Wall St pulls back from earlier gains as bond yields rise

05 February, 2018, 03:04 | Author: Darnell Patrick
  • Not high enough

Adding to the pressure were disappointing earnings reports from major companies. The benchmark S&P 500 stock index is on track for its first weekly decline in five. Based on the relationship between federal funds futures and the 5-year TIPS yield, an additional half-percentage point of Fed tightening should raise the TIPS yield by about 30 basis points (or 3/10 of a percentage point).

Oil rose after a survey showed the Organization of the Petroleum Exporting Countries' commitment to its supply cuts remains in place, even as USA production topped 10 million barrels per day for the first time since 1970.

Equity traders around the world have been firing on all cylinders in recent months, sending markets to record or multi-year highs, on confidence in the global economy, healthy earnings and optimism over Donald Trump's tax cuts. On Wednesday, it touched its strongest in more than four months at $1.2250.

Disappointing results from some of the largest US companies also weighed on stocks.

Wall Street gave up earlier gains on Thursday as bond yields rose and technology stocks retreated ahead of a host of high-profile earnings.

The dollar, which fell 3.25 percent in January to mark its weakest monthly performance since March 2016, pared gains against the yen as stocks fell in Europe and treaded water on Wall Street. Equity markets are torn between buoyant economic growth and double-digit company earnings, on the one hand, and the possibility that USA and euro zone central banks will tighten policy faster than expected, which is pushing up bond yields.

All this sets the stage for the Federal Reserve to continue raising interest rates, with the next hike expected in March.

Bond market strategists had expected a more gradual rise in bond yields, which move opposite price.


Initial claims for unemployment benefits came in below expectations, indicating a tight labour market. Also this week, the Fed said it now sees inflation reaching its 2 percent target this year.

At 9.37am ET (1437 GMT), the Dow Jones Industrial Average was down 91.9 points, or 0.35 per cent, at 26,057.49, the S&P 500 was down 2.26 points, or 0.08 per cent, at 2,821.55.

Six of the 11 major S&P indexes were higher, with the telecommunications index's 2.02 per cent rise leading the advancers.

Other notable stock movers included eBay, up 13.8 per cent after its earnings report, and its announcement that it would move away from PayPal as its main payments partner.

UPS (UPS.N) was down 6.1 percent after it reported fourth-quarter profit that was hurt by higher holiday season shipping costs. Doll said his target for fair value on the S&P 500 is 2,800 for year end.

"The selloff is just letting steam out of the kettle", said Stephen Massocca, managing director at Wedbush Securities in San Francisco. Industry heavyweights Apple, Alphabet and Amazon are due to report results after the bell.

Amazon.com (AMZN.O) was up over 6.0 percent in after hours trading after results.

Recommended:

  • John Stamos, Caitlin McHugh robbed hours before wedding

    John Stamos, Caitlin McHugh robbed hours before wedding

    After the ceremony, the couple's closest family and friends attended a private celebration at his Beverly Hills home. Stamos stars in Netflix's " Fuller House " and spent part of a year ago with The Beach Boys as a drummer.
    Shopian Army firing: Third civilian succumbs to bullet wounds

    Shopian Army firing: Third civilian succumbs to bullet wounds

    A Junior Commissioned Officer (JCO) accompanying the convoy was hit on his head and fell unconscious suffering serious injury. Kashmir Reader contacted SSP Shopian, Sri Ram Dinkar, who acknowledged that army has filed their version of the incident.
  • United Parcel Service, Inc. (UPS) held by 188 SEC 13F Filers

    United Parcel Service, Inc. (UPS) held by 188 SEC 13F Filers

    Bank Of Italy decreased its stake in Cnh Indl N V (CNHI) by 5.14% based on its latest 2017Q3 regulatory filing with the SEC. It dropped, as 74 investors sold CSCO shares while 637 reduced holdings. 60 funds opened positions while 146 raised stakes.
    UN Calls for Action Against Sexual Violence in War Zones

    UN Calls for Action Against Sexual Violence in War Zones

    Jolie has spent much of time in the public working to bring key human rights issues to the forefront of the global political dialogue.

    Prince William and Kate are just like us: They shop at Ikea!

