clear
Tuesday October 16th, 2018 4:40AM

US stocks sink sharply as rates resume their climb

By The Associated Press
Related Articles
  Contact Editor

NEW YORK (AP) — U.S. stock indexes dropped sharply Wednesday, and the S&P 500 was on pace for its worst day since June, as interest rates resumed their climb.

Treasury yields have jumped over the last week, which has weighed on stocks around the world, and the 10-year yield once again touched its highest level in seven years on Wednesday.

The rise in rates is weighing particularly heavily on areas of the market that had earlier been the biggest winners, and technology stocks had some of the morning's steepest losses.

KEEPING SCORE: The S&P 500 was down 39 points, or 1.4 percent, at 2,841 as of 11:10 a.m. Eastern time. It's on pace for its fifth straight decline and is close to its lowest level in two months.

The Dow Jones industrial average lost 363, or 1.4 percent, to 26,067, and the Nasdaq composite dropped 165, or 2.1 percent, to 7,573.

WINNERS AREN'T WINNING: Tech stocks and companies that sell non-essentials to consumers have been some of the top performers over the last year, nearly doubling the performance of the S&P 500. They've also dropped more than the rest of the market so far this month.

Tech stocks in the S&P 500 fell 2.7 percent Wednesday for the steepest loss among the 11 sectors that make up the index. Companies that sell non-essentials to consumers dropped 1.7 percent.

YIELDS: The biggest driver for the market over the last week has been interest rates, which began spurting higher following several encouraging reports on the economy. Higher rates can slow economic growth, erode corporate profits and make investors less willing to pay high prices for stocks.

The 10-year Treasury yield rose to 3.22 percent from 3.20 percent late Tuesday after earlier touching 3.24 percent. It was at just 3.05 percent early last week. The two-year yield rose to 2.88 percent from 2.87 percent, and the 30-year yield climbed to 3.38 percent from 3.37 percent.

INFLATION WATCH: U.S. wholesale prices rose 0.2 percent in September from the prior month, matching economists' expectations. The Labor Department said its index of producer prices has climbed 2.6 percent over the last 12 months, the smallest increase since January.

Economists noticed some increasing trends in the data, and inflation has crept higher this year, but there are few signs yet of rapid acceleration. That's good news for markets: If inflation were to spike, it would push the Federal Reserve to get more aggressive in raising interest rates.

SEARED: Sears Holdings nosedived after the Wall Street Journal reported that the struggling retailer hired an advisory firm to prepare a bankruptcy filing that could come within days. The stock fell 35.7 percent to 38 cents in morning trading. It was more than $40 five years ago.

Sears has closed hundreds of stores and sold several famous brands or put them on the block as it sees more customers abandon its stores.

MARKETS ABROAD: Japan's Nikkei 225 added 0.2 percent, South Korea's Kospi dropped 1.1 percent and the Hang Seng in Hong Kong gained 0.1 percent.

The CAC 40 in France dropped 1.9 percent, Germany's DAX lost 2 percent and the FTSE 100 in London fell 1.1 percent.

Stocks from emerging markets were also hard hit. Investors see many of these countries as being vulnerable to higher U.S. interest rates, which can pull away investment dollars. Brazil's Bovespa lost 1.9 percent.

COMMODITIES: Benchmark U.S. crude oil fell $1.49 to $73.47 per barrel. Brent crude, the international standard, lost $1.40 to $83.60.

Gold was down 80 cents to $1,190.70 per ounce.

CURRENCIES: The dollar fell to 112.67 Japanese yen from 113.05 yen late Tuesday. The euro rose to $1.1522 from $1.1496 and the British pound rose to $1.3197 from $1.3146.

  • Associated Categories: Associated Press (AP), AP Business, AP Business - Economy, AP Business - Financial Markets
© Copyright 2018 AccessWDUN.com
All rights reserved. This material may not be published, broadcast, rewritten, or redistributed without permission.
Sale, Cora make early exits for Red Sox in ALCS Game 1
Red Sox ace Chris Sale, manager Alex Cora make early exits in Game 1 of ALCS
1:24AM ( 26 minutes ago )
US pastor freed from Turkey prays with Trump in Oval Office
American pastor Andrew Brunson prays with Trump in Oval Office after being freed from confinement in Turkey
1:20AM ( 30 minutes ago )
Newspaper says Turkey has audio of Saudi writer's slaying
Pro-government Turkish newspaper: Turkish officials have audio recording of alleged killing of journalist Khashoggi
1:11AM ( 39 minutes ago )
Associated Press (AP)
Tester goes on the attack in Montana US Senate race debate
U.S. Sen. Jon Tester is going on the attack against Republican candidate Matt Rosendale in Montana's tightening Senate race
11:51PM ( 1 hour ago )
Florida insurers to weather effects of Michael, analysts say
Florida's disjointed property insurance system that relies almost exclusively on small and midsize companies will take a multi-billion dollar loss from Hurricane Michael, but has sufficient reserves and backups that providers should be able to pay claims
10:51PM ( 2 hours ago )
Netflix deal could boost all parts of New Mexico
While Albuquerque has been named as Netflix's newest production hub, those in the industry say the benefits are likely to reach all parts of New Mexico
7:58PM ( 5 hours ago )
AP Business
Trump to meet Saturday with American pastor freed by Turkey
President Donald Trump is awaiting an Oval Office meeting Saturday with Andrew Brunson, the American pastor who returned to the U.S. around midday after he was freed from nearly two years of detention in Turkey
1:31PM ( 12 hours ago )
IMF-World Bank ends meetings with call to brace for risks
IMF-World Bank ends meetings with call to brace for risks as trade tensions, debt problems build
4:54AM ( 20 hours ago )
The Latest: IMF's Lagarde planning to attend Saudi meeting
The Latest: IMF's Lagarde planning to attend Saudi conference despite writer's disappearance
3:54AM ( 21 hours ago )
AP Business - Economy
US stocks are on track for gains after two-day tumble
U.S. stocks are on track to finish a wobbly day moderately higher, clawing back some of the steep drops they suffered over the previous two days.
3:33PM ( 1 day ago )
Stock market experts say this is a stumble, not a plunge
Jumpy markets upset months of smooth sailing for investors
2:26PM ( 1 day ago )
US stocks give up big early gain after two-day tumble
US stocks give up an early gain and are mixed after falling more than 5 percent over the previous two days
2:26PM ( 1 day ago )
AP Business - Financial Markets
Sale, Cora make early exits for Red Sox in ALCS Game 1
Red Sox ace Chris Sale, manager Alex Cora make early exits in Game 1 of ALCS
1:24AM ( 26 minutes ago )
Newspaper says Turkey has audio of Saudi writer's slaying
Pro-government Turkish newspaper: Turkish officials have audio recording of alleged killing of journalist Khashoggi
1:08AM ( 41 minutes ago )
US pastor freed from Turkey prays with Trump in Oval Office
American pastor Andrew Brunson prays with Trump in Oval Office after being freed from confinement in Turkey
1:20AM ( 30 minutes ago )
William Coors, former chair of Adolph Coors, dies at 102
William Coors, former chairman of Adolph Coors Co. and grandson of the brewing company's founder, has died at 102.
12:59AM ( 50 minutes ago )
Crawford stops Benavidez late in last round to keep WBO belt
Terence Crawford stopped Jose Benavidez with 18 seconds left in the 12th and final round to retain his WBO welterweight championship
12:54AM ( 55 minutes ago )