US markets drop sharply as investors are spooked by rising rates
Oct 11 2018
In further evidence that stocks can rally despite rising Treasury yields, LPL Research found that in all 12 periods of rising 10-year yields since 1996, the S&P 500 ended the period higher than it began, according to senior market strategist Ryan Detrick.
Every S&P 500 sector fell heavily, with big-name technology stocks like Facebook and Apple among the biggest drags on the USA market.
The 10-year Treasury yield remained at 3.20 per cent, about where it was late on Tuesday, after earlier touching 3.24 per cent. JPMorgan 's Jason Hunter thinks we may have seen the worst of the news from the bond market, as recent action leaves him "looking for yields to form a bullish reversal pattern near current levels and define the cheaper end of the fourth-quarter 2018 to first-quarter 2019 range".
Earlier on Wednesday, Sears Holdings plunged on reports that the struggling retailer is preparing to file for bankruptcy.
The Dow's point decline was the worst since February, when the index fell by more than 1,000 - twice.
The S&P/NZX50 was down 2.3 per cent today falling 204 points to 8845.
Stocks are opening broadly lower on Wall Street led by drops in technology and industrial companies. Apple, Boeing, Nike and Visa all tumbled more than 4 per cent, while Caterpillar and 3M lost nearly 4 per cent.
WINNERS AREN'T WINNING: Tech stocks and companies that sell non-essentials to consumers have been some of the top performers over the previous year, almost doubling the performance of the S&P 500.
Traders work on the floor at the closing bell of the Dow Industrial Average at the New York Stock Exchange on Wednesday.
USA crude settled down $1.79 at $73.17 per barrel and Brent fell $1.91 to settle at $83.09. Natural gas rose 0.6 percent to $3.28 per 1,000 cubic feet.
But historically, a monthly move of one to two deviations, or 20 to 40 basis points now, would result in flat S&P 500 returns. Nvidia wasn't spared either as the GPU-manufacturer out of Santa Clara, CA saw a drop of seven-and-a-half percent itself which brings its year-to-date market gain to 33 percent.
USA gold futures settled up $1.9, or 0.16 percent, at $1,193.4.
Gold was flat at $1,191.50 per ounce.
The CAC 40 in France dropped 1.5 percent, Germany's DAX lost 1.2 percent and the FTSE 100 in London slipped 0.4 percent. And right now tech stocks-like the trillion-dollar Apple-have dominated a significant part of the rise in value of the market as a whole. Copper fell 0.9 per cent to $2.78 a pound. And tech stocks got hit particularly hard.
Japan's Nikkei 225 added 0.2 per cent, South Korea's Kospi dropped 1.1 per cent and the Hang Seng in Hong Kong gained 0.1 per cent. Brazil's Bovespa lost 2.5 per cent and the Merval in Argentina sank 2.2 per cent.
The euro and sterling rose, underpinned by optimism for a Brexit deal, while the US dollar lost ground against a basket of currencies even as USA yields hovered near multiyear peaks.
The Japanese yen strengthened 0.53 percent versus the greenback at 112.36.