BUZZ-Real estate, Utilities slump as yields spike after hot CPI

Reuters04-10

** Rate-sensitive real estate investment trusts (REITs) and utility firms slump on Weds after hotter-than-expected inflation data sends benchmark yields higher

** U.S. Treasury 10-year yield jumps to 4.5%, highest since Nov, and two-year yields rise to around 4.9% after U.S. consumer prices increased more than expected in March

** Higher rates make dividend-paying stocks, also known as bond proxies, like REITs and utilities less attractive, and drive up borrowing costs

** S&P 500 real estate index recently down 4% to about 2-mth low and on course for largest one-day pct drop since June 2022

** Biggest SPLRCR pct losers on Weds include Extra Space Storage and Public Storage both off 6%, and telecom tower co SBA Communications and office REIT Boston Properties both down ~5%

** S&P Utilities sector last down 1.8% on the session

** Biggest drags on SPLRCU are Nextera Energy and Duke Energy both off ~2%

** SPLRCR is the only major S&P sector in the red YTD, now down 6%. SPLRCU is up 2% this year including move on Weds

** S&P 500 index losing 1% on Weds, trimming 2024 gain to ~8%

(Lance Tupper is a Reuters market analyst. The views expressed are his own)

((lance.tupper@thomsonreuters.com lance.tupper@tr.com 1-646-279-6380))

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