S&P 500 closes lower to begin 2024, Nasdaq notches worst day since October: Live updates

Lisa Kailai Han
Yun Li
Traders work on the floor of the New York Stock Exchange (NYSE) on the first trading day of 2024 on January 02, 2024 in New York City.

The S&P 500 fell Tuesday, the first trading day of the year, as bond yields inched higher and investors took some money off the table following a surprisingly strong 2023.

The broad market index lost 0.57% to settle at 4,742.83. The Nasdaq Composite pulled back by 1.63% to 14,765.94, for its worst day since October. The Dow Jones Industrial Average added 25.50 points, or 0.07%, to close at 37,715.04. Markets were closed Monday for New Year's Day.

Apple shares slid more than 3% after Barclays downgraded the member of the Magnificent Seven market leaders basket to an underweight rating. On the other hand, the Dow remained in positive territory as defensive stocks like Johnson & Johnson and Merck strengthened.

The stock market finished 2023 with a bang, as the S&P 500 climbed for nine weeks in a row to end the year, notching its best weekly win streak since 2004. Risk assets enjoyed a big relief rally as the economy remained resilient and inflation cooled, while the Federal Reserve signaled an end to rate hikes and forecasted rate cuts later this year. The market also endured a regional banking crisis as well as wars in Ukraine and the Middle East.

Technology shares, especially megacap stocks, led the 2023 advance with Apple soaring 48%, Microsoft surging nearly 57% and Nvidia skyrocketing 239%. The tech-heavy Nasdaq Composite ended the year up 43.4% for its best year since 2020.

The blue-chip Dow logged a 13.7% gain and notched a new record during 2023. Part of that rally was helped by a turn in interest rates. The 10-year Treasury yield had spooked investors by climbing above 5% at one point in October, before it topped out and closed the year out lower than 3.9%. On Tuesday, the 10-year yield was back up roughly 8 basis points, approaching 4% again. (1 basis point equals 0.01%.)

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10-year Treasury yield, 6 months

That trend was reversing on Tuesday as the new year of trading began with megacap tech names declining. Apple shares fell after the negative call from Barclays. The firm said Apple could lose about 17% this year because of lackluster iPhone sales. Microsoft and Nvidia shares were also in the red.

This reversal is fairly common in the first day of trading, according to Infrastructure Capital Management CEO Jay Hatfield.

"This is perfectly normal, somewhat expected activity," he told CNBC. "It's a normal seasonal pattern that you have tax loss selling in the period before year-end, and then you have gain harvesting in the period after … And I would say the trigger point too was this Apple downgrade."

Despite this slight pullback, Hatfield is still bullish on equities in the new year. He expects stocks to pick back up once earnings season rolls back around.

Tue, Jan 2 2024 4:11 PM EST

S&P 500 finishes lower, with Nasdaq cinching worst day since October

After finishing 2023 with a bang, the S&P 500 finished its first trading day of the new year in the red.

The 500-stock benchmark slid 0.57% to settle at 4,742.83, while the Nasdaq Composite lost 1.63% to close at 14,765.94, notching its worst day since October.

The Dow Jones Industrial Average, however, gained 25 points, or 0.07%, to 37,715.04. It had earlier gained as much as 100 points and lost nearly 194 during the day's trading session.

— Lisa Kailai Han

Tue, Jan 2 2024 3:44 PM EST

Why 2024 could be another strong year of gains for stocks

2023 was a banner year for stocks, and a look at the money flow indicates there could be even more gains in 2024.

Scott Rubner, managing director at Goldman Sachs, noted that global equities saw more than $172 billion in inflows last year. That's the lowest amount of inflows since 2019, he said.

"Have global asset allocators already pre-traded 'the January' move and switched their exposure into equities? The answer is no," Rubner wrote. He also noted that money market funds saw a whopping $1.34 trillion in inflows last year — exceeding the previous three years combined.

Bottom line: There's lots of money on the sidelines, and that could be good news for stocks.

— Fred Imbert

Tue, Jan 2 2024 3:29 PM EST

Stocks typically rally 12% on average after the first Fed rate cut, NDR says

Stocks tend to do well over monetary easing cycles, according to Ned Davis Research.

"Equities, as represented by the S&P 500, have never rallied more than 11% in the three months leading up to the first Fed rate cut. On average, performance has been pretty flat," Joe Kalish, chief global macro strategist at Ned Davis Research, wrote on Tuesday. "But after the rate cut, stocks tend to rally for 6-7 months with a mean gain of roughly 12%."

