Dow sinks nearly 400 points, yields rise to 2024 highs

Live4 updates

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  Tue, April 2, 2024 at 6:36 AM MST

  Stocks open lower after yields spike to 2024 highs

  Stocks were lower on Tuesday as bond yields rose for the second-straight day.

  The Dow Jones Industrial Average (^DJI) slipped almost 1%, or over nearly 400 points, setting the blue-chip index back from a bid to reach the key 40,000 level. The S&P 500 (^GSPC) shed 0.8%, while the tech-heavy Nasdaq Composite (^IXIC) fell 1.2%.

  The 10-year Treasury yield (^TNX) popped roughly six basis points to nearly 4.39%, its highest level of 2024. This move comes after a hotter than expected reading on price increases in March’s ISM stoked inflation concerns and sent the 10-year Treasury yield up more than 10 basis points on Monday.

  The 10-year Treasury yield is now at its highest level since November and has surpassed a level Morgan Stanley chief investment officer Mike Wilson recently flagged as critical for stock investors.

  “We view 4.35% on the 10-year US Treasury yield as an important technical level to watch for signs that rate sensitivity may increase for equities,” Wilson wrote in a note on March 17.

  Wilson noted that large caps have been less sensitive to rates recently. “Small caps are likely to show more rate sensitivity than large caps on a move higher in yields,” he said.

  To Wilson’s point, the small cap Russell 2000 index (^RUT) sagged more than 1% in early trade Tuesday.

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  Tue, April 2, 2024 at 6:18 AM MST

  Tesla shares slide after delivery miss

  Tesla (TSLA) stock stumbled in pre-market trading, falling about 7% after the company delivered fewer cars than expected in the first quarter.

  Tesla announced it delivered 386,810 cars in the first quarter, below Wall Street’s estimates for 449,080. This marked the first annual Q1 decline in deliveries since 2020.

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  Tue, April 2, 2024 at 4:49 AM MST

  Consumer stocks in focus with gas prices on the rise

  Stocks levered to the spending of consumers could become ice cold this spring.

  Oil prices hit $85 a barrel this morning, a five-month high. The advance in oil — which may be starting to weigh on the broader market — has lit a fire under nationwide gas prices. The national average for gas prices of $3.51 a gallon last week was unchanged week on week — that after prices rose for four straight weeks.

  Even still, gas prices were up 16 cents from a month ago.

  “While we seem to be nearing a short-term peak, one word of caution for those in the Mid-Atlantic and Northeast: you haven’t yet finished the transition to summer gasoline, so you may experience some sticker shock in a few weeks. Be prepared for somewhat of a punch. For the rest of the nation, so long as we don’t see extenuating circumstances, we’re likely close to a top in prices. Let’s hope it pans out and sticks!” said Patrick De Haan, head of petroleum analysis at GasBuddy in a new blog post.

  As gas prices have risen, the Consumer Discretionary Select Sector SPDR Fund (XLY) has dropped 1.4% the past month – perhaps on fears of consumer spending. Key discretionary retailers in the fund such as Amazon (AMZN), Starbucks (SBUX) and Nike (NKE) have relatively…