By Yasin Ebrahim
Investing.com — The Dow gave up gains to close lower Monday, as falling health care and energy stocks offset tech strength in tech after Treasury yields slipped amid ongoing expectations that the Federal Reserve will slow its pace of rate hikes.
The Dow Jones Industrial Average slipped 0.34%, or 112 points, the Nasdaq Composite was up 0.63%, and the S&P 500 fell 0.1%
Energy and health care and weighed on the broader market, with the latter hurt by a fall in DexCom (NASDAQ:DXCM), Baxter International Inc (NYSE:BAX), and Regeneron Pharmaceuticals Inc (NASDAQ:REGN), which fell more than 5% after reporting lower sales of its Eylea treatment.
Energy, however, traded lower even as ongoing demand optimism from China’s reopening and a weaker dollar helped push oil prices higher.
The U.S. 10-year Treasury yield slipped – extending its move lower from Friday, when the December jobs report showed cooling wage pressures – helping rate-sensitive sectors including tech flourish, as investors continued to price in a less hawkish Fed.
Fed funds futures showed bets on the peak level of rates slipped below 5% from a week ago.
Apple (NASDAQ:AAPL), Microsoft (NASDAQ:MSFT), and Alphabet (NASDAQ:GOOGL) led the gains in tech, while semiconductor stocks were lifted by a more than 5% rise in NVIDIA (NASDAQ:NVDA) following a slew of positive remarks from Wall Street.
Nvidia was named as a top pick by Wells Fargo amid expectations for the chip industry downturn to bottom in the first half of the year. Credit Suisse said Nvidia remained its top pick “on the basis of derisked gaming and catalysts from Grace/Hopper [superchip] this year.”
Broadcom (NASDAQ:AVGO) and Qualcomm slashed gains to end lower after Bloomberg reported that Apple aims to drop the use of Qualcomm (NASDAQ:QCOM) and Broadcom chips in its devices by 2024 and 2025.
Tesla (NASDAQ:TSLA), meanwhile, led consumer discretionary stocks higher to extend its rebound following its plunge to fresh 52-week lows last week.
Neuberger Berman senior research analyst Daniel Flax said Monday he would be a “buyer of Tesla at current levels,” describing the EV maker’s business model as “powerful” as it enables new services like self-driving to be delivered.
Cruise stocks were also involved in the heavy lifting for consumer stocks and continued to rack up gains, with Norwegian Cruise Line Holdings Ltd (NYSE:NCLH) and Carnival Corporation (NYSE:CCL) up more than 5% and 2%, respectively.
Lululemon Athletica (NASDAQ:LULU), however, failed to participate in the rally, falling more than 9% after cutting its guidance on margins amid rising costs.
The company expects gross margins to fall 90 basis points to 110 basis points, compared with prior guidance of an increase of 10 basis points to 20 basis points.
In other news, Bed Bath&Beyond (NASDAQ:BBBY) rallied 24% just ahead of the home goods retailer’s quarterly earnings report which is expected to show a loss of $2.38 on revenue of $1.33 billion.
In cryptocurrency news, bitcoin rose more than 1% hitting a more than three-week high, sending crypto-related stocks including Marathon Digital Holdings Inc (NASDAQ:MARA), Coinbase Global Inc (NASDAQ:COIN), and Riot Blockchain (NASDAQ:RIOT) sharply higher.