US STOCKS-S&P, Nasdaq extend year-start skid to three; Dow higher on financials
04/01/2024 21:53
*
US private payrolls increase in December - ADP
*
Allstate, JP Morgan hit record highs after broker reports
*
Walgreens drops after slashing dividend
*
Mobileye tumbles after weak annual revenue forecast
*
Indexes: Dow up 0.03%, S&P down 0.34%, Nasdaq down 0.56%
(Updates with closing prices)
By David French
Jan 4 (Reuters) - The S&P 500 .SPX and Nasdaq
Composite .IXIC closed lower on Thursday, extending their
losing streak that kicked off 2024, although the Dow Jones
Industrial .DJI eked out a win on the back of financial stocks
and strong jobs data.
For the S&P 500, this is the worst start to a year since it
began 2015 with a three-session skid, as tech-focused investors
continued to take profits after a blistering rally in the final
weeks of last year.
Bets that the Federal Reserve could start reducing rates
this year had driven much of the gains toward the end of 2023,
though the latest minutes from the central bank's December
policy meeting did not offer many clues on when the easing might
commence.
A tick-up in yields on longer-dated U.S. Treasuries - the
benchmark 10-year note US10YT=RR ended at 4% - prompted
traders to move away from growth stocks toward other sectors.
US/
Financials .SPSY was one of the few gainers among the S&P
500 sectors, underpinned by Allstate ALL.N , which rose 2.4% to
close at an all-time high after Morgan Stanley lifted its rating
on the insurer to "overweight."
Other insurers also rose, including Hartford Financial
Services Group HIG.N , which gained 0.7% to its highest finish
since 2008.
Banks were strong performers ahead of the start of earnings
season next week. JPMorgan Chase & Co JPM.N and Truist
Financial Corp TFC.N were among those which advanced, up 0.7%
and 1.3% respectively, after both received positive analyst
reports from BofA Global Research.
Last year was one of substantial upheaval in the banking
sector, as institutions managed the impact of rapid increases in
central bank rates on their balance sheets.
Banks should benefit in 2024 from lower-yielding investments
rolling off and being reinvested in new securities with higher
yields, said Ian Lapey, portfolio manager of The Gabelli Global
Financial Services Fund.
Coupled with rotation out of more speculative, growth names,
banks with strong management teams will reward investors, he
added.
"We're setting up for significant relative outperformance of
the strongly managed and financed banks and other financials, as
compared to other, more expensive areas of the market."
Among the latest economic data, the ADP National Employment
report showed U.S. private employers hired more workers than
expected in December, pointing to persistent labor market
strength that should continue to sustain the economy. This came
ahead of official U.S. employment data due on Friday.
Meanwhile, the weekly Labor Department report showed more
Americans filed for state unemployment claims than expected.
The S&P 500 .SPX lost 16.13 points, or 0.34%, to end at
4,688.68 points, while the Nasdaq Composite .IXIC lost 81.91
points, or 0.56%, at 14,510.3. The Dow Jones Industrial Average
.DJI rose 10.15 points, or 0.03%, to 37,440.34.
Most S&P sectors were down, led by energy .SPNY which fell
1.6% after a massive U.S. fuel inventory build pushed crude
prices lower. O/R
A number of big-tech names also ended lower, with Amazon.com
Inc AMZN.O down 2.6% and Alphabet Inc GOOGL.O declining
1.8%. Apple AAPL.O shares slid 1.3% after brokerage Piper
Sandler downgraded the iPhone maker to "neutral," days after
Barclays also cut its rating.
Mobileye Global MBLY.O sank 24.5% after forecasting
preliminary fiscal 2024 revenue below estimates, while Walgreens
Boots Alliance WBA.O dropped 5.1% after the U.S. pharmacy
chain nearly halved its dividend.
The volume on U.S. exchanges was 11.13 billion shares,
compared with the 12.30 billion average over the last 20 trading
days.
(Reporting by Johann M Cherian and Shristi Achar A in Bengaluru
and David French in New York; Editing by Devika Syamnath and
Richard Chang)
((johann.mcherian@thomsonreuters.com;))