Market Overview
The stock market experienced a downturn, with the S&P 500 (-0.3%), Nasdaq Composite (-0.3%), and Dow Jones Industrial Average (-0.4%) all closing lower despite a slight recovery in the last 30 minutes of trading. The Russell 2000 saw a more significant drop, falling by 2.0%.
Treasury Market and Economic Data
Attention was drawn to the Treasury market as yields approached their February highs. The yield on the 2-year note increased by seven basis points to 4.69%, and the 10-year note yield rose by 11 basis points to 4.30%. This movement was largely in response to the February Producer Price Index (PPI) report, which came in hotter than expected. Other contributing factors included a slightly weaker than anticipated February retail sales report, though it showed an improvement from the previous month, and jobless claims data indicating continued strength in the labor market.
Sector Performance
- The real estate sector was the hardest hit, dropping by 1.6%, followed by the utilities sector, which declined by 0.8%.
- Conversely, the energy sector saw a rise of 1.1%, buoyed by increases in WTI crude oil futures ($81.23/bbl, +1.49, +1.9%) and natural gas futures ($1.74/mmbtu, +0.08, +4.8%).
Notable Stock Movements
Some major companies managed to post gains, providing limited support to the market. Noteworthy performers included Apple (AAPL, Financial) with a 1.1% increase, Microsoft (MSFT, Financial) rising by 2.4%, Amazon.com (AMZN, Financial) up by 1.2%, and Alphabet (GOOG, Financial) gaining 2.5%.
Year-to-Date Performance
- S&P 500: +8.0% YTD
- Nasdaq Composite: +7.4% YTD
- S&P Midcap 400: +5.2% YTD
- Dow Jones Industrial Average: +3.2% YTD
- Russell 2000: +0.2% YTD
Economic Data Highlights
- February PPI rose by 0.6%, surpassing the 0.3% consensus, driven by goods inflation.
- February Retail Sales increased by 0.6%, slightly below the 0.7% consensus, indicating a rebound from January's downturn.
- Weekly Initial Claims were reported at 209K, better than the 218K consensus, suggesting a robust labor market.
Looking Ahead
Friday's economic calendar includes data on import and export prices, industrial production, capacity utilization, and the preliminary March University of Michigan Consumer Sentiment.
Today's News
The Food and Drug Administration (FDA) made a historic decision by approving Madrigal Pharmaceuticals' (MDGL, Financial) resmetirom, marking the first U.S. approval for a treatment of nonalcoholic steatohepatitis (NASH). This approval is a significant milestone in addressing a critical unmet medical need in liver health. Madrigal's shares, however, were on hold for trading following the announcement.
Adobe (ADBE, Financial) experienced a decline of approximately 6% in after-hours trading despite reporting quarterly results that exceeded expectations. The company's guidance for the future, however, did not meet Wall Street's forecasts, causing concern among investors. Adobe also announced a new stock repurchase program, authorizing up to $25 billion in common stock repurchases through March 2028.
Ulta Beauty (ULTA, Financial) released its quarterly earnings, showcasing a stronger-than-expected performance with a 9.9% year-over-year increase in revenue. The company also provided an optimistic outlook for the fiscal year 2024, projecting net sales between $11.7 billion and $11.8 billion. Despite the positive report, Ulta Beauty's shares saw a 2.55% decrease.
Apple (AAPL, Financial) has reportedly acquired Canadian AI startup DarwinAI to bolster its generative AI capabilities. This move is part of Apple's efforts to compete more effectively in the AI space against giants like Microsoft (MSFT, Financial) and Google (GOOGL).
Ares Capital (ARCC, Financial) ended its 6-day winning streak with a 1.53% drop in its stock value. The company had been performing well in the market, but this recent decline reflects the volatile nature of stock trading.
The FDA's panel of independent experts voted in favor of Geron's (GERN, Financial) blood cancer therapy, imetelstat, potentially paving the way for its approval. This positive vote is a crucial step forward for Geron in bringing its therapy to patients in need.
Eastman Kodak (KODK, Financial) reported a decrease in revenue for the fourth quarter, alongside a slight decline in net income. Despite these challenges, the company is making strides in improving its financial position and operational efficiency.
Altria (MO, Financial) announced its plans to sell 35 million shares of Anheuser-Busch InBev (BUD) through a global secondary offering. This move is part of Altria's strategy to optimize its investment portfolio and enhance shareholder value.
Valero (VLO, Financial) continued its upward trajectory, closing in the green for the seventh consecutive day. The company's stock has been performing well, reflecting the positive sentiment in the energy sector.
PagerDuty (PD, Financial) and UiPath (PATH, Financial) both reported their quarterly earnings, with mixed reactions from the market. While PagerDuty's shares declined, UiPath saw a drop despite positive comments from analysts.
Cardlytics (CDLX, Financial) also shared its quarterly performance, with a slight increase in revenue. The company is optimistic about its growth prospects and has provided guidance for the first quarter of 2024.
Boeing (BA, Financial) faced another challenge as a 787-9 flight experienced a sudden drop, leading to an investigation into the incident. This adds to the ongoing concerns about the safety of Boeing's aircraft.
Lastly, the information technology sector saw a marginal increase in short bets, with Enphase Energy (ENPH, Financial) being the most shorted stock. This reflects the cautious stance of investors towards the tech sector amidst a volatile market environment.
GuruFocus Stock Analysis
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