U.S. Stocks Extend Two-day Losses, Tesla Drops 6%

Barry Adams
02 Apr, 2024
New York City

U.S. stocks declined for the second day in a row, and yields on Treasury notes approached three-month highs after a string of data points highlighted a resilient economy. 

The S&P 500 index and the Nasdaq Composite fell close to 1%, and the yield on 10-year Treasury notes advanced to a three-month high of 4.39%. 

Investors are scaling back expectations of interest rate cuts as early as June after the personal consumption expenditures price index eased but stayed sharply higher than the Fed's 2% target rate. 

Moreover, a private survey showed manufacturing activities were ahead of the market's expectations in March. 

Total construction activities, private and public, in February also rose more than expected from a year ago, indicating resilient economic conditions. 

Investors are also awaiting the release of the JOLT job openings report and the factory orders report later in the day. 

 

U.S. Indexes and Yields

The S&P 500 index decreased 0.8% to 5,200.07, and the Nasdaq Composite fell 1.2% to 16,198.84. 

The yield on 2-year Treasury notes increased to 4.73%, 10-year Treasury notes inched up to 4.39%, and 30-year Treasury bonds edged up to 4.53%.

WTI crude oil increased $1.12 to $85.01 a barrel, and natural gas prices decreased 4 cents to $1.78 a thermal unit.

Gold jumped to a record high on the hopes that the U.S. Federal Reserve is more likely to lower interest rates after the release of the weaker-than-expected PCE Price Index. 

Moreover, elevated geopolitical tensions in the Middle East and the ongoing war in Ukraine contributed to market anxieties.

Gold increased by $6.41 to $2,256.04 an ounce, and silver rose 4 cents to $25.01. 

The dollar index, which weighs the U.S. dollar against a basket of foreign currencies, edged lower to 104.93.

 

U.S. Stock Movers

Health insurance stocks fell sharply after the Centers for Medicare and Medicaid Services finalized its capitation rates to 3.7% for financial year 2025, matching the rate in financial year 2024. 

Humana dropped 10.9% to $313.0, CVS Health fell 6.5% to $74.49, UnitedHealth Group declined 4.3% to $468.54, and Cigna Group eased 1.9% to $357.32 on the worry that operating margin will remain under pressure. 

Payments from the government to Medicare Advantage plans are expected to increase on average by 3.70%, or over $16 billion, from 2024 to 2025. 

The federal government is projected to pay between $500 and $600 billion in Medicare Advantage payments to private health plans in 2025.

PVH Corp. plunged 22% to $108.40 after the apparel maker and the parent company of popular brands Tommy Hilfiger and Calvin Klein offered a weak full-year outlook, citing weak macroeconomic conditions in Europe. 

General Electric Co. dropped 20% to $139.91 after the diversified conglomerate completed its three-way breakup, and its aerospace and energy business is scheduled to trade as a separate company starting Tuesday. 

Canoo Inc. plunged 30% to $2.68 after the management highlighted "substantial doubt" about the company's ability to continue as a going concern. 

Trump Media & Technology Group declined 1% to $48.16 and extended a two-day loss to more than 22% after the company reported a sharply higher quarterly loss in its latest quarter a day ago. 

Tesla declined 6.7% to $163.65 after the electric vehicle maker reported sharply lower deliveries in the first quarter. 

Tesla deliveries in the first quarter declined to 386,810 units from 412,376 units a year ago, and production eased to 433,371 units from 440.808 units a year ago.