Stock market today: Stocks finish mixed, yields rise to start second quarter trading

US stocks finished mixed to kick off 2024's second quarter as US treasury yields rose.

The S&P 500 (^GSPC) fell 0.2%, while the Dow Jones Industrial Average (^DJI) fell 0.6%. The tech-heavy Nasdaq Composite (^IXIC) closed slightly higher, though off its earlier session highs.

US bonds sold off as the benchmark 10-year Treasury (^TNX) yield rose 12 basis points to 4.32%, inching toward its highest level of the year.

Data released on Monday showed the US manufacturing sector is in its strongest position since 2022, raising questions over whether the economy is accelerating and its impact on the Federal Reserve's path on interest rates.

As Yahoo Finance's Josh Schafer reported, the Institute for Supply Management's manufacturing PMI indicated the manufacturing sector moved into expansion for the first time since September 2022. Meanwhile, a measure from S&P Global showed production hit a 22-month high last month as the US economy continues to impress.

The ISM's manufacturing PMI registered a reading of 50.3 in March, up from February's reading of 47.8 and higher than the 48.3 economists expected, according to Bloomberg data.

Equities have begun 2024 on a high note: The benchmark S&P 500 has set 22 fresh closing records so far this year as part of its best first quarter since 2019. Meanwhile, all three major averages have now risen for five straight months.

The highlight of Q2's first week on the macroeconomic front is Friday's jobs report, which will serve as another important signal to the Fed.

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Stocks finish mixed to kick off second quarter, bond yields rise

Mon, 1 April 2024 at 4:04 pm GMT-4, Ines Ferré

US stocks closed mixed to kicked off 2024's second quarter as bonds sold off, sending Treasury yields higher.

The S&P 500 (^GSPC) fell 0.2%, while the Dow Jones Industrial Average (^DJI) fell 0.6%. The tech-heavy Nasdaq Composite (^IXIC) rose slightly, erasing earlier session gains.

US bonds sold off as the benchmark 10-year Treasury (^TNX) yield rose 12 basis points to 4.32%, inching toward its highest intraday level of the year.

Oil- and gas-related stocks outperformed on Monday as crude oil prices traded at their highest level since late October. The S&P 500 Energy Select ETF (XLE) rose almost 1% to touch a 52-week high.

Gold (GC=F) touched new highs on Monday, following a series of records in March. The precious metal futures rose more than 1% to trade as high as $2,286.40 per ounce.

Energy sector hits 52-week high as the price of oil climbs

Mon, 1 April 2024 at 3:10 pm GMT-4, Ines Ferré

Oil and gas-related stocks outperformed on Monday as crude oil prices traded at their highest level since late October. The S&P 500 Energy Select ETF (XLE) rose almost 1% to touch a 52-week high.

Energy outperformed the rest of the S&P 500 sectors last month as the price of crude continued its steady climb.

On Monday oil futures gained throughout most the session on the potential for strong demand from China and possible signs of a widening conflict in the Middle East. Iranian state media said an Israeli airstrike on Iran’s embassy in Syria has killed a military commander.

West Texas Intermediate (CL=F) settled at $83.71 per barrel on Monday while Brent (BZ=F) futures, the international benchmark price, closed at $87.42 per barrel.

Rent prices rise for second straight month in March, remain on track to ease inflation

Mon, 1 April 2024 at 2:32 pm GMT-4, Dani Romero

Spring is looking more competitive for the rental market. But the bigger forces bringing down rent inflation remain intact.

New data from Apartment List published last week showed that median rent costs nationwide rose by 0.6% in March, the second straight monthly increase after six consecutive monthly declines. The median cost of rent now stands at $1,388.

Over the last 12 months, however, rent costs are down 0.8% and look set to continue easing inflation pressures.

March saw monthly rents rise in 81 of the top 100 cities, though only 42 cities recorded year-over-year growth. Regionally, the Sun Belt has logged notable rent declines as an influx of multifamily units cooled off the market.

