US: Stocks fall as Treasury yields jump

WALL Street stocks fell on Wednesday while Treasury bond yields surged to multi-year highs as analysts warned that Federal Reserve meeting minutes were more hawkish than expected.

The yield on the 10-year US Treasury note rose further above four percent, hitting a 15-year high, according to the Wall Street Journal.

Treasury yields, which are a proxy for interest rates, climbed on Fed minutes in which policy makers pointed to significant risks that price increases would persist.

“There seems to be a pretty good coalition of folks who think we need to raise again this year,” said Art Hogan of B. Riley Financial.

The Dow Jones Industrial Average finished down 0.5 per cent at 34,765.74.

The broad-based S&P 500 shed 0.8 per cent to 4,404.33, while the tech-rich Nasdaq Composite Index dropped 1.2 per cent to 13,474.63.

Hogan also pointed to other factors behind Wednesday’s weakness, including disappointing China data and seasonal selling patterns in August.

Among individual companies, Intel dropped 3.6 per cent as it abandoned a US$5.4 billion deal to buy Tower Semiconductor in Israel after failing to get needed regulatory approval.

Tower Semiconductor sank 10.7 per cent.

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Target shares climbed 2.9 per cent following a mixed earnings report, in which the retailer announced better-than-expected quarterly results but trimmed back its full-year profit forecast on lower sales.

The big-box chain described its inventory position as much improved compared with last year when it had a glut of unwanted merchandise. AFP