Markets News, Jan. 2, 2024: Nasdaq Sinks as Apple Loses $100B in Market Cap; Bitcoin Jumps Above $45K

Equity Indexes Wrap: Healthcare Stocks Lead the Dow Higher While Tech Mega Caps, Chip Stocks Torpedo the Nasdaq

The Dow

Healthcare led the index higher, with Merck (MRK) and Amgen (AMGN) gaining 3.9% and 3.3%, respectively. Insurer UnitedHealth Group (UNH) added 2.5%, and Johnson & Johnson (JNJ) climbed 2.1%. 

Intel (INTC) led the index lower, falling 4.9% alongside other chip stocks after Dutch semiconductor manufacturing equipment maker ASML said it would restrict shipments of some technology to China at the Dutch government’s behest. 

Apple (AAPL) lost 3.6% after Barclays downgraded the stock to “underweight,” citing disappointing iPhone 15 sales and a grim outlook for its hardware business. 

Boeing (BA) shares fell 3.4% after Goldman Sachs analyst Noah Poponak took the stock off his conviction list.

Salesforce (CRM) and Microsoft (MSFT) fell 2.6% and 1.4%, respectively, as investors took profits from each stock’s major gains last year. 

The S&P 500

Cruise operators led the index lower after a banner year in 2023. Norwegian Cruise Line Holdings (NCLH) fell 8.6%, while Royal Caribbean (RCL) lost 7.2% and Carnival Corp (CCL) retreated 6.7%. 

Uber (UBER), one of the index’s newest entrants and also one of last year’s top-performing components, fell 5.2% as investors pivoted out of 2023’s winners. 

Big tech tumbled, dragging down the index. Nvidia (NVDA) and Meta Platforms (META), the S&P 500’s best-performing stocks last year, fell 2.7% and 2.2%, respectively. Broadcom (AVGO) sank 2.8% and Alphabet (GOOGL) slipped 1.1%. 

Las Vegas Sands (LSV) gained 4.3% after Macau’s Gaming Inspection and Coordination Bureau said the region’s casinos raked in nearly $23 billion in 2023, about as much as they earned in the prior three years combined. Competitor Wynn Resorts (WYNN) rose 3.8%.

Tapestry (TPR) shares climbed 3.7% after Morgan Stanley raised its price target on the Kate Spade and Coach owner’s stock.

Centene Corp. (CNC) rose 3.5% after Wells Fargo analysts upgraded the stock to “overweight” from “equalweight.”

The Nasdaq 100

ASML (ASML) fell 5.3%, making it one of the index's worst-performing stocks after it was forced to halt shipments of some products to China, part of a broad effort by the U.S. and its allies to restrict the country’s access to advanced semiconductors and semiconductor equipment. 

Other semiconductor stocks were caught up in the fall-out, like Advanced Micro Devices (AMD), which tumbled 6%. ASML peers Applied Materials (AMAT) and Lam Research (LRCX) each lost more than 4%.

Moderna (MRNA) shares jumped 13% after analysts at Oppenheimer upgraded the stock to “overweight,” citing its drug pipeline and their expectation that the company will have five new products on the market by 2026. 

Health stocks broadly outperformed. Biogen (BIIB) added 3.5% while Regeneron (REGN) rose 3% and Gilead (GILD) climbed 2.8%. 

Kraft Heinz (KHZ), one of the index’s worst performers last year, advanced 3.1% to rise for a seventh consecutive session. 

Moderna Stock Surges on Optimism of Bringing More Products to Market

Moderna Inc. (MRNA) shares soared 15% Tuesday as the vaccine maker got two pieces of good news.

First, Chief Executive Officer (CEO) Stephane Bancel said he believes the company would experience sales growth in 2025. In a letter to shareholders Tuesday, Bancel said the company is optimistic as it expects the launch of Moderna’s respiratory syncytial virus (RSV) vaccine candidate this year and could potentially launch a combination flu/COVID-19 shot as early as 2025.

Along with Bancel’s comments, Moderna shares got a lift Tuesday when brokerage firm Oppenheimer upgraded the stock to "outperform," arguing that Moderna could develop ways to use its mRNA technique to fight diseases beyond COVID-19 over the next few years. Analysts at Oppenheimer led by Hartaj Singh wrote they believe the company will have five new products on the market by 2026.

Moderna shares tumbled about 40% last year, making it one of the S&P 500's worst-performing stocks.

-Bill McColl

Apple Stock Tumbles Following Barclays Downgrade

Shares of Apple (AAPL) sank 4% Tuesday, wiping more than $100 billion from its market capitalization after Barclays expressed doubts about the health of iPhone demand. 

Barclays analyst Tim Long downgraded the company’s stock to “underweight” and warned clients in a research note that iPhone 15 sales have been “lackluster.” Long also cautioned that muted demand for Apple’s best-selling product could impact sales of its next model, the iPhone 16, and other hardware categories like Macs, iPads, and wearables.

Apple’s hardware sales and total revenue have declined for four straight quarters, yet its stock steadily climbed over the same period. Apple’s fast-growing services unit was one bright spot for the company last year, but Long expects growth to slow and regulatory scrutiny over the company’s App Store and revenue-sharing agreements with Google (GOOGL) to intensify. 

