A trader works on the floor of the New York Stock Exchange (NYSE) during morning trading on March 4, 2024 in New York City.
Angela Weiss | Afp | Getty Images
U.S. stock futures ticked lower Monday night after the Nasdaq Composite retreated from its record high.
Futures tied to the Dow Jones Industrial Average dropped 48 points, or 0.1%. S&P 500 futures inched down 0.1%, while Nasdaq-100 futures fell roughly 0.2%.
In after-hours action, shares of GitLab tumbled more than 20% after the software company posted a weak forecast for the full year.
During Monday’s main trading session, the S&P 500 dropped 0.12%, and the tech-forward Nasdaq Composite slipped 0.41%. This came on the back of the two indexes’ record closing highs on Friday. The Dow also slipped nearly 98 points, or 0.25%.
Chipmakers Nvidia and Super Micro Computer continued their run, gaining more than 3% and 18%, respectively. Meanwhile, other mega cap tech names struggled and pulled the market lower. Apple lost 2.5% after the European Commission fined the company nearly $2 billion. Tesla, which fell more than 7% following new price discounts, led the broad market index’s losses.
Overall, large cap tech companies are still the best way to play the artificial intelligence trend, Jason Draho, UBS Global Wealth Management head of asset allocation Americas, told CNBC’s “Closing Bell: Overtime” on Monday. “They’re still the ones that have the scale to kind of benefit. Their valuations are extreme but they’re also growing incredibly fast.”
Draho said although there are fears of “pent-up exuberance” in the market similar to 1996, he thinks there’s still more upside potential ahead.
“But this market is still more [in the] early to mid 90s, not late the 90s. We don’t see that exuberance yet. And I think some of these large tech companies are still going to benefit from this AI sphere, which we think has a multi-year horizon,” Draho added.
On the earnings front, investors will be looking toward reports from retailer Target on Tuesday morning, followed by Nordstrom and Box after the bell.
More economic data, including the S&P Global US Services purchasing managers’ index, durable goods orders and ISM Services Index are scheduled for release Tuesday morning.
Utilities stand out in otherwise downbeat day for stocks
The three major averages cooled off from the market rally Monday, but it was utilities’ time to shine.
The utilities sector was the outperformer among the 11 sectors of the S&P 500, up 1.64%.
Though the likes of Dominion Energy and AES were the biggest winners – posting gains of about 4% each – a notable winner emerged in Constellation Energy. The stock gained 3.5% Monday, but has also shown considerable strength over the longer term: Constellation is up 50% in 2024, while the utilities sector is down nearly 1.7%.
CEG, which has a 0.8% dividend yield, remains well-liked among analysts, with more than 6 out of 10 analysts rating it buy, per FactSet. However, the average analyst price target suggests a decline of more than 10% from here.
–Darla Mercado, Ethan Kraft
Gold’s ascent lifts miners ETF to its best day in 2024
Investors should ‘move on’ from Apple, says Renaissance Macro Research
Apple shares are having a terrible start to 2024. With the tech giant is down 9% year to date, Renaissance Macro Research founder Jeff deGraaf advises investors to reconsider the stock.
“I think you want to move on from Apple tactically. This isn’t about the next 30 years, this is about the next three to maybe 12 months,” deGraaf told CNBC’s “Closing Bell” on Monday.
The stock appears like it’s distributing “and it looks like it’s an elongated consolidation,” deGraaf added.
— Hakyung Kim
‘Best in class’ retail brands are at an inflection point, JPMorgan analyst says
Customers make purchases at a T. J. Maxx store on February 28, 2024 in Chicago, Illinois.
Scott Olson | Getty Images
JPMorgan analyst Matthew Boss sees better times ahead for some “best in class” retail brands.
“I think we’re hitting an inflection point for all of retail,” Boss said during an interview on CNBC’s “Closing Bell” Monday. “I think you’re seeing an intentional consumer out there. They’re shopping for brands. They want value and they want convenience.”
According to Boss, this consumer mindset will put off-price retailers like T.J. Maxx-owner TJX Cos, Burlington and Ross Stores in a sweet spot as these stores sell well-known brands at a discount. He expects upbeat earnings from Ross Stores on Tuesday.
“But [consumers] also want destination as well as experience and service, and that is what Macy’s right now is focused on …,” he said. Boss said he recently visited Macy’s locations where new strategies are being tested and thought the stores had better staffing and were “amplifying” key brands.
In addition to the work the retailers are doing to improve their businesses, Boss anticipates that high-income consumers may feel freer to spend now that the stock market has been rallying.
—Christina Cheddar Berk
Stocks making the biggest moves after hours
Check out the stocks posting the biggest moves in postmarket trading.
GitLab — The software company declined more than 18% after issuing weaker-than-expected forward guidance. Gitlab forecasts full-year revenue to fall in a range between $725 million and $731 million. This came in below analysts’ estimates of $732 million, according to LSEG. Profit estimates also missed expectations, with GitLab guiding between 19 cents to 23 cents, versus estimates of 35 cents. Meanwhile, the company posted a beat on top- and bottom-lines in the fourth quarter.
Stitch Fix — Shares fell 12.5% after the company posted disappointing results for the fiscal second quarter. The company posted an 18% year-over-year decrease in net revenue from continuing operations. Active clients also fell 17% from the previous year.
AeroVironment — Shares jumped nearly 19% after AeroVironment’s third-quarter results topped analysts’ estimates. The defense company posted adjusted earnings of 63 cents per share on $187 million in revenue. Analysts polled by LSEG had estimated 33 cents earnings per share and $171 million in revenue. AeroVironment also posted a higher-than-expected range for its full-year earnings and revenue estimates, citing increased global demand.
— Hakyung Kim
Stock futures open flat Monday
U.S. stock futures opened near the flatline on Tuesday.
Dow Jones Industrial Average futures inched down 0.1%. Futures tied to the S&P 500 and Nasdaq 100 ticked down 0.06% and 0.1% each.
— Hakyung Kim
