May 23, 2018

Markets Right Now: Tech leads stocks lower; bond yields rise

16 May 2018, 11:03 | Melvin Schneider

S&P 500; US Indexes Fundamental Daily Forecast – Investors Banking on Favorable US – China Trade Deal

Dow Jones recorded the eighth consecutive winning session

Among the worst performers on the S&P 500, Agilent Technologies (A) shares dropped almost 10% after the maker of medical instruments and other equipment posted quarterly earnings that matched forecasts late Monday.

Bond prices fell, sending yields higher, after the government reported a solid increase in USA retail sales last month.

The S&P 500 posted 10 new 52-week highs and seven new lows; the Nasdaq Composite recorded 82 new highs and 51 new lows. US shares were set to drift slightly lower, with Dow futures down 0.4 percent and S&P 500 futures 0.3 percent lower.

The Dow Jones Industrial Average declined 193 points, or 0.78%, to 24,706, ending its eight-session winning streak.

The broad sell-off followed a slump in bond prices, which sent the 10-year Treasury yield to its highest level in nearly seven years. That paves the way for higher borrowing costs on mortgages and other loans.

The S&P 500 fell 0.7 percent, to 2,711.45. "A creeping up of these things continues to keep the market nervous". The Shanghai Composite climbed 0.6 percent to 3,192.12. The agency also revised March sales higher to 0.8 percent from 0.6 percent. Mortgage rates, which have been rising this year, tend to track the 10-year Treasury yield.

In economic data, USA retail sales climbed in April for a second consecutive month, underscoring a healthy domestic economy.

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US market indexes were lower on Tuesday.

The Federal Reserve has signaled that it will raise rates twice more this year, after having done so initially in March, and most economists foresee the next increase in June.

"Yields on treasuries with shorter maturities are at their highest closing and intraday points in about a decade, continuing the basis point increases that began in September 2017 and have sustained so far this year", Tradeweb noted. Capital One Financial stock rose 1.6 percent.

Declining issues outnumbered advancing ones on the NYSE by a 1.87-to-1 ratio; on Nasdaq, a 1.14-to-1 ratio favored decliners.

ENERGY: Benchmark U.S. crude oil gained 59 cents to $71.55 a barrel in electronic trading on the New York Mercantile Exchange. Brent crude, used to price worldwide oil, added 20 cents to close at $78.43 a barrel in London.

CURRENCIES: The dollar rose to 109.97 yen from 109.53 yen late Monday.

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