The surge in new apartment supply has also pushed vacancies up, with the national index hitting 6.7%, the highest since July 2020. The figure solidifies the two-year trend of easing multifamily occupancy, and supply isn't set to slow.

In its report, Apartment List noted 2023 saw a record number of multifamily units completed "and an even greater number of new units are expected to come on the market this year."

Rent has been a major influence on inflation, with the cost of shelter, while moderating on a monthly basis, still accounting for about two-thirds of the annual increase in consumer prices seen in February.

However, the slowdown in rent prices that began back in 2022 is still feeding through the data and is expected to bring inflation pressures down later this year.

"The Apartment List National Rent Index has proven to be a strong leading indicator of the CPI housing and rent components, since our index captures price changes in new leases, which are only later reflected in price changes across all leases (i.e., what the CPI measures)," the report said.

"And while rent growth as measured by our index was cooling over the course of 2022, the CPI measure continued to rise. But as we had long been predicting, the shelter component of CPI finally turned the corner last spring and has been steadily cooling off ever since. As the official measure of shelter inflation continues to trend down, it will help ease overall inflation as well."

Tesla hikes prices in US and China despite rivals' cuts and incentives

Mon, 1 April 2024 at 1:50 pm GMT-4, Ines Ferré

Tesla (TSLA) stock slid 2% on Monday after the electric vehicle giant lifted prices across a number of regions on the first day of the second quarter.

Yahoo Finance's Pras Subramanian reports:

In the US, Tesla hiked prices of its popular Model Y SUV across all three trim levels by $1,000. Tesla did the same in China, with the Model Y Long Range version rising by 5,000 yuan ($675) to 304,900 yuan, with the Performance version also rising by 5,000 yuan, to 368,900 yuan.

Tesla shares fell roughly 2% on Monday.

Trump Media stock sinks as new filing shows heavy losses

Mon, 1 April 2024 at 1:15 pm GMT-4, Alexandra Canal

Trump Media & Technology Group (DJT), the parent company of Donald Trump's social media platform Truth Social, sank more than 22% in midday trading on Monday following its blockbuster debut last week.

The stock drop comes on the heels of an updated regulatory filing early Monday that showed the company taking on heavy losses and facing "greater risks" associated with the former president's ties to the platform.

According to the filing, Trump Media reported sales of just over $4 million as net losses reached nearly $60 million for the full year ending Dec. 31. The company warned it expects losses to continue amid greater profitability challenges.

"TMTG has historically incurred operating losses and negative cash flows from operating activities," the filing read.

"TMTG expects to continue to incur operating losses and negative cash flows from operating activities for the foreseeable future, as it works to expand its user base, attracting more platform partners and advertisers."

Truth Social has lured about 9 million users since its inception. But its success largely depends on the "reputation and popularity" of former President Donald Trump.

"TMTG may be subject to greater risks than typical social media platforms because of the focus of its offerings and the involvement of President Trump," the company said, citing risks that include the harassment of advertisers and criticism of Truth Social's moderation practices.

"The value of TMTG's brand may diminish if the popularity of President Trump were to suffer."

The filing also revealed stakeholders are still subject to a six-month lockup period before selling or transferring shares.

Trump maintains a roughly 60% stake in Truth Social, a stake worth more than $3 billion at current trading levels.

The opportunity to cash in by selling some of his stake in the company could help the former president as he faces a $454 million fraud penalty and grapples with a campaign fundraising shortfall ahead of his 2024 election rematch against Biden.

The only exception to the lockup period would be if the company's board votes to make a special dispensation. Although possible, experts told Yahoo Finance last week the attempt would likely result in multiple lawsuits on behalf of public shareholders.

Read more here.

Trending tickers on Monday

Mon, 1 April 2024 at 12:54 pm GMT-4, Ines Ferré

Alphabet (GOOG, GOOGL)

Alphabet occupied the No. 1 slot on Yahoo Finance’s trending tickers list on Monday. Shares of the tech giant rose more than 3% to trade above $156 each. Alphabet stock is up roughly 11% year to date.

