Wall Street hit by rising bond yields, sinking health stocks
U.S. stocks fell for a second straight day on Tuesday, with the Dow Jones Industrial Average tumbling as much as 352 points, hammered by a rise in bond yields and a decline in healthcare companies.
Shares of healthcare-related companies dropped after Amazon.com, Berkshire Hathaway and JPMorgan said they plan to form a venture aimed at lowering healthcare costs for their U.S. employees.
The S&P health sector tumbled 1.6 percent, the most among the 11 major sectors. Health insurer UnitedHealth fell 4.3 percent, the most among Dow components, while Cigna`s 6.4 percent drop was the biggest on the S&P 500.
U.S. Treasury long-dated yields rose in choppy trading ahead of a slew of events this week such as a Federal Reserve monetary policy decision which could help shed more light on the outlook for interest rates this year.
The Fed`s ongoing two-day meeting will be watched for comments that could raise the likelihood of rates being hiked four times this year, instead of three, especially as inflation readings have firmed in recent readings.
"Investors are getting a bit worried about inflation which has led some people to believe that the Fed might be more aggressive when it comes to raising rates," said Robert Pavlik, chief investment strategist at SlateStone Wealth.
At 11:00 a.m. ET (1600 GMT), the Dow was down 248.23 points, or 0.94 percent, at 26,191.25. The 352-point drop to its session low was the Dow`s steepest intraday point drop since May 17.
The S&P 500 was down 20.43 points, or 0.71 percent, at 2,833.10 and the Nasdaq Composite was down 42.70 points, or 0.57 percent, at 7,423.81.
The CBOE Volatility Index, the most widely followed gauge for investors` "fears", rose to as much as 14.69, its highest level since August.
"I think despite this selloff, all indications point to a firming economy and I do expect to see some bargain hunters step in soon," Pavlik said.
The energy index fell 1.54 percent as U.S. crude prices tumbled 2 percent on ongoing evidence of rising U.S. crude output.
Among earnings, Pfizer shares fell 3 percent. They had risen about 2 percent in premarket trading after the company`s quarterly results and full-year forecasts beat expectations.
Harley-Davidson dropped 7.7 percent after the motorcycle maker forecast a drop in shipments this year.
MetLife dropped 8.7 percent after saying the U.S. financial regulator is looking into the insurer`s failure to pay some workers` pensions.
Apple was down another 0.6 percent, still feeling the effects of news that the company will halve production of its $999 iPhone X smartphone.
Declining issues outnumbered advancers on the NYSE by 2,260 to 618. On the Nasdaq, 1,954 issues fell and 866 advanced.
The S&P 500 index showed 13 new 52-week highs and 4 new lows, while the Nasdaq recorded 26 new highs and 32 new lows.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)
Get Latest Business News, Stock Market Updates and Videos; Check your tax outgo through Income Tax Calculator and save money through our Personal Finance coverage. Check Business Breaking News Live on Zee Business Twitter and Facebook. Subscribe on YouTube.