    The Duke and Duchess of Cambridge are already known for their mental health activism , but that's not where their goodwill ends. Prince William and Kate Middleton slapped around some balls on the ice this week - but don't call what they're doing hockey.
  • Migrants clash in Calais leaving four teenagers in critical condition

    Migrants clash in Calais leaving four teenagers in critical condition

    By 9pm, police said that a total of 13 migrants were seriously wounded, as other victims were found by police around the town. Authorities said French police intervened to protect the Afghans.
    Justin Timberlake will be part of the Super Sunday spectacle

    Justin Timberlake will be part of the Super Sunday spectacle

    Timberlake's press conference also covered his plans for his forthcoming halftime performance, which will be his third. As the halftime entertainer, it's understandable that Timberlake would avoid picking a side in the Super Bowl .
    Google Home can now wake you up with musical alarms

    Google Home can now wake you up with musical alarms

    The first step is to link your Netflix account in the Google Home app or via the Google Assistant on your phone. Luckily, the Google Assistant can help you wake up more peacefully.
  • Father Lunges at Larry Nassar During Eaton County Sentencing Hearing

    Father Lunges at Larry Nassar During Eaton County Sentencing Hearing

    Victims were taken to be treated by him at Michigan State University, where he worked as a sports doctor between 1997 and 2016. When the judge would not grant his request, Randall rushed toward the defendant's table and attempted to attack Dr.

    Samsung hints at foldable smartphone with OLED display in earnings report

    Both the devices will be powered by Snapdragon 845 SoC for the US and Chinse market while rest of the world will get Exynos 9810 . While the iPhone X captured the attention of the over the holiday season, the Galaxy Note 8 still managed to sell very well.
    'I am a good guy who made a bad decision'

    'I am a good guy who made a bad decision'

    Google Preferred dropped Paul from their service after he came under fire for the December 31 post - and the vlogger told Strahan that the situation impacts his bottom line.


Popular

2 dead, 50 injured in Amtrak train crash
A CSX spokesman confirmed the incident and said additional information would be made available as details are confirmed. The National Transportation Safety Board said on Twitter that a team of investigators are en route to the crash site.

Fort Valley State University celebrates Black History Month
Saturday, 1 p.m.: Opening celebration at Museum London with cultural groups showcasing their roots, art, crafts and services. An event Thursday night was a panel discussion about the origins of Black History Month.

Google says it took down over 700000 bad Android apps in 2017
But such is the life of a tech company servicing billions of Android users, and Google continues to refine its process. Google introduced Files Go in December 2017 and is claimed to have been installed over 10 million times.

Blake Griffin reflects on time with Clippers, thanks fans for support
LeBron gets to reset with a new star and the Cavs have him locked down for five years if LeBron wants to walk after this season. Not only does the deal clear cap space, the Clippers potentially acquired a lottery pick in a deep 2018 draft.

Turkey Detains Medical Association Members over Syria Offensive Criticism
The 28-year-old Kurdish-German midfielder is a prominent supporter of Turkey's Kurdish minority. "No to war, peace right now". The initial focus on the Turkish assault has been in the Afrin border region.

Klopp asked whether he will replace Coutinho in January transfer window
Yes, it's right that we didn't play well at Swansea , but a few days before we played fantastic against Man City". Liverpool lost a key attacking player in Coutinho, after he joined Barcelona for €160 million.

Leo Varadkar to back liberalizing Irish abortion laws
Varadkar's own party is split over what is arguably the most contentious issue in Irish politics. The public will not vote on the specifics of how the law will change.

Gas prices still climbing in northern New England
Gasoline prices in Houston and elsewhere have reached some of the highest levels since Hurricane Harvey. Analysts say the rising pump prices in recent weeks are mostly due to increasing US crude oil prices.

EU Agrees On Negotiating Position For Post-Brexit Transition Period
The UK has always argued the Irish border issue is impossible to solve before trade talks, which have yet to start. The council is a gathering of all the relevant government ministers from the EU's countries.

Olivier Giroud to Chelsea: Transfer from Arsenal backed by former star
If it doesn't happen, then we are strong enough to focus on the players we have and focus on the job with the players we have. He did not rule out an exit for the 31-year-old, but insisted nobody will be allowed leave the club if nobody is signed.