Barclays’ bearish outlook puts the firm squarely in the minority. Of the 44 analysts covering Apple tracked by the Wall Street Journal, 22 rate the stock a buy, and 5 are overweight—one step below “buy” in terms of conviction. Just 4 analysts have assigned the tech giant a rating of “underweight” or “sell.”

Midday Movers: Moderna Rises After an Upgrade, While Apple Falls Following Downgrade

Shares of Advanced Micro Devices (AMD) and other semiconductor firms fell after the Dutch government curbed exports of some chipmaking equipment by ASML Holding N.V. (ASML) to China.

Apple (AAPL) shares also slumped after Barclays downgraded the stock and cut the price target, pointing to concerns about iPhone demand and the company’s overall hardware sales.

Shares of Norwegian Cruise Line Holdings (NCLH) and rival cruise lines dropped as naval military action in the Middle East region raised worries about sea travel.

Moderna (MRNA) shares soared as CEO Stephane Bancel indicated the vaccine maker expects sales to grow in 2025, and as Oppenheimer analysts upgraded the stock, saying its mRNA technique used in COVID-19 vaccines could be used to fight other diseases over the next few years.

An upgrade and price target increase from Wells Fargo sent Centene (CNC) shares higher. Tapestry (TPR) shares increased when JP Morgan raised the price target, arguing earnings growth for the owner of Coach and Kate Spade brands will accelerate.

-Bill McColl

ASML Falls After The Netherlands Curbs Exports of Some Tech to China

American depositary receipts (ADRs) of Netherlands-based ASML Holding N.V. (ASML) dropped over 3% in intraday trading Tuesday as Dutch officials blocked the semiconductor production equipment maker from exporting some of its products to China.

The company said a license for shipment of its NXT:2050i and NXT:2100i lithography systems in 2023 “has been partially revoked by the Dutch government, impacting a small number of customers in China."

The move came as the U.S. has also ramped up restrictions on certain tech exports to China over concerns about national security.

ASML said it doesn’t believe that the decision by Amsterdam or the latest American export controls will impact its 2023 financial outlook.

Despite Tuesday's decline, ASML Holding N.V. ADRs have gained more than 30% over the past year.

-Bill McColl

Tesla Spared Big Tech Sell-Off After Meeting 2023 Delivery Goals

Shares of Tesla (TSLA) were little changed Tuesday morning, bucking the trend among its Magnificent Seven peers, after the electric vehicle leader said it had met its 2023 production and delivery goals. 

The company produced 495,000 vehicles in the fourth quarter, bringing its 2023 total to nearly 1.85 million, a 35% increase over 2022. It delivered about 485,000 last quarter for a total of 1.81 million in 2023. Both figures were slightly ahead of Wall Street estimates and the guidance Tesla issued in October. 

Still, America's largest EV maker trails its main competitor on the global stage, China's BYD Co. (BYDDY), which delivered more than 3 million fully electric and hybrid vehicles last year.

Bitcoin Surges to 21-Month High

The price of Bitcoin skyrocketed Tuesday to its highest since April 2021 as anticipation of a spot exchange-traded fund built. 

Investors are increasingly convinced that the Securities and Exchange Commission (SEC) this week will approve at least one of the many spot Bitcoin ETF applications it is currently considering. The regulator kicked the can down the road last year but it now faces a Jan. 10 deadline to either approve or deny Ark Invest's ARK 21Shares Bitcoin ETF.

Many analysts expect that the SEC will decide on several ETFs simultaneously to avoid giving one provider a head start. Financial giants BlackRock, Fidelity, and Invesco are among the asset managers whose ETF applications could be approved. 

Federal regulators have long bristled at the idea of an ETF backed by Bitcoin, citing its susceptibility to fraud and market manipulation. But the odds of approval increased significantly last year when a court ruled that the SEC needed more reason than it had provided for denying asset manager Grayscale’s application to convert its Bitcoin trust into an ETF. 

One company that’s likely to win regardless of which applications are approved is Coinbase (COIN), which has been named the asset custodian in the majority of the ETF applications before the SEC. 

Stocks Making the Biggest Moves Premarket

Gains:

• Coinbase Global (COIN): Shares of the cryptocurrency exchange gained about 3% as the price of Bitcoin shot up above $45,000 for the first time since April 2022. 
• Frontline Plc (FRO): Shares of the oil shipper gained 2%, following oil prices higher after Iran sent a warship to the Red Sea, ratcheting up tensions in the key shipping corridor. 
  

Losses:

• ASML Holdings N.V. (ASML): Shares of the semiconductor manufacturing equipment maker fell 4% after the Dutch government ordered it to halt some shipments to China. 
• Apple Inc. (AAPL): Shares of the tech giant fell 2% after Barclays downgraded the stock to “underweight,” citing weak demand for the iPhone 15. 
• Baidu Inc. (BIDU): Shares of the Chinese tech firm fell about 2% after it called off its $3.6 billion acquisition of social media company JOYY’s live-streaming unit, YY Live. JOYY (YY) shares fell nearly 10% in early trading. 

Futures Fall To Start 2024

Futures contracts connected to the Dow Jones Industrial Average were down 0.6% in early trading Tuesday.

S&P 500 futures fell 0.8%.

Nasdaq 100 futures were 1.1% lower a little more than an hour before markets opened.