Markets News, April 5, 2024: Stocks Rise; Treasury Yields Climb Following Jobs Report

Equity Indexes Wrap: Tech Leads Broad Market Rally; Tesla Misses Out Amid Entry-Level Model Uncertainty

April 05, 2024 04:11 PM EDT

The Dow

Amazon (AMZN) shares climbed 2.9% as a Wedbush survey showed nearly 60% of respondents intended to increase their spending on the platform in 2024, the most of any retailer in the survey.

Salesforce (CRM) and Microsoft (MSFT) added 2.6% and 1.8%, respectively, amid a broad rally that was led by tech. 

Apple (AAPL) shares ticked up 0.5% after the company said it would lay off more than 600 employees who had been working on its electric vehicle before the project was called off in February.

Johnson & Johnson (JNJ) stock was little changed after the company announced it would buy Shockwave Medical (SWAV) for $13.1 billion to enhance its cardiovascular treatment portfolio. The possibility of a deal had been reported in late March. 

Intel (INTC) slid 2.6%, falling for a fifth straight day as investors continued to digest its disappointing foundry business financials. 

The S&P 500

GE Aerospace (GE) rose 6.1% after it announced it would pay a 28-cent per share dividend, a 250% increase from the distribution it made before spinning off GE Vernova (GEV) earlier this week. 

Gold miner Newmont (NEM) climbed 5.1% as gold prices surged to a record high amid heightened tensions in the Middle East.

Arch Capital Group (ACGL) advanced 4.2% after it said it would buy Allianz’s MidCorp and Entertainment insurance businesses for $450 million.

Western Digital (WDC) rose 3.6% following an upgrade to buy by Rosenblatt Securities.

Uber (UBER) rose 3% as Jefferies raised its price target on the stock.

Packaged food stocks slid as markets embraced risk. Lamb Weston (LW) fell 2.2%, Campbell Soup (CPB) shed 1.6%, and Hormel Foods (HRL) slid 1.4%. 

The Nasdaq 100

Semiconductor stocks advanced as investors pivoted to growth following a strong jobs report. Meta (META) gained 3.2%, while Advanced Micro Devices (AMD) rose 2.8% and Nvidia (NVDA) climbed 2.5%. 

Tesla (TSLA) fell 3.6% amid reports it had scrapped plans to introduce an entry-level model. CEO Elon Musk denied the reports.

Tesla Stock Unmoved by Musk’s Denial of Reportedly Canceled Entry-Level EV Plans

April 05, 2024 03:34 PM EDT

Tesla (TSLA) shares were nearly 4% lower in intraday trading Friday as CEO Elon Musk denied a Reuters report that the electric vehicle (EV) maker abandoned its longstanding plan to build a low-priced car, posting on his social media platform X, “Reuters is lying (again).”

Musk has said for years that Tesla’s long-term goal was to produce affordable EVs. In the company’s 2006 Master Plan, he wrote, “Our long term plan is to build a wide range of models, including affordably priced family cars.”

Reuters noted Musk confirmed its reporting during an analyst call in January that Tesla was set to begin manufacturing its next-generation EV at its Texas gigafactory in the second half of 2025. Reuters said that the car, expected to be called the Model 2, would have a starting cost of about $25,000, about $14,000 below its lowest-priced EV now, the Model 3. 

Tesla did not immediately respond to a request for comment.

Shares of Tesla were down 3.4% at $165.32 later in the session Friday and have lost one-third of their value so far in 2024.

–Bill McColl

Fed’s Bowman Warns Hikes Could Still Be in the Cards; Markets Shrug

April 05, 2024 02:47 PM EDT

Citing the risks of long-term inflation on the economy, Federal Reserve Governor Michelle Bowman held open the possibility of further rate hikes in prepared comments given at the Manhattan Institute in New York.

“While it is not my baseline outlook, I continue to see the risk that at a future meeting we may need to increase the policy rate further should progress on inflation stall or even reverse,” she said.

While there was progress on inflation last year, she said it was still unclear whether that would continue into 2024, she said. The Fed was still not at a point where it was “appropriate” to lower interest rates, she added.