Micron (MU)

Micron shares hit a record high on Monday after Bank of America analysts raised their price target on the stock to $144 from $120 on enthusiasm over increased demand amid an artificial intelligence boom. Last month Micron began mass production of its high-bandwidth memory (HBM) semiconductors for use in Nvidia’s (NVDIA) AI chips.

Micron stock is up 47% year to date.

3M (MMM)

Shares of 3M soared 4% after the conglomerate completed the spin-off of its healthcare business, which formally launched as Solventum Corporation. Solventum (SOLV) listed on the New York Stock Exchange on Monday.

US manufacturing activity grows at fastest rate since 2022

Mon, 1 April 2024 at 12:15 pm GMT-4, Josh Schafer

The US manufacturing sector is in its strongest position since 2022, two reports out Monday showed.

The Institute for Supply Management's manufacturing PMI indicated the manufacturing sector moved into expansion for the first time since September 2022 in March while a measure from S&P Global showed production hit a 22-month high last month as the US economy continues to impress.

The ISM's manufacturing PMI registered a reading of 50.3 in March, up from February's reading of 47.8 and higher than the 48.3 economists expected, according to Bloomberg data.

The March reading marks the highest for the index since September 2022 and the first time manufacturing activity has expanded since October 2022. Readings above 50 for this index indicate an expansion in activity while readings below 50 indicate contraction.

"Demand was positive, output strengthened and inputs remained accommodative," Timothy Fiore, chair of the ISM's manufacturing business survey committee, said in the company's release.

Notably, this could be a welcome sign for stocks. An uptick in the manufacturing sector has been highlighted by Wall Street strategists searching for further signs the broadening of the stock market rally has more room to run.

"We see continued signs of a manufacturing upcycle, signaling an end to the third-longest manufacturing downturn in history," Bank of America US and Canada equity strategist Ohsung Kwon wrote in a note to clients last month.

"Inventory levels are now just back to normal, a re-stocking cycle could be next, and early indicators suggest a manufacturing upcycle ahead. Historically, when the manufacturing PMI has been in expansion, S&P 500 EPS has grown 12% on average on a trailing [12-month] basis."

Kwon's team at Bank of America noted this turnaround while boosting its S&P 500 earnings forecast this year to $250 from $235.

Something to watch on McDonald's

Mon, 1 April 2024 at 11:50 am GMT-4, Brian Sozzi

True story.

After burning 3,251 calories on Friday (did two one-hour boot camp training classes), I decided to reach for a rare fast food treat: a McDonald's (MCD) spicy chicken sandwich and a diet soda. I didn't look at the price for the product on the menu board and I quickly tossed the receipt. But I do remember leaving there feeling the purchase was a lot for a chicken sandwich and a diet soda.

So a new McDonald's note today from Bernstein analyst Danilo Gargiulo is well timed.

Gargiulo's point is that McDonald's has been more aggressive the past year in raising prices to combat inflation. In turn, a trip to McDonald's may no longer be affordable to lower-income consumers and traffic could take a hit. This cohort's go-to in a land of McDonald's inflation: food at home.

How aggressive McDonald's has been on price hikes is neatly captured in the below chart from Gargiulo.

Given the prices on these signature fast food burgers, maybe a frozen dinner from Conagra (CAG; reports earnings later this week) is the better financial option for most!

The inflationary burger. (Bernstein)

Cocoa rally persists, hits new high of $10,193

Mon, 1 April 2024 at 11:38 am GMT-4

Cocoa (CC=F) futures rallied to new highs on Monday, hitting a record $10,193 per metric ton during trading.

The commodity rose above the $10,000 level last week. Prices have risen more than 250% over the past year.

Severe weather in West Africa and damaged crops have fueled cocoa's massive rally. Analysts have also pointed to large daily price swings, signaling speculative trading.

