Wall Street Today | Tech Giants Retreat Again, Fueling Stock Selloff
RECAP
Stocks declined for a second day, weighed down by declines in tech giants that previously lifted major indices higher in 2023.
The tech-heavy $Nasdaq Composite Index(.IXIC.US$ lost 1.2% to 14,592.21, building on its worst daily performance since October. The $S&P 500 Index(.SPX.US$ declined 0.8% to 4,704.81, while the $Dow Jones Industrial Average(.DJI.US$ fell 0.8% to 37,430.19.
Software stocks tracked by moomoo slid 1.9% while shares of semiconductor companies lost 1.8%, making the two sectors the day's biggest losers. $Apple(AAPL.US$, the largest company by market cap, also fell for a second day, fueling the downtrend across the stock market.
MACRO
Unusually Elevated Uncertainty
Federal Reserve officials cited an "unusually elevated degree of uncertainty" that could cloud their outlook for interest rate cuts by the end of 2024, according to the Federal Open Market Committee meeting minutes.
Officials viewed the policy rate as likely at or near its peak for this tightening cycle, though the actual trajectory of borrowing costs will depend on economic data, the minutes show.
While their baseline projections implied lower federal funds rate by the end of this year, officials noted that "it was possible that the economy could evolve in a manner that would make further increases in the target range appropriate."
The minutes reinforced Richmond Federal Reserve President Tom Barkin's statement earlier Wednesday that economic data will determine the timing and pace of any change to interest rates this year. The potential for more rate hikes remains on the table, especially if the U.S. economy continues to defy expectations with strong growth in 2024, Dow Jones reported, citing Barkin's remarks before the Chamber of Commerce in Raleigh, North Carolina.
Lowest Job Openings Since Early 2021
Job openings fell in November to the lowest since early 2021 while the number of people quitting their jobs declined, signaling weakening confidence that employees can get higher wages by seeking work elsewhere.
The tight labor market has spurred wage hikes, adding to price pressures that helped fan inflation since 2021. Policymakers and investors are looking for signs of such pressure easing to help strengthen the case for interest rate cuts this year.
US manufacturing contracted in December for a 14th straight month, according to data released by the Institute of Supply Management Wednesday. The new orders index remained in contraction territory at 47.1%, down from 48.3% in November, it said.
SECTORS
Crude Oil Gains
Crude oil advanced 3.6% after reports that Libya's largest oilfield has been shut down due to protests at a time when tensions in the Middle East are threatening to disrupt deliveries of the fuel.
Before Wednesday, oil prices have been on a downtrend as concerns over weakening demand and increasing production in countries outside of the Organization of Petroleum Exporting Countries (OPEC) and its partners have overshadowed shipping disruptions in the Red Sea and the threat of a wider war in the Middle East.
COMPANIES
Nvidia, AMD Slip
Semiconductor companies slipped led by $Advanced Micro Devices(AMD.US$ and $NVIDIA(NVDA.US$ amid a broad market selloff. The PHLX Semiconductor Index sank 2%. Sector leader $NVIDIA(NVDA.US$, which is the fifth largest U.S. company, shed 1.2%, while AMD slipped 2.4%.
Airline Stocks Pull Back
$American Airlines(AAL.US$ shares fell for a seventh session, retreating after a 24% rally in the past two months. Other airline stocks also declined Wednesday, with $JetBlue Airways(JBLU.US$ slumping 6.5%, and $Delta Air Lines(DAL.US$ sliding 4.2%. $Southwest Airlines(LUV.US$ slipped 4.1% as $United Airlines(UAL.US$ shares dropped 2.9%.
Retailers Retreat
$Nordstrom(JWN.US$, $Kohl's Corp(KSS.US$ and other retailers fell sharply Wednesday as the sector continued to give back huge gains that it rang up during a November/December rally. The S&P Retail Select Industry Index fell for four straight sessions, reversing course after a huge rally seen in the past two months
Suncor Output Fuels Gains
$Suncor Energy Inc(SU.CA$ shares rose after the company said it met its upstream production guidance of 746,000 barrels per day for full-year 2023, after output reached 808,000 bbls/d in the fourth quarter.
$Voyager Therapeutics(VYGR.US$ climbed 20% Wednesday, extending this week's rally that was fueled by the company's recent license pact with a unit of Novartis AG. On Tuesday, Voyager shares surged as much as 39% after the company said it will receive $100 million up front as part of the agreement. Voyager will also be eligible to get as much as $1.2 billion in payments as preclinical, development and regulatory and sales milestones are met under the pact for its TRACER capsids.
Source: Bloomberg, Dow Jones, CNBC, Reuters
Disclaimer: Moomoo Technologies Inc. is providing this content for information and educational use only.
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SpyderCall 71752472: Why do you say that? Have you been taking losses recently? It happens to the best of us sometimes...
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