Wall Street dropped sharply on Tuesday as concerns over marquee companies warning of higher costs were exacerbated by the benchmark U.S. 10-year Treasury yield piercing the 3-percent level for the first time in four years.
The 10-year yield, a benchmark for global borrowing costs, has been driven steadily higher by a combination of concerns over inflation, growing debt supply, and rising Federal Reserve borrowing costs. [US/]
"There are factors that are adding to inflation pressure like a tightening labour market, trade tension and rising commodity prices," said Bill Northey, senior vice president with U.S. Bank Wealth Management in Helena, Montana
"These higher Treasury yields are providing competition with riskier fixed income products and things like REITs and dividend-producing stocks."
At 13:54 p.m. ET, the Dow Jones Industrial Average <.dji> was down 523.11 points, or 2.14 percent, at 23,925.58, the S&P 500 <.spx> was down 41.90 points, or 1.57 percent, at 2,628.39 and the Nasdaq Composite <.ixic> was down 132.62 points, or 1.86 percent, at 6,995.98.
While industrial stocks hit the Dow, the Nasdaq was pulled down by a sharp drop in the `FAANG` group of technology stocks.
"Rising U.S. yields are hurting equities in general, when you combine with the weakness in FAANG stocks, it makes for a tough day in the market," Michael James, managing director of equity trading at Wedbush Securities in Los Angeles.
Other notable laggards included Lockheed Martin
Declining issues outnumbered advancers by a 2.23-to-1 ratio on the NYSE. Declining issues outnumbered advancers by a 2.06-to-1 ratio on the Nasdaq.
The S&P index recorded 13 new 52-week highs and 19 new lows, while the Nasdaq recorded 56 new highs and 72 new lows.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)