Wall St Slides As Rising Treasury Yields Snuff Out Stock Rally

Reuters2022-10-05

Oct 5 (Reuters) - U.S. stocks fell on Wednesday as a two-day rally in growth stocks was cut short by rising Treasury yields after data showed despite rising interest rates, the demand in labor market remained firm and the services industry slowed modestly.

After posting a loss in the previous quarter, the benchmark S&P 500 index has gained 4% so far this week as yields fell for two straight sessions on softer U.S. economic data, UK's tax turnaround and Australia's smaller-than-expected rate hike.

But the yields on the 10-year Treasury note rose again sharply as traders reassessed their positions based on how aggressively they expect the Federal Reserve will raise rates.

Adding to the boost, ADP data showed U.S. private employers stepped up hiring in September, indicating more room for the Federal Reserve to remain aggressive in its rate hike stance.

"It's a little bit more jobs being created or opened than the market was expecting and that leads to the belief that the Fed is not going to be pivoting in November," said Robert Pavlik, senior portfolio manager at Dakota Wealth in Fairfield, Connecticut.

The Institute for Supply Management's services industry employment gauge also shot up suggesting demand for labor remains strong, while the overall industry slowed modestly in September.

The private payrolls and ISM reports come ahead of a more comprehensive and closely watched employment report from the Labor Department for September on Friday.

Rate-sensitive technology and related stocks like Nvidia Corp, Amazon.com, Apple Inc and Alphabet Inc fell between 1.8% and 4%.

"The market has yet to complete a capitulation," said Peter Cardillo, chief market economist at Spartan Capital Securities LLC

"The past couple of days was just basically a rally in the bear market and the market needs desperately to capitulate before we can see stabilization."

At 10:32 a.m. ET, the Dow Jones Industrial Average was down 407.54 points, or 1.34%, at 29,908.78, the S&P 500 was down 65.84 points, or 1.74%, at 3,725.09, and the Nasdaq Composite(.IXIC)was down 258.08 points, or 2.31%, at 10,918.32.

Banks such as Citigroup and JPMorgan Chase & Co slipped more than 2% each.

Ten of the 11 major S&P 500 sectors declined in early trading with utilities and real estate stocks leading losses.

Energy was the sole gainer, up 0.3% after OPEC+ agreed its deepest cuts to oil production since the 2020 COVID pandemic.

Twitter Inc lost momentum in line with its peers, a day after surging 22% after billionaire Elon Musk decided to proceed with his original $44-billion bid to take the social media company private.

Tesla Inc, the electric car maker headed by Musk, slid 5%.

Declining issues outnumbered advancers for a 7.56-to-1 ratio on the NYSE and a 4.14-to-1 ratio on the Nasdaq.

The S&P index recorded one new 52-week high and nine new lows, while the Nasdaq recorded 26 new highs and 63 new lows.

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Comments

  • Seaside
    2022-10-06
    Seaside
    Koo
  • 来人
    2022-10-06
    来人
    Ok
  • chooi
    2022-10-06
    chooi
    Tx
  • robot1234
    2022-10-06
    robot1234
    US national debt now tops $31 trillion for the first time ever. The gross national debt in America has hit new heights, surpassing $31 trillion, according to a U.S. treasury report released this week. If you find that hard to wrap your head around, it basically boils down to more than $93,000 of debt for every person in the country, according to the Peter G. Peterson Foundation. And with the dramatic rise in interest rates over the past few months — the Fed funds rate is currently between 3% and 3.35% — the national debt will be growing at a rate that makes it even harder to ignore. A deficit is what happens when the government spends more money than it brings in through taxes — and the last couple of years have been expensive. Several large bills with hefty price tags have been appro
  • FreePrincess
    2022-10-06
    FreePrincess
    Pls like 
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