Stocks Settle Mixed as Energy Stocks Gain while Tech Stocks Slip

What you need to know…

The S&P 500 Index ($SPX) (SPY) on Tuesday rose +0.10%, the Dow Jones Industrials Index ($DOWI) (DIA) rose +0.28%, and the Nasdaq 100 Index ($IUXX) (QQQ) fell -0.11%.

Stocks on Tuesday settled mixed, with the Nasdaq 100 falling to a 1-1/4 month low.  Energy stocks rose Tuesday and supported the overall market after WTI crude rose more than +1%.  Also, Adobe rose nearly +3% on earnings optimism.

On the negative side, Tesla fell more than -8% to a new 2-year low to lead technology stocks lower after Evercore ISI and Mizuho Securities cut their price targets on the stock, citing concerns about demand.  Also, General Mills closed down more than -4% after several analysts cited concern about continued volume declines reported in the company’s Q2 earnings release. 

Tuesday’s action by the BOJ to widen the upper limit of its 10-year yield target range to 0.50% from 0.25% pushed the 10-year Japan JGB bond yield to a 7-year high of 0.444%.  The surge in Japanese government bond yields also helped push other global government bond yields higher as the 10-year German bund yield rose to a 6-week high of 2.310%, and the 10-year UK gilt yield rose to a 6-week high of 3.658%. In addition, the 10-year T-note yield climbed to a 2-1/2 week high of 3.707%. 

Tuesday’s U.S. housing news was mixed for stocks.   Nov housing starts fell -0.5% m/m to 1.427 million, stronger than expectations of a decline to 1.400 million.  However, Nov building permits, a proxy for future construction, tumbled -11.2% m/m to a 2-1/2 year low of 1.342 million, weaker than expectations of 1.480 million.

Today’s stock movers…

Energy stocks and energy service providers rallied Tuesday after the price of WTI crude rose more than +1%.  Schlumberger (SLB) and Haliburton (HAL) closed up more than +3%.  Also, Baker Hughes (BKR), ConocoPhillips (COP), and Phillips 66 (PSX) closed up more than +2%.  In addition, Chevron (CVX), Hess Corp (HES), Marathon Petroleum (MPC), Valero Energy (VLO), and Exxon Mobil (XOM) closed up more than +1%. 

Moderna (MRNA) closed up more than +5% to lead gainers in the S&P 500 and Nasdaq 100 after data from Bloomberg showed the Franklin Biotechnology Discovery Fund boosted its holdings of Moderna by 27% to 124,315 shares. 

Trade Desk (TTD) closed up more than +5% after Piper Sandler initiated coverage of the stock with a recommendation of overweight and a price target of $60.

Adobe (ADBE) closed up more than +2% on increased earnings optimism after 13 analysts raised their price targets on the stock by an average of 8.6% since Adobe reported earnings last Thursday.

Arch Capital Group (ACGL) closed up more than +2% after it increased its share buyback authorization to $1 billion.

Tesla (TSLA) closed down more than -8% at a 2-year low to lead losers in the S&P 500 and Nasdaq 100 after Evercore ISI and Mizuho Securities cut their price targets on the stock, citing concerns about demand.

Factset Research Systems (FDS) closed down more than -5% after reporting Q1 revenue of $504.8 million, weaker than the consensus of $509.2 million.

General Mills (GIS) closed down more than -4% to lead losers in the S&P 500 after several analysts cited concern about continued volume declines reported in the company’s Q2 earnings release. 

Gilead Sciences (GILD) closed down more than -1% after it reported disappointing data from a mid-stage study of drug cocktails in fighting lung cancer.

Norfolk Southern (NSC) closed down more than -1% after Evercore ISI downgraded the stock to inline form outperform. 

Across the markets…

March 10-year T-notes (ZNH23) on Tuesday closed down -19.5 ticks, and the 10-year T-note yield rose +10.5 bp to 3.690%. March T-notes Tuesday fell to a 2-1/2 week low, and the 10-year T-note yield jumped to a 2-1/2 week high of 3.707% as global bond yields soared after the BOJ unexpectedly widened its 10-year yield target rage, a hawkish development.  The 10-year Japan JGB bond yield surged to a 7-year high, and the 10-year German bund and 10-year UK gilt yields rose to 6-week highs.

T-notes found some support on Tuesday’s news that U.S. Nov building permits fell more than expected to a 2-1/2-year low.

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