Nasdaq, S&P 500 fall, pressured by rising US Treasury yields

Nasdaq, S&P 500 fall, pressured by rising US Treasury yields

The S&P 500 and Nasdaq indexes came under pressure on Monday as climbing Treasury yields and prospects of rising inflation triggered valuation concerns, hitting shares of high-flying growth companies.

FILE PHOTO: A Wall Street sign is pictured outside the New York Stock Exchange, in New York City, U
FILE PHOTO: A Wall Street sign outside the New York Stock Exchange in New York City, New York, U.S., October 2, 2020. REUTERS/Carlo Allegri/File Photo

NEW YORK: The S&P 500 and Nasdaq fell on Monday as climbing Treasury yields and prospects of rising inflation triggered valuation concerns, hitting shares of high-flying growth companies.

The Dow index, on the other hand, was higher, boosted by a 5per cent gain in Walt Disney Co.

U.S. benchmark 10-year Treasury yields were up at 1.36per cent on Monday. Since the beginning of February, 10-year yields have risen about 26 basis points, on track for their largest monthly gain in three years.

"Investors are a little nervous about Treasury yields rising so quickly and it has been a pretty quick move in a short period of time," said Lindsey Bell, chief investment strategist at Ally Invest, in Charlotte, North Carolina."What investors are grappling with ... is what does this mean from an inflation perspective. Because of that, there's a little bit of tantrum in the market right now," she added.

Federal Reserve Chair Jerome Powell is scheduled to speak before the Senate Banking Committee on Tuesday, and investors are expected to look for any potential changes to the central bank's dovish outlook in recent months.

Shares of Apple Inc, Microsoft Corp, Alphabet Inc, Tesla Inc and Amazon.com Inc resumed their slide from the previous week, falling between 0.9per cent and 5per cent.

Largely upbeat fourth-quarter earnings had powered Wall Street's main indexes to record highs earlier last week, but the rally lost steam, in part due to fears of a potential snag in U.S. vaccination efforts and inflation concerns emanating from a raft of stimulus measures.

In afternoon trading, the Dow Jones Industrial Average rose 137.26 points, or 0.44per cent, to 31,631.58, the S&P 500 lost 8.3 points, or 0.21per cent, to 3,898.41 and the Nasdaq Composite dropped 195.70 points, or 1.41per cent, to 13,678.76.

The S&P 500 was on track for a five-day losing streak, its worst in one year.

Value stocks have outperformed growth shares in February, with investors betting on a rebound in industrial activity and a pickup in consumer demand as countries roll out vaccines to tame the pandemic.

The S&P 500 industrials and financial sector rose 0.8per cent and 1.1per cent, respectively, while energy stocks surged 4.5per cent on higher oil prices. [O/R

Discovery Inc jumped 9.5per cent after the media company said it was expecting 12 million global paid streaming subscribers by the end of February, as coronavirus-led restrictions kept people at home.

Kohl's Corp gained 7.9per cent after a group of activist investors nominated nine directors to the department store chain's board.

Principal Financial Group Inc added 8.8per cent after a media report that activist investor Elliott Management Corp had taken a stake in the life insurance company and planned to push for changes.

Advancing issues outnumbered declining ones on the NYSE by a 1.14-to-1 ratio; on Nasdaq, a 1.17-to-1 ratio favored decliners.

The S&P 500 posted 71 new 52-week highs and no new lows; the Nasdaq Composite recorded 252 new highs and 10 new lows.

(Reporting by Gertrude Chavez-Dreyfuss in New York; Additional reporting by Devik Jain and Shreyashi Sanyal in Bengaluru; Editing by Matthew Lewis)

Source: Reuters

Bookmark