Bowman’s comments echoed those of Dallas Fed President Lorie Logan who, speaking at Duke University, described January’s inflation report as “disappointing” and February’s data as “better,” but still not great.

“I believe it’s much too soon to think about cutting interest rates. I will need to see more of the uncertainty resolved about which economic path we’re on,” Logan said.

Bowman’s comments, some of the most hawkish this year from an FOMC member, fell on deaf ears on Wall Street. Stocks, which climbed throughout the morning, have held onto much of their gains in afternoon trading, and Treasury yields have settled about 6 basis points above where they started the day.

–Terry Lane

Uber Stock Gets Bump From Jefferies Price-Target Increase

April 05, 2024 02:19 PM EDT

Uber Technologies (UBER) shares rose Friday after Jefferies research analysts raised their price target on the stock to $100 from $95, citing the company’s continued creation of ways for people to use the app, particularly in its Mobility division.

Compared with early in the company’s life when it only had a few Mobility options like Uber Black or UberX, Jefferies analysts noted that Uber now has approximately 20 methods users can use to reserve trips, which can help build the app’s customer base. The company operates in two sectors, ridesharing and food delivery, each with addressable markets of about $1 trillion, and analysts wrote that Uber only has about 5% penetration into each market, leaving massive room for growth.

Uber stock rose almost 4% to $77.81 Friday afternoon, and has gained 26% so far in 2024 and about 150% in the last 12 months.

–Aaron McDade

Gold Hits New Record and Oil Climbs as Geopolitical Jitters Linger

April 05, 2024 01:32 PM EDT

Gold futures surged to a fresh record Friday, even as Treasury yields climbed following robust U.S. jobs data. 

Gold traded just shy of $2,350 a troy ounce Friday afternoon, bringing its year-to-date return to more than 13%. 

Prices have been buoyed by escalating geopolitical tensions, which have led some investors to seek shelter in traditional safe-haven assets like gold and Treasury debt. 

A suspected Israeli airstrike on the Iranian embassy in Syria, and Iran’s vow to retaliate, have amplified the threat of Israel’s war in Gaza spilling over and engulfing the region in a wider conflict.

That has sent oil prices surging—with Brent crude rising above $91 a barrel today after surging past $90 yesterday—threatening to drive up gas prices and reaccelerate U.S. inflation.

Gold prices have flown in the face of conventional wisdom, which says rising Treasury yields should weigh on gold, which acts as a store of value but offers no investment yield. Yet gold has surged in the last month while yields have climbed amid concerns the Fed’s progress against inflation has stalled.

J&J Acquires Shockwave Medical to Boost Its Cardiovascular Treatment Portfolio

April 05, 2024 01:09 PM EDT

Johnson & Johnson (JNJ) announced Friday it was buying Shockwave Medical (SWAV) for $13.1 billion in cash, pushing shares of the maker of cardiovascular catheters to near all-time highs.

J&J said it was paying $335 each for all of Shockwave’s outstanding shares, a 4.7% premium over their closing price Thursday. Shockwave shares jumped 10% to $316 on March 26 after the Wall Street Journal reported the two companies were discussing a deal.

Shockwave shares were up 2% at $326.44 early Friday afternoon, bringing their gains this year to about 71%. J&J shares were little changed, and are down about 3% this year.

–Bill McColl

GE Aerospace, Separated From Energy Business, Takes Off

April 05, 2024 12:26 PM EDT

Shares of GE Aerospace (GE), the leftovers of a broken-up General Electric, surged Friday, leaving shares of its spun-off energy business in the dust.

GE Aerospace shares were up nearly 5% midday Friday, after gaining more than 5% in the three days since its split with GE Vernova (GEV), General Electric’s energy business. The stock’s performance stands in stark contrast to Vernova’s, which traded at $125.10 midday Friday, about 13% below its opening price of $142.85 on its first day of trading Tuesday.

In the year leading up to Tuesday’s split, GE shares gained more than 83%. GE Aerospace, having retained the “GE” ticker, could be benefiting from that momentum. The stock may also be boosted by the perception that it, having retained the legacy ticker, is the business shareholders actually bought into.