Since 1970, equities rose in 11 out of 12 easing cycles, with a median gain of more than 15%, according to the strategist. The only decline occurred during the easing cycle in 2001 through 2003 after the burst of the dot-com bubble.

— Sarah Min

Tue, Jan 2 2024 3:17 PM EST

Oil prices fall as traders monitor rising Red Sea tensions

Oil prices fell on Tuesday as traders monitored rising tensions in the Red Sea, amid a backdrop of record U.S. production and faltering demand in China.

The West Texas Intermediate contract for February lost $1.27, or 1.77%, to settle at $70.38 a barrel. The Brent contract for March shed $1.15, or 1.49%, to trade at $75.89. 

Crude prices had jumped more than 2% earlier in the trading session on escalating tensions in the Red Sea, a crucial global trade chokepoint. 

Danish shipping giant Maersk said Tuesday it will pause shipping through the Red Sea until further notice after one of its vessels came under attack by militants over the weekend.

"The market is basically saying 'we will wait and see until something happens,'" Helima Croft with RBC Capital Markets told CNBC on Tuesday. "But it's really getting much more serious every day," she said of tensions in the region.

— Spencer Kimball

Tue, Jan 2 2024 2:52 PM EST

S&P 500 could pull back to 4,650 in the first half, says Stifel's Bannister

Don't be surprised if the S&P 500 pulls back to 4,650 during the first half of 2023, according to Stifel's Barry Bannister.

"The market is simply expensive, versus the financial conditions index and the 10-year yield, and we don't really see outside of recession much chance in the tenure remaining below 4%," the chief equity strategist told CNBC's "Squawk on the Street" on Tuesday.

Without the employment market showing signs of weakening, Bannister added that he doesn't expect a recession.

— Samantha Subin

Tue, Jan 2 2024 2:31 PM EST

Value could outpace growth in 2024, says Wharton's Jeremy Siegel

Value stocks will be this year's winner, according to Wharton School professor of finance Jeremy Siegel.

"2022 was fantastic for value, and then it just totally got reversed in 2023...we're in that alternating fashion," Siegel said, noting that the ratios of the Russell 2000 favor value stocks. Looking at valuation, Siegel noted that the P/E ratio of the Russell 1000 growth stocks is nearly double that of the Russell 1000 value stocks.

"Growth stocks should have a higher multiple, but this is a much bigger gap than normal," Siegel told CNBC earlier Tuesday. "I don't think that this means any sort of collapse or anything for the growth stocks...The S&P is on track for perhaps 8% to 10%, and that includes all the stocks, but I think we could have the value sector of the market do 15%."

Siegel added that he believes a soft landing is still the most likely scenario for the economy, and forecasted an acceleration in the market only towards the end of the year into 2025.

— Pia Singh

Tue, Jan 2 2024 1:53 PM EST

Big brands grabbed the most eyeballs in search this holiday season, Telsey says

As investors wait to hear more details about how the holiday season shaped up for specific retailers, Telsey Advisory Group has done some digging into Google Trends search data as a way to gauge consumer interest. The firm said several patterns emerged: Black Friday marked the most consumer interest; the bigger and more established the brand, the more interest there was; and the retailers who reaped the most interest were Amazon, Walmart, Nike, Ugg and Kohl's.

Among the numerous specialty apparel brands, searches for Lululemon "dwarfed" all other brands, Telsey said.

In trading Tuesday, these stocks were mixed. Nike was the only loser in the group in 2023, with a 7% decline in its stock price. Amazon ended 2023 up about 80%. Following the e-commerce giant was Deckers stock with a 68% gain last year, Lululemon with a 60% increase, then Kohl's, which gained 14%, and Walmart, which rose 11%.

—Christina Cheddar Berk

Tue, Jan 2 2024 1:33 PM EST

Nasdaq could hit 20,000 in 2024, says Wedbush's Ives

Ongoing AI tailwinds could boost the Nasdaq to new highs in 2024, according to Wedbush Securities' Dan Ives.

"While we can see ebbs and flows in the coming months given Fed jawboning/macro factors, we believe tech stocks will be up 25% in 2024 with a NASDAQ 20k level our bull case scenario as the Street is still significantly under estimating how quickly this AI monetization cycle is playing out among enterprises in the field," he said in a note to clients.

According to Ives, the new bull market for technology stocks is currently underway as companies ramp up spending behind artificial intelligence. The behemoths, along with a handful of software and chip companies, may have led the early stage, but Ives expects breadth to broaden well beyond the Magnificent 7 in 2024.

This setup could create a potential "tidal wave" of merger and acquistions activity within the software and chipmaking space, Ives wrote, noting that he favors technology giants Apple, Microsoft and Alphabet, along with MongoDB, Palo Alto Networks and Palantir.

