rain
Saturday December 15th, 2018 4:04PM

Dow Jones industrials sink 500 points as bond yields rise

By The Associated Press
Related Articles
  Contact Editor

NEW YORK (AP) — Stocks are extending their slump on Wall Street Wednesday, led by drops in big technology companies, as rising bond yields draw investors out of stocks.

The Dow Jones Industrial Average fell as much as 519 points in afternoon trading.

Technology stocks, the biggest winners in the market over the past year, took some of the worst losses. Chipmaker Nvidia dropped 5 percent.

The S&P 500 is on track for its fifth drop in a row and its biggest decline since April.

The yield on the 10-year Treasury rose to 3.23 percent, the highest level in seven years. The rise in rates is weighing particularly heavily on areas of the market that had earlier been the biggest winners.

KEEPING SCORE: The S&P 500 index fell 54 points, or 1.9 percent, to 2,826 as of 2:24 p.m. Eastern time. The benchmark U.S. stock index hasn't suffered a five-day losing streak since November 2016, just before the presidential election.

The technology-heavy Nasdaq composite dropped 176 points, or 2.3 percent, to 7,562. It's fallen 5.8 percent over the last five days.

The Dow Jones Industrial Average gave up 500 points, or 1.9 percent to 25,926. The Russell 2000 index of smaller-company stocks lost 25 points, or 1.6 percent, to 1,596.

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.

In technology, Microsoft dropped 3.1 percent to $108.76 Wednesday and Nvidia lost 4.7 percent to $253.13. In retail, Amazon sank 3.6 percent to $1,803 and Nike gave up 4.4 percent to $76.87.

DOWN DAY: Boeing shed 3.3 percent to $372.58 and 3M fell 2.2 percent to $205.77. Insurance companies slumped as Hurricane Michael hit the Florida Panhandle. Berkshire Hathaway fell 3.8 percent to $215.20. Among internet companies, Alphabet, Google's parent company, slid 2.3 percent to $1,118.79.

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 3.23 percent from 3.20 percent late Tuesday after earlier touching 3.24 percent. It was at just 3.05 percent early last week.

THE QUOTE: Gina Martin Adams, the chief equity strategist for Bloomberg Intelligence, said investors fear that company profit margins will be squeezed by rising costs, including the price of oil. Paint and coatings maker PPG gave a weak third-quarter forecast Monday, while earlier, Pepsi and Conagra's quarterly reports reflected increased expenses.

"Both companies highlighted rising costs, not only input costs but increasing operating expenses (and) marketing expenses," she said.

Adams said those worries are affecting technology and consumer-focused companies as well even though companies like Alphabet, Amazon and Facebook have long had very high profit margins. That's helped make technology stocks more volatile in the last few months.

"As stocks go up, tech goes up more than the stock market. As stocks go down, tech goes down more than the stock market."

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 34 percent to 39 cents. 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.

DEALS: The Justice Department approved CVS' purchase of health insurer Aetna. Aetna intends to sell its Medicare Part D prescription drug benefit unit to complete the $69 billion acquisition.

CVS rose 0.9 percent to $80.20 and Aetna added 1.3 percent to $206.37.

Defense and aerospace parts supplier Esterline Technologies rallied after it agreed to be bought by TransDigm for $122.50 per share in cash, or $3.61 billion. Esterline climbed 29.6 percent to $115.04 while TransDigm slipped 2 percent to $344.03.

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 2.1 percent, Germany's DAX lost 2.2 percent and the FTSE 100 in London fell 1.3 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 2.3 percent and the Merval in Argentina sank 2.8 percent.

COMMODITIES: Benchmark U.S. crude oil fell 2.2 percent to $73.30 a barrel in New York. Brent crude, the international standard, lost 1.8 percent to $83.50 a barrel in London.

CURRENCIES: The dollar fell to 112.67 Japanese yen from 113.05 yen late Tuesday. The euro rose to $1.1538 from $1.1496. The British pound rose to $1.3209 from $1.3146.

____

AP Markets Writer Marley Jay can be reached at http://twitter.com/MarleyJayAP His work can be found at https://apnews.com/search/marley%20jay

