You are here

US: Stocks fall as bond yields spike, retailers drop

40270948 - 22_10_2016 - US STOCKS.jpg

[NEW YORK] Wall Street stocks finished lower on Thursday amid concerns about surging bond yields and retailers retreating after a trade group said the US presidential campaign is crimping shopping.

The yield on the 10-year US Treasury jumped nearly 3.0 per cent to the highest level since June on expectations the Federal Reserve will increase interest rates in December.

"Markets are struggling, not because of earnings but because of the hike in yields," said Peter Cardillo of First Standard Financial. "That's weighing on stocks."

Meanwhile, shares of Best Buy, Macy's and Gap all fell more than one percent after nearly half of consumers surveyed by the National Retail Federation said they were more cautious on spending due to the uncertainty ahead of the November 8 US election.

The Dow Jones Industrial Average closed down 0.2 per cent to 18,169.68.

The broad-based S&P 500 lost 0.3 per cent at 2,133.04, while the tech-rich Nasdaq Composite Index shed 0.7 per cent to 5,215.97.

Apple fell 1.0 per cent as it launched a new generation of laptops that include touch control features that people have embraced on smartphones. Some analysts said the new models, while impressive, no longer have the hardware advantage over competing computers that they used to have.

NXP Semiconductors of Holland gained 0.4 per cent on news of its US$47 billion takeover by Qualcomm, which advanced 2.8 per cent.

Twitter climbed 0.6 per cent after reporting higher third-quarter diluted earnings than expected and announcing plans to cut 9 per cent of its staff.

Tesla Motors won 0.9 per cent after it announced a surprise third quarter profit of US$22 million as it touted new product launches and store openings.

Ford dropped 1.2 per cent as third-quarter net profit plunged from US$2.2 billion to US$957 million due in part to heavy costs to recall 2.4 million cars.

Other gainers after earnings included Bristol-Myers Squibb and Western Digital, both of which advanced 5.4 per cent, Celgene, which added 6.7 per cent and Alexion Pharmaceuticals, which gained 8.0 per cent.