U.S. Stocks Come Under Pressure Amid Surging Treasury Yields

After showing a lack of direction early in the session, stocks have moved notably lower over the course of the trading day on Wednesday. The major averages have slid more firmly into negative territory, giving back ground after moving sharply higher over the two previous sessions.

The major averages have climbed off their lows of the session in recent trading but continue to post steep losses. The Dow is down 241.97 points or 0.8 percent at 30,281.83, the Nasdaq is down 151.09 points or 1.4 percent at 10,621.31 and the S&P 500 is down 45.44 points or 1.2 percent at 3,674.54.

Profit taking has contributed to the pullback on Wall Street, as traders cash in on the strong gains seen to start the week.

The major averages ended Tuesday’s trading well off their highs of the session, although the Dow still ended the day at its best closing level in almost a month.

Lingering concerns about higher interest rates and the impact on the global economy also continue to weigh on the markets along with a jump in treasury yields.

The yield on the benchmark ten-year note has moved sharply higher following a modest pullback on Tuesday, reaching its highest levels in fourteen years.

The weakness on Wall Street comes despite a notable advance by shares of Netflix (NFLX), with the streaming giant surging by 13.5 percent.

The spike by Netflix comes after the company reported third quarter earnings and revenue that beat analyst estimates on strong subscriber growth.

Dow components Procter & Gamble (PG) and Travelers (TRV) have also moved to the upside after reporting better than expected quarterly results.

Sector News

Housing stocks have moved sharply lower over the course of the session, dragging the Philadelphia Housing Sector Index down by 5.0 percent.

The sell-off by housing stocks comes after the Commerce Department released a report showing housing starts tumbled by more than expected in the month of September.

Substantial weakness has also emerged among banking stocks, as reflected by the 3.8 percent nosedive by the KBW Bank Index.

Biotechnology stocks have also shown a significant move to the downside on the day, resulting in a 3.7 percent plunge by the NYSE Arca Biotechnology Index.

Gold, commercial real estate and transportation stocks are also seeing considerable weakness, while energy stocks are among the few groups bucking the downtrend amid an increase by the price of crude oil.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Wednesday. Japan’s Nikkei 225 Index rose by 0.4 percent, while China’s Shanghai Composite Index slumped by 1.2 percent.

Meanwhile, European stocks showed a lack of direction over the course of the session before closing modestly lower. While the French CAC 40 Index fell by 0.4 percent, the U.K.’s FTSE 100 Index and the German DAX Index both edged down by 0.2 percent.

In the bond market, treasuries have pulled back sharply after ending the previous session modestly higher. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 11.3 basis points at 4.111 percent.

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