Page 25 - ARUBA TODAY

BUSINESS Wednesday 16 May 2018
A25

Tech and health care lead US stocks lower; bond yields rise

By ALEX VEIGA,
AP Business Writer
Losses in technology and
health care companies
helped pull U.S. stocks low-
er Tuesday, snapping an
eight-day winning streak
by the Dow Jones industrial
average.
The broad sell-off followed
a slide in bond prices,
which sent the 10-year
Treasury yield to its high-
est level in almost seven
years. That paves the way
for higher borrowing costs
on mortgages and other
loans. The prospect of high-
er mortgage interest rates
weighed on homebuilders,
while the rise in bond yields
sent shares in high-dividend
paying stocks lower.
“We’re of the view that
we’re not in a high-rate en-
vironment, we’re in a less-
low rate environment,” said
Erik Davidson, chief invest-
ment officer at Wells Fargo
Private Bank. “So we’re not
too concerned at these
levels, but that’s definitely In this April 19, 2017, file photo, specialist Anthony Rinaldi is reflected in a screen at his post on the floor of the New York Stock
driving the market today.” Exchange.
The S&P 500 index fell 18.68 Associated Press
points, or 0.7 percent, to 0.6 percent. The retail sales homebuilders. Mortgage cents to close at $78.43 a from 109.66 yen late Mon-
2,711.45. The Dow lost 193 data suggest that consum- rates, which have been ris- barrel in London. day. The euro weakened
points, or 0.8 percent, to ers are spending more after ing this year, tend to track The dollar rose to 110.38 yen to $1.1847 from $1.1944.q
24,706.41. The drop pulled a weak first quarter. Bond the movement in the 10-
the 30-company average yields tend to rise when in- year Treasury yield. Higher
to a slight loss for the year. vestors expect faster eco- mortgage rates can make
The Nasdaq composite nomic growth and higher it harder for would-be buy-
dropped 59.69 points, or inflation. ers to afford to purchase a
0.8 percent, to 7,351.63. The Federal Reserve has home. D.R. Horton slid 6.7
The Russell 2000 index of signaled that it will raise percent to $40.58.
smaller-company stocks rates twice more this year, Some banks got a boost
finished flat at 1,600.34. after having done so ini- from the higher rates,
The market slide comes in tially in March, and most which make loans more
the midst of a strong May economists foresee the profitable. Capital One Fi-
for stocks. The Dow is on next increase in June. nancial rose 1.6 percent to
track for a gain of 2.2 per- Some Fed watchers have $94.65.
cent, while the S&P 500 is been cautioning that any Home Depot dropped 1.4
closing in on a gain of 2.4 lasting uptick in inflation or percent to $187.98 after
percent. The Nasdaq is up in economic growth might the home-improvement
4 percent. spur the Fed to pursue an retailer reported weak-
On Tuesday, it was the additional rate increase er-than-expected sales,
bond market that ap- before year’s end. partly because of inclem-
peared to hold investors’ “The stock market was due ent weather, and said the
focus. for a digestion of the gains second quarter got off to a
The yield on the 10-year that we’ve seen over the slow start.
Treasury rose to 3.07 per- last eight trading sessions,” Technology and health
cent from 3 percent late said Quincy Krosby, chief care sector companies
Monday. That’s the highest market strategist at Pruden- took some of the worst
level since July 2011 for the tial Financial. losses. Chipmaker Nvidia
yield, which is used to set The rise in bond yields fell 3.8 percent to $245.56.
interest rates on mortgages pulled down shares in real Drugmaker Celgene slid 3.9
and other kinds of loans. estate investment trusts percent to $81.98.
The surge came after the and other high-dividend Benchmark U.S. crude oil
Commerce Department paying stocks. Essex Prop- reversed an early side, ris-
said retail sales climbed 0.3 erty Trust fell 3.4 percent to ing 35 cents to settle at
percent in April. The agen- $233.78. $71.31 a barrel in New York.
cy also revised March sales It also put investors in the Brent crude, used to price
higher to 0.8 percent from mood to sell their shares in international oil, added 20