"What really needs to happen is the exchanges need to stem and curb the speculation happening in the market," Blue Line Futures chief market strategist Phillip Streible told Yahoo Finance in a recent interview.

"You need to see a better crop over in West Africa and you need to see some of that demand really come down. So it's a combination of things that probably won't resolve anytime soon."

United asks pilots to take time off amid Boeing delivery delays

Mon, 1 April 2024 at 11:08 am GMT-4, Ines Ferré

United Airlines (UAL) has asked pilots to take voluntary unpaid time off in May amid delays in Boeing (BA) plane deliveries.

"We can confirm that due to the recent delays in Boeing deliveries, our forecasted block hours for 2024 have been reduced and we are offering our pilots voluntary programs for the month of May to reduce excess staffing," a company spokesperson told Yahoo Finance.

Boeing's recent safety issues have impacted delivery timelines for carriers. Last month United's CEO Scott Kirby revealed the airline asked Boeing to stop building 737 Max 10 jets, which have yet to be certified. Instead the airline will use a smaller variant of the aircraft along with Airbus planes.

United Airlines stock rose more than 1% on Monday. Shares are up roughly 18% year to-date.

Gold trades at new highs as investors bet on rate cuts

Mon, 1 April 2024 at 10:17 am GMT-4, Ines Ferré

Gold (GC=F) touched new highs on Monday, following a series of records in March. The precious metal futures rose more than 1% to trade as high as $2,265 per ounce.

Gold has been rallying on the expectation that Fed officials will lower interest rates this year.

The Federal Reserve's preferred inflation gauge released on Friday came in line with expectations. The print was interpreted by investors as another sign of a likely interest rate cut as early as June.

Gold is up more than 6% year to date.

Stocks mixed to kick off second quarter

Mon, 1 April 2024 at 9:32 am GMT-4, Ines Ferré

Stocks were mixed on Monday to kick off 2024's second quarter and the start of a new month of trading.

The S&P 500 (^GSPC) opened around the flatline while the Dow Jones Industrial Average (^DJI) dipped slightly. Investors were keeping a close eye on the blue-chip Dow Jones as it has been inching towards the 40,000 level in recent sessions. The tech-heavy Nasdaq Composite (^IXIC) rose 0.6%.

Wall Street has begun 2024 on a high note: The benchmark S&P 500 has set 22 fresh closing records so far this year as part of its best first quarter since 2019.

A softening read of the Federal Reserve's preferred inflation gauge released on Friday was interpreted by investors as another sign of a likely interest rate cut as early as June.

Let the pre-earnings warnings on Apple begin

Mon, 1 April 2024 at 8:25 am GMT-4, Brian Sozzi

With Apple's (AAPL) stock down 11% year to date — the second worst "Magnificent Seven" performer behind Tesla's (TSLA) 30% drop — Wall Street may be ready to sound the alarm on the next couple of earnings reports from the tech bellwether.

The first one out of the gate negatively ahead of Apple's earnings in a few weeks is Loop Capital analyst Ananda Baruah.

Baruah now projects Apple's overall sales and profits to decline year over year in calendar 2024 for the first time since 2016.

The reasons behind the call:

• iPhone unit shipments are "simply too soft" due to weak "organic demand" and competitive forces.

• Competition from Huawei and Xiaomi is "making a material impact."

• iPhone average selling prices are "flattening out," says Baruah.

Here comes earnings season

Mon, 1 April 2024 at 8:15 am GMT-4, Brian Sozzi

Believe it or not, another earnings season begins on April 12 with the big banks.

One thing to start pondering is the divergence between what Wall Street is expecting and what companies are expecting, with the backdrop of markets at a record.

