por admin » Mié Oct 10, 2018 9:09 am
Dow drops more than 250 points as Amazon, tech shares fall
Fred Imbert | Alexandra Gibbs
Published 5 Hours Ago Updated 1 Min Ago
CNBC.com
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Federal Reserve Chairman Jerome Powell appears on a television on the floor of the New York Stock Exchange.
Stocks fell on Wednesday as a sharp rise in interest rates has pushed investors to the sidelines.
The Dow Jones Industrial Average traded 200 points lower as Intel and Nike lagged. The Nasdaq Composite pulled back 1.7 percent.
The S&P 500 dropped 0.9 percent, with the tech and industrials sectors underperforming. The broad index was also headed for a five-day losing streak and fell below its 50-day moving average, a widely followed technical level.
The 10-year Treasury note yield traded around 3.23 percent a day after hitting its highest level since 2011. The two-year yield, meanwhile, reached its highest mark since 2008.
Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., on Monday, April 16, 2018.
Michael Nagle | Bloomberg | Getty Images
Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., on Monday, April 16, 2018.
"Portfolio managers tend to move to the sidelines in a skittish tape out of fear of suffering from a quick and sharp pullback," said Jeremy Klein, chief market strategist at FBN Securities.
"The fundamental environment, though, remains supportive of share appreciation. I contend that the concerns of rising interest rates are largely overblown. Specifically, I do not anticipate much more of an increase in longer dated Treasury yields," he said.
Bank shares traded higher as yields rose. Citigroup and Bank of America gained 0.4 percent and 0.3 percent, respectively. Wells Fargo also rose about half a percent.
Rates rose on Wednesday after the U.S. government released data showing a rebound in producer prices last month. The producer price index rose 0.2 percent in September and is up 2.8 percent on a year-over-year basis. The index is a widely followed metric of inflation.
The recent rise in rates comes ahead of the start of the latest earnings season. Banks like Citigroup and Wells Fargo are scheduled to report later this week. Overall, analysts polled by FactSet expect third-quarter earnings to have risen by 19 percent on a year-over-year basis.
Stocks also fell as their European counterparts dropped on worries over Italy's budget. The Stoxx 600 index fell more than half a percent, while the German Dax dropped 0.8 percent. France's CAC 40, meanwhile, pulled back more than 1 percent.