The S&P 500 Index ($SPX) (SPY) on Tuesday closed down -1.02%, the Dow Jones Industrials Index ($DOWI) (DIA) closed down -1.04%, and the Nasdaq 100 Index ($IUXX) (QQQ) closed down -1.80%.

Stock indexes retreated Tuesday, with the S&P 500, Dow Jones Industrials, and Nasdaq 100 falling to 1-1/2 week lows.  Weakness in technology stocks weighed on the overall market as some negative corporate news undercut tech stocks.  Apple closed down more than -2% after figures from Counterpoint Research showed iPhone sales in China fell by -24% in the first six weeks of this year.  Also, Tesla closed down more than -4%, adding to Monday’s -7% loss after Chinese vehicle shipments plunged.  In addition, Advanced Micro Devices closed down more than -1% after hitting a U.S. government roadblock in its plan to sell an artificial intelligence chip made for China. 

Stocks maintained their losses on Tuesday’s weaker-than-expected U.S. economic news on Jan factory orders and Jan ISM services.  However, the weaker economic reports news knocked bond yields lower and bolstered expectations that the Fed is closer to cutting interest rates.

U.S. Jan factory orders fell -3.6% m/m, weaker than expectations of -2.9% m/m and the biggest decline in 3-3/4 years.

The U.S. Feb ISM services index fell -0.8 to 52.6, weaker than expectations of 53.0.

On the positive side for stocks are lower bond yields, as the 10-year T-note yield dropped to a 3-week low on Tuesday.  Also, Target closed up more than +12% after reporting stronger-than-expected Q4 adjusted EPS.

After posting an all-time high Tuesday of $68,970, Bitcoin (^BTCUSD) tumbled more than -7% on fund profit taking. Bitcoin has soared more than +63% so far this year to Tuesday’s record high on a steady flow of funds into the 11 spot-Bitcoin ETFs that began trading in January and have attracted nearly $8 billion of inflows.

The markets are discounting the chances for a -25 bp rate cut at 2% for the March 19-20 FOMC meeting and 25% for the following meeting on April 30-May 1.

Overseas stock markets Tuesday settled mixed.  The Euro Stoxx 50 closed down -0.40%.  China’s Shanghai Composite closed up +0.28%.  Japan’s Nikkei Stock Index closed down -0.03%.

Interest Rates

June 10-year T-notes (ZNM24) on Tuesday closed up +17.5 ticks, and the 10-year T-note yield fell -7.8 bp to 4.135%.  Jun T-notes Tuesday climbed to a 3-week high, and the 10-year T-note yield fell to a 3-week low of 4.110%.   T-notes on Tuesday opened higher on carryover support from rallies in European government bond markets.  Also, Tuesday’s weakness in stocks boosted safe-haven demand for T-notes.  T-notes raced up to their highs on Tuesday’s weaker-than-expected U.S. economic reports on Jan factory orders and Jan ISM services.

European government bond yields on Tuesday moved lower.  The 10-year German bund yield fell to a 2-1/2 week low of 2.293% and finished down -6.8 bp at 2.323%.  The 10-year UK gilt yield fell to a 2-1/2 week low of 3.990% and finished down -10.6 bp at 4.011%.

The Eurozone Feb S&P composite PMI was revised upward by +0.3 to an 8-month high of 49.2 from the previously reported 48.9.

U.S. Stock Movers

Albemarle (ALB) closed down more than -17% to lead losers in the S&P 500 after announcing that it plans to sell $1.75 billion in depositary shares (ADRs) in a public offering to help fund its capital spending. 

Apple (AAPL) closed down more than -2% after Counterpoint Research said iPhone sales in China declined by -24% over the first six weeks of this year.  Apple suppliers also fell on the news, with Qorvo (QRVO) closing down more than -5% and Qualcomm (QCOM) closing down more than -3%.  Also,

Broadcom (AVGO) and Micron Technology (MU) closed down more than -1%. 

Tesla (TSLA) closed down more than -4%, extending Monday’s -7% plunge after the China Passenger Car Association reported Tesla’s China Feb shipments fell -15.5% m/m to 60,365 units.

Software stocks were under pressure Tuesday and weighed on technology stocks.  MongoDB (MDB) closed down more than -8% to lead losers in the Nasdaq 100. Also, Atlassian (TEAM), Autodesk (ADSK), and Synopsys (SNPS) closed down more than -5%.  In addition, Salesforce (CRM) closed down more than -5% to lead losers in the Dow Jones Industrials.  Finally, Adobe (ADBE), Intuit (INTU), and ServiceNow (NOW) closed down more than -4%, and Microsoft (MSFT) closed down more than -3%. 

Gitlab (GTLB) closed down more than -20% after forecasting 2025 revenue of $725 million-$731 million, weaker than the consensus of $732.2 million. 

Ferguson (FERG) closed down more than -6% after reporting Q2 revenue of $6.67 billion, below the consensus of $6.76 billion. 

GlobalFoundries (GFS) closed down more than -3% after Susquehanna Financial downgraded the stock to neutral from positive.

Advanced Micro Devices (AMD) closed down more than -1% after U.S. officials told the company that an artificial intelligence chip it was making for sale in China was too powerful and it would need to obtain a license from the Commerce’s Bureau of Industry and Security to sell it.

Target (TGT) closed up more than +12% to lead gainers in the S&P 500 after reporting Q4 adjusted EPS of $2.98, well above the consensus of $2.40. 

DaVita (DVA) closed up more than +7% on its plans to expand in Brazil and Columbia and enter markets for kidney dialysis in Chile and Ecuador.

AeroVironment (AVAV) closed up more than +27% after reporting Q3 adjusted EPS of 63 cents, stronger than the consensus of 33 cents, and raising its full-year adjusted EPS forecast to $2.69-$2.83 from a previous estimate of $2.46-$2.70, above the consensus of $2.74. 

Paymentus Holdings (PAY) closed up more than +20% after reporting Q4 adjusted Ebitda of $19.9 million, better than the consensus of $13.4 million, and forecasting full-year adjusted Ebitda of $65 million-$75 million, stronger than the consensus of $65.3 million. 

Regional bank stocks moved higher Tuesday on a decline in bond yields.  Citizens Financial Group (CFG) closed up more than +5%, and Zions Bancorp (ZION) closed up more than +4%.  Also, Comerica (CMA) and KeyCorp (KEY) closed up more than +3%.  In addition, Huntington Bancshares (HBAN), Regions Financial (RF), M&T Bank (MTB), Truist Financial Corp (TFC), and US Bancorp (USB) closed up more than +2%.

AT&T (T) closed up more than +2% after Wolfe Research upgraded the stock to outperform from peer perform with a price target of $21. 

Apogee Therapeutics (APGE) closed up more than +42% after reporting its early-stage trial of its experimental treatment for atopic dermatitis exceeded objectives.

Earnings Reports (3/6/2024)

Brown-Forman Corp (BF/B), Campbell Soup Co (CPB), NET Lease Office Properties (NLOP), Thor Industries Inc (THO), Victoria's Secret & Co (VSCO).

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