  • Associated Categories: Associated Press (AP), AP Business, AP Business - Economy, AP Business - Financial Markets, AP Business - Industries, AP Business - Utilities
© Copyright 2018 AccessWDUN.com
All rights reserved. This material may not be published, broadcast, rewritten, or redistributed without permission.
Dow Jones industrials sink 500 points as bond yields rise
U.S. stocks are on track for their biggest loss since April as technology companies plunge and interest rates resumed their climb
2:31PM ( 9 minutes ago )
Markets Right Now: Dow sinks 500 as bond yields rise
Stocks are extending their slump on Wall Street, led by drops in big technology companies, as rising bond yields draw investors out of stocks.
2:20PM ( 20 minutes ago )
Trump 'demanding' answers from Saudis about missing writer
President Donald Trump says the U.S. is demanding answers from Saudi Arabia about the disappearance of a well-known Saudi writer and government critic Turkish authorities say was slain inside his country's diplomatic missing in Istanbul
2:15PM ( 24 minutes ago )
Associated Press (AP)
Stocks tumble as technology downturn gets worse
U.S. stocks are on track for their biggest loss since April as technology companies plunge and interest rates resumed their climb
1:32PM ( 1 hour ago )
The Latest: Trump: Lifting sanctions needs 'our approval'
President Donald Trump says a South Korean proposal to lift some unilateral sanctions on the North will only take place with his say-so
1:30PM ( 1 hour ago )
After backlash, Amazon to boost pay for longtime workers
Amazon, facing a backlash from longtime warehouse workers who say its $15 hourly minimum wage wouldn't benefit them, will now provide a bigger raise
1:29PM ( 1 hour ago )
AP Business
US stocks sell off as rates resume their climb
U.S. stock indexes dropped sharply, and the S&P 500 was on pace for its worst day since June, as interest rates resumed their climb.
11:37AM ( 3 hours ago )
South Korea considers lifting some sanctions on North Korea
South Korea's foreign minister says Seoul is considering lifting some of its unilateral sanctions against North Korea to create more momentum for diplomacy aimed at improving relations and defusing the nuclear crisis.
11:28AM ( 3 hours ago )
European officials seek tougher emissions rules for cars
European Union officials are working on tougher auto emissions standards aimed at fighting global warming _ but which the industry cautions could hurt workers and consumers
11:22AM ( 3 hours ago )
AP Business - Economy
Asian shares mixed in muted trading amid growth worries
Asian shares are mixed in muted trading amid continuing worries about trade tensions and slowing global economic growth
11:01PM ( 15 hours ago )
US stock indexes mixed as interest rates take a pause
U.S. stock indexes ended Tuesday nearly where they began, as interest rates let off the accelerator following their sharp rise last week
4:51PM ( 21 hours ago )
US stock indexes waffle as Treasury yields inch lower
Stock indexes turned higher in midday trading on Wall Street Tuesday as technology companies and other sectors recovered some of the sharp losses caused by last week's rapid rise in interest rates.
3:00PM ( 23 hours ago )
AP Business - Financial Markets
DOJ approves $69B CVS Health-Aetna merger, with conditions
The $69 billion CVS Health-Aetna deal gets the greenlight from Department of Justice
11:15AM ( 3 hours ago )
Bosnia oil refinery blast kills 1, injures 10
Explosion at a Russian-owned oil refinery in northern Bosnia has killed one worker and injured ten
7:40AM ( 6 hours ago )
In boon for farmers, Trump lifts restrictions on ethanol
Trump lifts summertime restrictions on higher blends of ethanol in gasoline to benefit farm states
9:19PM ( 17 hours ago )
AP Business - Industries
Dutch appeals court upholds landmark climate case ruling
A Dutch court has upheld a landmark ruling that ordered Dutch authorities to cut the country's greenhouse gas emissions by at least 25 percent by 2020 from benchmark 1990 levels
10:22AM ( 1 day ago )
Carbon tax gets renewed attention but still faces resistance
Carbon taxes have gotten renewed attention thanks to an alarming new report on climate change and a Nobel Prize victory by two American economists, but neither is likely to break down political resistance
1:48AM ( 1 day ago )
In boon for farmers, Trump lifting restrictions on ethanol
Trump plan to lift summertime restrictions on higher blends of ethanol in gasoline to benefit farm states
12:20AM ( 1 day ago )
AP Business - Utilities
Markets Right Now: Dow sinks 500 as bond yields rise
Stocks are extending their slump on Wall Street, led by drops in big technology companies, as rising bond yields draw investors out of stocks.
2:20PM ( 20 minutes ago )
Trump 'demanding' answers from Saudis about missing writer
President Donald Trump says the U.S. is demanding answers from Saudi Arabia about the disappearance of a well-known Saudi writer and government critic Turkish authorities say was slain inside his country's diplomatic missing in Istanbul
2:15PM ( 25 minutes ago )
EU says Brexit deal 'within reach' but work remains
The European Union's Brexit negotiator says an agreement on Britain's departure "is within reach" if negotiations make progress ahead of a summit next week.
2:13PM ( 26 minutes ago )
The Latest: Limo company operator charged with homicide
Police say they have charged a limo service operator with criminally negligent homicide after a crash that killed 20 people in upstate New York.
2:11PM ( 29 minutes ago )
Congress approves massive water-projects bill
Congress has approved a sprawling bill to improve the nation's ports, dams and harbors, protect against floods, restore shorelines and support other water-related projects
2:08PM ( 32 minutes ago )