Dow slides at the open as stock rally loses steam

On Mar 4, 2024

US stocks retreated on Monday to put a record-setting rally on pause, as investors girded for a week where Federal Reserve Chair Jerome Powell’s testimony and the monthly jobs report could put equity gains to the test.

The S&P 500 (^GSPC) shed about 0.1% after ending Friday with its 16th weekly win in 18 weeks. The Dow Jones Industrial Average (^DJI) fell roughly 0.3%, while the tech-heavy Nasdaq Composite (^IXIC) slid 0.2%.

Stocks have racked up gains amid a relentless AI-spurred run-up in techs, which helped the Nasdaq Composite (^IXIC) to finally nail a fresh all-time high after a yearslong wait. That tech rally, and Nvidia’s (NVDA) breakneck rise to a $2 trillion valuation in particular, has prompted concerns about a building bubble — though some analysts are less worried.

Also on Monday, bitcoin’s (BTC-USD) continued rise saw the cryptocurrency top $66,000 to move closer to a record high, while Japan’s Nikkei 225 stock index (^N225) breached the key 40,000 level for the first time.

A dose of reality could lie ahead for the high hopes and the hype, when the Fed’s Powell steps up to speak and the February jobs data arrive. Both will play into calculations for interest-rate cuts and shed light on whether the US economy is headed for a “soft landing” or stagflation. Powell is set to give testimony to Congress from Wednesday, while the labor data is due on Friday.

Meanwhile, in a shot across the bows for Big Tech, EU antitrust regulators fined Apple (AAPL) almost $2 billion over App Store restrictions on Spotify (SPOT) and other music streaming services. Apple shares slipped 3% after the news.

Among big movers, Macy’s (M) stock jumped over 14% after bidders Arkhouse and Brigade raised their buyout offer to $6.6 billion, a 33% premium to the closing price on Friday.

Spirit Airlines (SAVE) shares fell more than 12% and JetBlue stock (JBLU) rose 5% after the low cost carriers announced the termination of their $3.8 billion merger agreement. A federal judge blocked the deal back in January.

Meanwhile, shares in Super Micro Computer (SMCI) popped 18% on Monday ahead of the AI server maker’s entry on the S&P 500.

Live5 updates

Mon, March 4, 2024 at 3:33 PM GMT

Another Wall Street strategy team is out with a more optimistic outlook on how far stocks can run this year.

In a note to clients on Sunday, Bank of America’s US equity and quantitive strategy team led by Savita Subramanian boosted their year-end target for the S&P 500 (^GSPC) to 5,400 from 5,000. The prediction for 5,400 is in line with a recent call from UBS and is the most bullish projection for the benchmark average this year, among strategists tracked by Yahoo Finance.

“Bull markets end with euphoria – we’re not there yet,” Subramanian wrote. “Sentiment has improved, but areas of euphoria are limited (AI, GLP-1).”

BofA’s move is the fifth boosted price target from strategists tracked by Yahoo Finance in the last month. The more optimistic outlooks come as stocks have ripped higher to start the year. The S&P 500 and Nasdaq Composite just closed out their best February’s since 2015, supported by a second-straight quarter of earnings growth and an increased confidence on the trajectory of the US economy.

Subramanian noted that fourth quarter earnings grew 4% compared to the year prior and analysts aren’t cutting their forecasts for the current quarter at their normal rate. This comes as Bank of America’s economics research team just boosted their outlook for growth this year, too. That combination of an increased earnings outlook and a more bullish outlook for the US economy has been a common thread in the recent S&P 500 year-end target boosts across Wall Street.
Mon, March 4, 2024 at 3:15 PM GMT

Macy’s stock jumps as private equity firm ups bid to $6.6 billion amid buyout battle

Macy’s (M) stock jumped as much as 16% on Monday after activist shareholder Arkhouse Management upped its buyout bid to $6.6 billion for the iconic retailer. Macy’s had rejected a prior $5.8 billion offer from the private equity firm and its partner, Brigade Capital in late January.

As Yahoo Finance’s Brooke DiPalma reports, Macy’s (M) is looking to turn over a new leaf, but a battle to take it private is growing and doubts linger on whether the company can engineer a comeback with its current plans.

Tony Spring, freshly minted as CEO a month ago, acknowledges that the business needs to change.

“We are not going to leave Macy’s as it is today. It’s foolhardy to think that leaving the business as it exists today is a recipe for success in the future,” Spring told Yahoo Finance.

Spring said the brand will “evolve,” adjust its product offering and integrate its physical and digital presence “thoughtfully,” but to do so “with the appropriate action… time and support of our organization.”

Arkhouse Management’s new bid released on Sunday shows the activist investor isn’t waiting for the results.

Read more here.
Mon, March 4, 2024 at 2:35 PM GMT

Stocks pause rally,…

Dow slides at the open as stock rally loses steam

Macy’s stock jumps as private equity firm ups bid to $6.6 billion amid buyout battle

Stocks pause rally,…