U.S. stock indexes ended the second session of the year down again in extended profit-taking on Wednesday after a strong finish to 2023, with minutes from the Federal Reserve's December meeting failing to shake off the funk hanging over markets.
Market Snapshot
The S&P 500 (.SPX) lost 38.02 points, or 0.8%, to end at 4,704.81 points, while the Nasdaq Composite (.IXIC) lost 173.73 points, or 1.18%, to 14,592.21. The Dow Jones Industrial Average (.DJI) fell 284.85 points, or 0.76%, to 37,430.19.
Market Movers
Apple extended losses, falling 0.8% to $184.25, after the iPhone maker closed down 3.6% Tuesday following a downgrade to Underweight from Equal Weight by analysts at Barclays, who noted weakness in sales of iPhones and Mac computers. Apple’s growth has stalled, Barron’s has noted previously, despite the stock’s gain last year of 48%.
SoFi Technologies was downgraded to Underperform from Market Perform at Keefe Bruyette and the price target on shares of the financial-technology company were reduced to $6.50 from $7.50. The stock fell 14% to $8.31.
Keefe Bruyette also downgraded Rocket Cos., the parent of home loan originator Rocket Mortgage, to Underperform from Market Perform and left the price target at $10.75. Wells Fargo, meanwhile, downgraded Rocket to Equal Weight from Overweight but raised its price target to $14 from $13. Rocket shares fell 6.6% to $13.34.
Tesla was down 4%, closing lower for a fourth-straight day. Tesla reported fourth-quarter deliveries that beat analysts’ estimates but was topped in the period by China’s BYD, which posted deliveries of 526,000 all-electric vehicles, making the company the world’s largest seller of all-battery electric vehicles.
Enphase Energy was one of the leading decliners in the S&P 500 on Wednesday, falling 6.6% to $122.63. Analysts at Mizuho maintained their Buy rating on shares of the solar and alternative-energy products company and raised their price target to $150 from $131.
Xerox dropped 12% after the copier and printer maker said it was targeting a 15% workforce reduction this quarter as part of a new operating model it unveiled.
AST SpaceMobile, which is building a space-based cellular broadband network, was up 1.7% after disclosing that it was seeking to close and fund a previously disclosed strategic investment this month with multiple parties. The company also said it had secured initial ground infrastructure orders from two customers.
Verizon Communications was upgraded by KeyBanc to Overweight from Sector Weight with a price target of $45. The analysts said they expect “wireless industry competitive intensity being low, which makes us want more wireless exposure,” and that the company should show “better postpaid phone net add performance” in 2024. Verizon rose 0.7% to $39.16.
PGT Innovations received an unsolicited proposal from Miter Brands to acquire all outstanding shares of the windows and doors company for $41.50 a share in cash. The offer implies an equity value of about $2.37 billion. PGT had reached a deal last month to be bought by Masonite International for $33.50 in cash and $7.50 in stock. PGT said that it would review the Miter Brands’ proposal to determine if it was reasonably likely to lead to a superior proposal. Shares of PGT Innovations were up 3.7% to $41.70.
Cal-Maine Foods (NASDAQ: CALM) declined 8% after it reported results for the quarter and commented on the impact of outbreaks of bird flu on egg supply.
MongoDB (NASDAQ: MDB) declined 2% after UBS analysts downgraded the stock from 'buy' to 'neutral' with a price target of $410.
Resources Connection (NASDAQ: RGP) gained 4% after it reported Q2 EPS of $0.28, $0.11 better than the analyst estimate of $0.17. Revenue for the quarter came in at $163.1 million versus the consensus estimate of $161.92 million.
FuboTV (NYSE: FUBO) climbed 1.7% after announcing a new comprehensive multi-year distribution agreement with Nexstar Media Group (NASDAQ:NXST).
Select Medical (NYSE: SEM) climbed 1.4% after it announced that its board of directors has approved a plan to pursue the separation of Select Medical's wholly-owned occupational health services business, Concentra.
Arena Group (AREN) climbed 45% following a report from the New York Post that said James Heckman and Brock Pierce offered $4.50 per share for 45% of Arena. The report cities sources close to the situation.
Dyne Therapeutics, Inc. (Nasdaq: DYN) declined 6% after it commenced an underwritten public offering of $175 million of shares of its common stock.
Market News
Fed Officials Indicated Lower Rates Would Be Appropriate By the End of 2024: Meeting Minutes
Federal Reserve officials agreed during their last policy meeting of 2023 that interest rates were likely at their peak and almost all of them predicted lower rates "would be appropriate by the end of 2024," according to minutes from that meeting released by the central bank on Wednesday.
But there wasn't a discussion of exactly when those cuts could begin and participants kept the option of higher rates on the table if inflation were to heat up again.
There was also some divergence about exactly how the future could unfold, with several suggesting rates could stay at this peak for "longer than they currently anticipated" and a number of participants warning about the risks to the economy of being restrictive for too long.
The SEC Will Not Approve Spot Bitcoin ETFs in January: Matrixport
Matrixport highlighted that the current leadership overseeing the approval of ETFs at the SEC consists of a five-person voting Commissioners team, primarily composed of Democrats.
SEC Chair Gary Gensler’s evident hostility towards the crypto sector makes it highly unlikely that he would support the endorsement of spot Bitcoin ETFs. Gensler’s remarks in December 2023 also emphasize the belief that the industry requires increased compliance with strict regulatory standards.
Considering the political landscape, there is little incentive to approve a spot Bitcoin ETF, as it would validate the cryptocurrency as an alternative store of value.