A few fresh stats on this front from FactSet:

Wall Street: Analysts have lowered their earnings estimates for the first quarter by a smaller margin than average. On a per-share basis, estimated earnings for the first quarter have dropped by 2.5% since Dec. 31. This decline is smaller than the five-year average drop of 3.7% and 10-year average decrease of 3.4%. The vibe: analysts are feeling more optimistic than the norm ahead of first quarter earnings season, likely due to the market's robust advance.

Companies: Approximately 112 companies from the S&P 500 have issued first quarter earnings guidance, with 79 issuing warnings and the rest upside versus estimates. The number of companies issuing negative EPS guidance is above both the five-year and 10-year averages, noted FactSet. The vibe: companies don't share Wall Street's enthusiasm

Beware of the semiconductor stocks in April?

Mon, 1 April 2024 at 8:00 am GMT-4, Brian Sozzi

A good chart on the semis from BTIG’s technical analyst Jonathan Krinsky is below. It shows how quickly the Philadelphia Semiconductor Index (SOX) has advanced in a relatively short period (compared to prior five-month periods).

Can the gains continue? The semi-bulls may have to contend with April seasonal vibes.

Krinsky noted that the SOX has been negative for 8 of the last 10 Aprils.

The SOX has gone wild in recent months. (BTIG)

Why Alphabet’s stock is underperforming

Mon, 1 April 2024 at 7:45 am GMT-4, Brian Sozzi

You maybe didn’t realize this, given the meteoric moves in AI stocks and the hype around the technology, but Alphabet’s (GOOGL) stock isn’t really participating. Shares of Alphabet are up 8% year to date, lagging the Nasdaq Composite’s 9% gain and S&P 500’s 10.16% advance.

Jefferies analyst Brent Thill is out with a few reasons this morning for why the stock is sucking wind.

Out of all of them, I am most intrigued by the call out on management concerns. CEO Sundar Pichai has had a challenging 12 months on the AI front — from falling behind Microsoft (MSFT) on AI to not quieting concerns about AI bias. Is he in the hot seat with investors? I wouldn’t go that far yet, but it warrants watching.

Those Jefferies mentions:

1. Generative AI is a long-term threat to Alphabet's core search behemoth.

2. Thill says "some investors" are asking if Pichai has led with "enough force" in responding to the AI threat. He adds it has been eight months without an update on Ruth Porat's position inside the company — she was rotating out of the CFO role.

3. Google Cloud backlog hasn't been growing as quickly as Amazon (AMZN), suggesting market share loss.

Inside the markets to kick off April

Mon, 1 April 2024 at 7:30 am GMT-4, Brian Sozzi

April 8 is total solar eclipse day. You may also need a pair of sunglasses when looking at how markets and certain stocks will start in April.

A little data analysis from yours truly (hat tip to Yahoo Finance’s Jared Blikre for the stats):

• The S&P 500 is the best-performing major US index year to date, up 10.16%. (It's the only major index to be up by double-digits.)

• Four well-known sector ETFs are up by double-digits year to date: Energy (XLE), Financials (XLF), Industrials (XLI), and Communication Services (XLC). Energy is the best performer, tracking the renewed move higher in oil prices.

• The main real estate ETF, the Real Estate Select Sector SPDR Fund (XLRE), is down 1.3% year to date, one of the worst performers despite the prospect of lower interest rates at some point this year.

• Two of the "Magnificent Seven" stocks — Tesla (TSLA) and Apple (AAPL) — are down double-digit percentages year to date.

• The best Dow performer year to date is Disney (DIS), +35% and hovering at a record high ahead of this week’s showdown between Disney CEO Bob Iger and activist Nelson Peltz. More on that from Yahoo Finance’s Alexandra Canal here.

• The worst Dow performer year to date: Boeing (BA), -25%. No surprise here.

• The best-performing Nasdaq 100 stock that is not named Nvidia (NVDA): Constellation Energy (CEG), +58%. Interesting.

• The worst-performing Nasdaq 100 stock not named Tesla: Sirius (SIRI) -29%, despite a major rebrand last fall designed to improve the narrative amongst investors.