— Samantha Subin

Tue, Jan 2 2024 1:10 PM EST

Stocks making the biggest moves midday

Check out the companies making headlines in midday trading.

  • Moderna — The drugmaker jumped 16% following an upgrade to outperform by Oppenheimer. The firm said Moderna's multiple product launches in the next 12 to 18 months should help top-line sales start to grow in 2025. Moderna fell more than 40% in 2023.
  • Apple — Apple slid 3% in midday trading. Barclays downgraded the tech stock, citing poor volumes of iPhone 15s, in addition to Macs, iPads and wearables.
  • GoodRx — The telemedicine stock tumbled about 14% after Bank of America downgraded GoodRx to underperform from buy, citing increased competition from the large pharmacy benefits managers.

Read the full list here.

— Sarah Min

Tue, Jan 2 2024 12:50 PM EST

Cyber stocks under pressure

As tech stocks slide on the first trading day of 2024, cyber security stocks are performing worse than the Nasdaq.

Several ETFs tracking the theme were down 2% or more on the day, including the iShares Cybersecurity and Tech ETF (IHAK) and the Global X Cybersecurity ETF (BUG). The First Trust Nasdaq Cybersecurity ETF (CIBR) fell 2.3%.

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Cyber security stocks and ETFs were lagging the broader market on Tuesday.

Some of the biggest cybersecurity stocks saw even larger declines, with Crowdstrike and Zscaler each falling more than 3%.

— Jesse Pound

Tue, Jan 2 2024 12:14 PM EST

8 stocks in the S&P 500 hit new all-time highs

13 stocks in the S&P 500 hit new 52-week highs during Tuesday's trading session, the first of the new year.

Of these 13 names, eight stocks hit new all-time highs. Here's a look at some of the stocks that reached the milestone:

— Lisa Kailai Han, Christopher Hayes

Tue, Jan 2 2024 11:53 AM EST

Chip stocks fall to start the year

Last year's winning chipmaking stocks fell to start 2024 trading as some investors took profits after a breathtaking 2023.

Major laggards included Nvidia and Advanced Micro Devices, last down 3.3% and 4.9%, respectively. Intel, another big 2023 winner, slumped 3.4%, while Marvell Technology declined more than 2%.

The iShares Semiconductor ETF was last down nearly 3%, dragged down by some of these popular names.

Technology stocks declined across the board on Tuesday, with Apple down 3% following a Barclays downgrade. Meta Platforms and Salesforce sank about 3%, while Microsoft and Amazon slipped about 2% each.

— Samantha Subin

Tue, Jan 2 2024 11:30 AM EST

Cruise stocks fall on higher oil prices

Cruise stocks fell Tuesday on higher oil prices.

Carnival Corporation was down 3.9%, Norwegian Cruise Line fell 6.2%, and Royal Caribbean shed 4.2%.

U.S. crude oil prices rose more than 2% earlier in the trading session due to escalating tensions between the U.S. and Iran-backed militants in the Red Sea, a critical global trade route.

The West Texas Intermediate contract for February later shed most those gains to trade 18 cents, or .25%, higher at $71.83 a barrel.

— Spencer Kimball

Tue, Jan 2 2024 11:10 AM EST

Construction spending rose 0.4% in November; residential up 1.1%

Construction expenditures rose less than expected in November as the housing industry struggles to keep up with a lack of supply.

New spending increased 0.4% on a monthly basis and was up 11.3% from a year previous, the Commerce Department reported Tuesday. Economists surveyed by Dow Jones had been looking for growth of 0.6%.

Private spending increased 0.7% on a monthly basis while public spending fell 0.7%. Residential construction spending increased 1.1%.

—Jeff Cox

Tue, Jan 2 2024 11:07 AM EST

Moderna pops 11% on upgrade

After a dismal 2023, Moderna shares are moving higher in the new year. The stock jumped more than 11% after being upgraded to outperform by Oppenheimer Tuesday.

The drugmaker, which fell more than 40% in 2023, has multiple product launches in the next 12 to 18 months, analyst Hartaj Singh said in a note to clients. That should help top-line sales start to grow in 2025, he said.

"We also expect material clinical and regulatory catalysts ... in this timeframe, making us bullish on the name again," Singh wrote.

His $142 price target implies nearly 43% upside from Friday's close.

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Moderna shares moved higher Tuesday.

