The S&P 500 and Dow lost ground and closed lower on Tuesday, pressured by a modest rise in Treasury yields as investors assessed the timing and size of any Federal Reserve interest rate cuts in 2024 ahead of inflation data this week.
Expectations the central bank could begin cutting rates as soon as March have been slowly decreasing, with CME's FedWatch Tool showing a 65.7% chance for a cut of at least 25 basis points (bps) for the month, down from 79% a week ago.
Market Snapshot
The S&P 500 fell 7.04 points, or 0.15%, to end at 4,756.50 points, while the Nasdaq Composite gained 13.94 points, or 0.09%, to 14,857.71. The Dow Jones Industrial Average fell 157.85 points, or 0.42%, to 37,525.16.
Market Movers
Juniper Networks jumped 22% to $36.81 after The Wall Street Journal reported Hewlett Packard Enterprise was in advanced talks to buy the networking-equipment company for about $13 billion. A deal between the two companies could be announced as soon as this week, the Journal reported, citing people familiar with the matter. HPE shares declined 9%.
JetBlue was down 10% as analysts at BofA Securities downgraded the stock to Underperform from Neutral. Along with execution risks around its proposed merger with Spirit, they cited the tough domestic airline industry backdrop and ongoing engine problems. The analysts reduced their price target to $3 from $6. United Airlines rose 1.4% to $43.54 after being double-upgraded to Buy at BofA.
Boeing was down 1.4% after United Airlines and Alaska Air said they discovered loose parts on Boeing 737 MAX 9 jets that were inspected following an incident last Friday in which an Alaska Air Boeing 737 MAX 9 lost an “emergency door plug” midair, necessitating an emergency landing. Shares of the aerospace giant fell 8% on Monday after the Federal Aviation Administration ordered the temporary grounding of Boeing 737 MAX 9 planes over the weekend.
Illumina rose 4.6% after the gene-sequencing company said it expected fiscal 2023 sales to fall 2% to about $4.5 billion, a decline that was less than previous guidance.
Match Group rose 3% after the Journal reported Elliott Investment Management has built a big stake in the owner of Tinder, Hinge, and other dating platforms, and plans to push it to take steps to boost its languishing stock. Elliott has built a position of roughly $1 billion in Match, the Journal reported, citing people familiar with the matter.
Nvidia was up 1.7% to $531.40. It closed Monday at an all-time high of $522.53, rising 6.4% during the session. The chip maker debuted new offering in video gaming and automotive technology at the CES conference on Monday.
Extreme Networks dropped 7.4% after the cloud-networking company reduced its revenue outlook for its fiscal second quarter. The company said it expects revenue of between $294 million and $297 million, down from its previous outlook in the range of $312 million and $327 million.
Unity Software said it plans to lay off about 1,800 employees, or 25% of its workforce, as the company “refocuses on its core business.” The videogame developer said in November it was working through changes that likely would lead to more job cuts and the discontinuation of some products. Two months earlier Unity announced a new pricing structure that triggered a backlash from customers, forcing the company to backtrack on the plan and apologize for the move. Shares fell 8%.
CrowdStrike rose 4.8% to $273.77. The cybersecurity company was raised to Overweight from Equal Weight by Morgan Stanley and the price target was boosted to $304 from $203. In a research note, the analysts cited “improving demand, broader platform traction, and multiple product cycles still ramping up, including the recently launched Charlotte AI.”
Market News
Amazon’s Twitch to Cut 500 Employees, About 35% of Staff
Amazon.com Inc.’s livestreaming site Twitch is poised to cut 35% of its staff, or about 500 workers, according to people familiar with the plans, the latest in a series of job reductions there.
The cuts, which could be announced as soon as Wednesday, come amid concerns over losses at Twitch and after several top executives left the company in the span of a few months. A Twitch spokesperson declined to comment.
SEC X Account Compromised to Falsely Say Bitcoin ETFs Approved
The US Securities and Exchange Commission said it had not yet granted approval of spot-Bitcoin exchange-traded funds, and that a post that appeared on the regulator’s official X account was untrue.
The post, which included a fake comment purporting to be from SEC Chair Gary Gensler, briefly fueled a jump in the price of Bitcoin. Traders have been speculating for weeks that the agency could approve several of the products as soon as Wednesday.
