tiptrot.com July 16, 2018

Markets Right Now: Big tech, industrials lead stocks lower

25 April 2018, 09:02 | Cedric Leonard

U.S. stock index futures ticked lower ahead of Monday’s open as investors awaited a new cluster of corporate

US stocks set to open little changed as 10-year yield approaches 3

The decline in share prices followed the rise in the yield on 10-year U.S. Treasury notes to the psychologically significant 3% level.

The broad-based S&P 500 fell 1.5 per cent to 2,631.17, while the tech-rich Nasdaq Composite Index slid 1.7 per cent to 7,007.50.

The Dow Jones industrial average slipped more than 2 percent - 550 points - at its low in trading Tuesday as a key USA government bond yield hit 3 percent for the first time in more than four years and in reaction to a seemingly innocuous comment from a Caterpillar executive. The Nasdaq gave up 121 points, or 1.7 percent, to 7,007.

The index fell a total of 424.56 points or 1.74 percent by closing to 24,024.13, dropping a total of 751.21 points from its session high following a 131-point increase to open trading. Other big technology companies also fell, as Facebook dropped 3.7 percent to $159.69 and Microsoft skidded 2.3 percent to $93.12. The Dow dropped 1.7%, marking fifth loss in a row and worst one-day drop since April 6.

The 3 percent rate level sends a number of crosscurrents through the financial markets, both positive and negative.

Google parent Alphabet also reported surging earnings, but its stock fell 2.2 percent as the company said spending rose sharply. Facebook's first-quarter revenue is expected to come in at $11.4 billion - a 43 percent spike from the year-ago quarter. Right now, the difference between them is about half of a percentage point.

BONDS: Bond prices were little changed after an early dip. "The 10-year yield was at 3 percent in 2014, and that's not ancient history".

The yield on the 10-year note is a benchmark for many kinds of interest rates including mortgages, and it's been climbing because investors expect greater economic growth and faster inflation. The 10-year yield has been ticking higher because of concerns about inflation and the Federal Reserve raising interest rates.

Drugmaker Shire rose 3.3 percent after saying it had received another takeover offer from Japanese rival Takeda.

Shire has rallied in the wake of Takeda's earlier offers, which Shire said weren't good enough. Its consumer confidence index is near 18-year highs. In the technology industry, electronics manufacturer Sanmina-ICU jumped 18.1 percent to $32.70. The euro rose to $1.2237 from $1.2205.

US crude oil futures settled 1.4 per cent lower at $67.70 a barrel as concerns faded over the possibility that the United States might reinstate sanctions against Iran.

OVERSEAS: Germany's DAX lost 0.2 percent while the French CAC 40 added 0.1 percent. Japan's benchmark Nikkei 225 rose 0.9 percent, helped by the weaker yen. South Korea's Kospi lost 0.7 percent at 2,445.90.

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