Wall Street falls as high bond yields, sinking health stocks weigh

02 February, 2018, 21:10 | Author: Celia Hoffman
  • US stocks retreat from records ahead of packed week for corporate earnings

The Dow Jones industrial average dropped 241 points and briefly fell 352 points, with UnitedHealth as the biggest decliner. The S&P 500 broke a record streak without consecutive drops of 0.5%. Leading indices in Europe and Asia also closed deep in the red.

The Dow Jones Industrial Average rose 210 points, or 0.8%, to 26287. Shares of Apple fell 2.1 per cent on news that the company will halve production of its $999 iPhone X smartphone.

Yesterday's falls came shortly after senior executives at Goldman Sachs and Bank...

Pointing to the chart below, Higgins says "it is quite common for interest rates, government bond yields and equity prices to rise at the same time", adding the caveat that it usually requires investors to have a "growing appetite for risk and a positive view of corporate earnings".

Health insurer Anthem was also among the S&P 500's best performers.

"We are entering a new era in the USA with where the 10-year is headed", Antonelli said.

The sell-off, volatility and rising bond yields mark a turn for USA markets that have been making gains for months, racing past one milestone after another.

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United States markets have suffered a second day of steep losses, as investors dumped health care companies and Apple.

The Dow climbed more than 100 points on Wednesday, signaling that the sell-off earlier this week may have been a blip instead of the start of a more serious downturn.

The selloff set traders in the options market fretting about a near-term shock to equities and the Cboe Volatility Index, the most widely followed barometer of expected near-term stock market gyrations, closed up 0.95 points at 14.79, its highest close since August 17. The S&P 500 still is up 6.7 per cent since the end of 2017.

US Treasury yields were at multi-year highs, extending gains from last week on the back of strong economic data and as investors braced for major central banks to step back from ultra-easy monetary policies. The Japanese yen strengthened 0.17 per cent versus the greenback at 108.79 per dollar.

Lockheed Martin rose 2.3 per cent after the weapons supplier forecast higher 2018 earnings.

Late Tuesday, President Trump will deliver his first State of the Union address.

Harley-Davidson Inc closed down 8.0 percent after announcing it would close a Kansas City plant in the face of declining shipments. 17 and its worst two-session percentage slump since September 9, 2016. Drug stocks such as Eli Lilly and Merck slumped on Wednesday, while the iShares NASDAQ Biotechnology ETF retreated 1%.

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