— Michelle Fox

Tue, Jan 2 2024 10:53 AM EST

Guggenheim names US Foods 'Best Idea,' drops Dollar General

US Foods Holding is now a better choice for Guggenheim's "Best Idea" rather than Dollar General, although both remain buy-rated, analysts led by John Heinbockel wrote.

Guggenheim cited USFD's "resilient business model, solid operating momentum, a still-modest valuation, and several 1H catalysts" as likely to "drive meaningful outperformance."

Dollar General turned out to be a miserable call in 2023, but USFD "under CEO Dave Flitman, is well-positioned in our view to deliver 10% EBITDA growth in 2024E, regardless of the macro backdrop, while trading at a below-average 9.7x our 2024E EBITDA." Guggenheim lifted its USFD price target to $55 from $52, implying 22% upside for the shares.

— Scott Schnipper, Michael Bloom

Tue, Jan 2 2024 10:23 AM EST

Manufacturing PMI falls in December, S&P Global says

The U.S. manufacturing sector shrank more than expected in December, according to a new purchasing manager's index from S&P Global.

The Manufacturing PMI came in at 47.9 in December, down from 49.4 in November and below the 48.2 expected by economists, according to Dow Jones. A decline in new orders was one of the factors that weighed on the PMI.

"Given current order book trends, the overall picture from the survey is one of supply exceeding demand for many goods, which points to downside risks to production, employment and prices as we head into 2024," Chris Williams, chief business economist at S&P Global Market Intelligence, said in the release.

— Jesse Pound

Tue, Jan 2 2024 9:53 AM EST

Oil prices volatile after U.S. clashes with Iran-backed militants in Red Sea

Oil prices were volatile in the first day of 2024 trading, as traders monitor tensions rise in the Red Sea after clashes between U.S. forces and Iran-backed militants based in Yemen.

The West Texas Intermediate contract for February added 2 cents, or .03%, to trade at $71.67 a barrel on Tuesday. The Brent contract for March gained 16 cents, or .21%, to trade at $77.20. Crude prices had jumped more than 2% earlier in the trading session.

Energy stocks rose in early trading with APA Corporation, ConocoPhilips, Diamondback Energy, Exxon Mobil, Valero, Marathon Oil, and Baker Hughes up more than 1%.

U.S. Navy helicopters on Sunday responded to a distress call from the container ship Maersk Hangzhou after the vessel came under attack from four small boats crewed by Houthi militants.

The U.S. returned fire after coming under attack from the Iran-backed militants, sinking three boats and killing the crews, according to U.S. Central Command.

An Iranian destroyer on Monday passed through the Bab el-Mandeb Strait and entered the Red Sea, according to Iran's Tasnim news agency.

Houthi militants have repeatedly attacked vessels in the Red Sea in recent weeks in response to the war in Gaza, raising fears about disruptions to shipping through the key trade route.

"The real impact of this weekend's action could be that more container ships will refuse to go through the Red Sea until they deem it to be safe," oil market analyst Phil Flynn with the Price Futures Group wrote in a morning note.  "That will increase shipping times and add to costs." 

OPEC and its allies are also expected to start implementing production cuts of 2.2 million barrels per day, as promised at their last meeting in November.

— Spencer Kimball

Tue, Jan 2 2024 9:34 AM EST

Stocks open down to kick off first trading day of 2024

Stocks opened down on Monday to kick off the first trading day of 2024.

The Dow Jones Industrial Average dipped 92 points, or 0.3%. The S&P 500 slid 0.5%, while the Nasdaq Composite slipped 0.9%.

— Lisa Kailai Han

Tue, Jan 2 2024 9:18 AM EST

Tesla tops fourth-quarter delivery estimates, helping it hit its 2023 target

Tesla delivered more vehicles than expected in the fourth quarter, which helped it hit its 2023 target.

Wedbush analyst Dan Ives said it was "an important quarter for Tesla to show strong deliveries with clear momentum into 2024 as demand has upticked since 3Q based on all our global checks."

The electric car maker said deliveries in the latest quarter totaled 484,507, which was higher than the 477,000 estimate compiled by StreetAccount. That brought its tally for the year to 1,808,581.

In October, Tesla said it expected to deliver at least 1.8 million vehicles in 2023, which was lower than 2 million deliveries it had previously anticipated.

Vehicle production rose to 494,989 in the fourth quarter. For the year, Tesla produced 1,845,985 vehicles, it said.

"This was a clear win for Musk and Tesla as hitting 1.8 million vehicles for 2023 was a major achievement in a choppy macro for EVs," Ives added, reiterating his outperform rating.

In premarket trading, Telsa shares were up nearly 1% on the news. Last year, Tesla shares more than doubled.

—Christina Cheddar Berk

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