and Tesla Inc., as recent strong economic data added to uncertainty over the timing of the Federal Reserve's rate cuts.
The ISM climbed above 50 points for the first time in 17 months, which should be a good thing as it shows the resilience of the US economy, but markets took a negative view as it dampened hopes of a rate cut in June.
For now, fundamentals support rates remaining on hold and could even move higher.
The CBOE Volatility Index (VIX), also known as Wall Street's "fear gauge," hit a more than two-week high.
Data on Tuesday showed new orders for U.S. manufactured goods rebounded more than expected in February, while U.S. job openings remained at elevated levels.
The focus now is Friday's U.S. nonfarm payrolls data, which is likely to show job growth slowed in March even as average earnings rose from the previous month.
【market】
Rate-sensitive growth stocks including Nvidia (NVDA), Microsoft (MSFT) and Amazon (AMZN) fell 0.7% to 1.4% as the U.S. 10-year Treasury note yield rose to 4.365%, its highest level this year.
Tesla (TSLA) shares also fell 5.0% as the automaker's first-quarter deliveries fell short of market expectations.
Shares of UnitedHealth (UNH), CVS Health (CVS), and Humana (HUM) fell 7.5% to 14.1 as the U.S. government kept reimbursement rates for Medicare Advantage health plan providers unchanged, which hit insurers. %.
As of 2:00 p.m. ET, the Dow Jones was down 1.19%, the S&P was down 0.9%, and the Nasdaq was down 1.14%
Nine of the 11 major S&P 500 sectors were lower, led by the Healthcare Index (SPXHC), which fell 1.9% and was on track for its biggest percentage loss this year.
Shares of Calvin Klein parent company PVH Corp (PVH) fell 23.3% after the retailer forecast first-quarter revenue to fall about 11%. Peer Ralph Lauren (RL) fell 5.1%.
Cryptocurrency and blockchain-related stocks fell, with Bitcoin falling more than 6%. Exchange operator Coinbase (COIN), Bitcoin investor MicroStrategy (MSTR) and crypto miner Riot Platforms (RIOT) fell between 3.5% and 8.0%.
Declining issues outnumbered advancing ones on the NYSE at a 4.77-to-1 ratio and on the Nasdaq, declining issues outnumbered advancing ones at a 4.40-to-1 ratio.
The S&P recorded 22 new 52-week highs and 3 new lows; the Nasdaq recorded 39 new highs and 93 new lows.