Though, business fundamentals are likely also at play. In the fourth quarter of 2023, GE Aerospace grew revenue by 10% and reported a $1.6 billion profit. GE Vernova, meanwhile, grew renewable energy revenue by 23% but still reported a net loss of $347 million. Its power business posted a profit of $759 million. 

Western Digital Receives Analyst Upgrade on Projected Memory Chip Growth

April 05, 2024 11:34 AM EDT

Western Digital (WDC) shares surged before paring back some gains in early trading Friday as Rosenblatt upgraded its stock and raised its price target, anticipating an increase in demand for the company’s flash memory chips.

Rosenblatt analyst Kevin Cassidy wrote that Western Digital could benefit from an expected increase in price around the industry for the type of memory chips it makes, upgrading the stock to “buy” from “neutral,” and raising its price target to $115 from $65.

“Our upgrade of WDC to a Buy recommendation is anchored on the strengthening NAND Flash market, with expected 15%+ sequential price increases in 2Q24, driven by rising demand, low inventories, and controlled capacity,” Cassidy wrote.

Western Digital shares were up about 2% as markets opened Friday before paring back some gains. They were 1.4% higher at $71.55 late Friday morning. Shares are up about 47% so far this year and have more than doubled in value over the last 12 months.

–Aaron McDade

Apple Stock in Focus After Announcing First Major Headcount Cut Since Pandemic

April 05, 2024 10:20 AM EDT

Apple (AAPL) shares inched higher in early trade Friday after the iPhone maker revealed late Thursday via state regulatory filings that it had slashed more than 600 jobs in California, marking the tech giant’s first major headcount reduction since the pandemic

According to eight filings cited by Bloomberg lodged with the California Employment Development Department, 614 employees were let go from Apple’s Santa Clara main car-related office, its next-generation screen development facility, and from its smaller satellite offices most likely used to protect the tech giant’s secretive projects.

Apple follows in the footsteps of other mega-cap tech companies that have downsized their global workforces this year in a post-pandemic staffing rebalancing amid uncertainty over the macroeconomic outlook.

Apple’s share price forged two distinct peaks between July and December last year, raising the possibility the stock is carving out a broad double top pattern. Moreover, the 50-day moving average crossed below the 200-day moving average last month to form a death cross—a bearish chart signal that often precedes a new downtrend.

Looking ahead, investors should closely monitor the pattern’s neckline, which sits around $166.50. A breakdown below this closely watched level would confirm the double top, potentially opening the door for further near-term falls.

Apple shares were up 0.6% at $169.30 Friday morning. They have lost about 12% of their value so far this year.

–Timothy Smith

Stocks Making the Biggest Moves Premarket

April 05, 2024 09:24 AM EDT

Gains: 

• Krispy Kreme Inc. (DNUT): Shares of the donut maker jumped 5% after analysts at Piper Sandler upgraded the stock to buy, citing its recent deal with McDonald’s as a “game changer.”
• Western Digital Corp. (WDC): Shares of the data storage device maker rose about 4% after Rosenblatt Securities upgraded the stock to buy on its potential to benefit from rising demand and prices for memory chips. 
• Shockwave Medical Inc. (SWAV): Shares of the medical device maker rose about 2% after Johnson & Johnson (JNJ) offered to buy the company for $13.1 billion. Shockwave shares jumped in late March when a potential deal was first reported. 
• Apple Inc. (AAPL): Shares of the tech giant ticked up about 0.5% after it said it had laid off about 600 employees who formerly worked on its abandoned electric vehicle project. 

Losses:

• Enphase Energy Inc. (ENPH): Shares of the energy technology company slid more than 3% after Chief Commercial Officer David Ranhoff announced his departure effective June 30. 
• Coinbase Global Inc. (COIN): Shares of the cryptocurrency exchange slid 2% while cryptocurrency prices slumped as markets went risk off. 

Futures Rise Ahead of March Jobs Report

April 05, 2024 08:14 AM EDT

Futures contracts connected to the Dow Jones Industrial Average were up 0.3% in premarket trading on Friday.

S&P 500 futures traded 0.4% higher.

Nasdaq 100 futures were also up 0.4% about an hour and a half before markets opened.