US: Stocks slump after earnings while yields rise
WALL Street stocks ended on Monday markedly lower, as Treasury yields picked up on concerns over the timing of interest rate cuts this year.
The Dow Jones Industrial Average fell 0.7 per cent to 38,380.12 while the broad-based S&P 500 retreated 0.3 per cent to 4,942.81.
The tech-heavy Nasdaq Composite Index crept down 0.2 per cent to 15,597.68.
The slide comes amid mixed reactions to earnings reports earlier in the day. Caterpillar shares closed 1.9 per cent up after the industrial giant reported a jump in fourth quarter earnings to wrap a strong 2023.
McDonald’s, which reported higher quarterly profits but slower comparable sales growth, saw its shares fall 3.7 per cent.
Meanwhile, the yields on two-year and 10-year Treasury notes surged amid interest rates concerns.
BT in your inbox
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
Treasury bond yields are seen as a proxy for US interest rates.
“It looks like the Fed is not going to cut as soon as the bond market had hoped for,” said Karl Haeling of LBBW, referring to the Federal Reserve.
In an interview that aired on Sunday, Fed Chair Jerome Powell reiterated the stance that it was unlikely a rate cut would come at the next central bank policy meeting in March.
“Powell really didn’t say anything new,” said Haeling.
“But after the job report on Friday, the headline numbers were so strong that it’s going to make it harder for the Fed to start cutting the rates,” he said, referring to hiring numbers published last week that significantly beat expectations.
Aviation giant Boeing lost 1.3 per cent as well, as it learned of new problems with the fuselage of its flagship 737 model. While this does not pose an immediate in-flight danger, it will likely slow deliveries. AFP
Share with us your feedback on BT's products and services
