Publicado: Lun, Octubre 08, 2018
Financiera | Por Marilu Caballero

Markets Right Now: Stocks fall as bond yields rise further

Markets Right Now: Stocks fall as bond yields rise further

World markets steadied ahead of U.S. jobs numbers on Friday, as a four-year high in oil prices and the biggest weekly jump in treasury yields since February left investors wondering where to go next.

The increase in USA non-farm payrolls slowed in September, likely from Hurricane Florence's impact on restaurant and retail payrolls, but the Labor Department report also showed a rise in wages that could keep the Federal Reserve on track for more interest rate hikes. That's a good sign for stocks.

Interest-rate sensitive stocks fell broadly while bank shares benefited from the higher rates. Hawkish comments about the United States economy by Federal Reserve Chairman Jerome Powell have also boosted the dollar buying.

"This is a report that's consistent with being pretty close to full employment and it's going to reinforce the Fed's path for raising rates", Alan Krueger, professor of economics at Princeton University, said on Bloomberg TV. That was the steepest daily increase since the shock outcome of the US presidential election in November 2016.

In futures trade today, the S&P 500 is down around 13 points, while the Nasdaq shed around 47 points and the Dow Jones Industrial Average is 104 points lower.

Technology and internet companies and smaller, more US -focused companies continued to suffer steep losses.

The dollar index was flat at 95.786, with the euro softening 0.1% to $1.1508. That was both indexes worst weekly loss in more than six months.

The yield on 10-year Treasuries advanced four basis points to 3.2271 percent, the highest in more than seven years.

The 10-year note is considered a risk-free investment, as the debt is backed by the US government.

President Trump has previously expressed his dismay at China's alleged "theft" of data from USA tech companies, and today's report is likely to add fuel to the fire.

While technology companies and retailers have been the biggest gainers on the S&P this year, they took steep losses this week.

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It was around the time of his disbarment that he got serious about amateur target-shooting, according to the records and posts. Authorities said the shootings happened in Vintage Place, an upscale neighborhood in the western part of the city.

The technology sector .SPLRCT sank 1.2 percent, dropping for the second day in a row. Thursday evening, CEO Elon Musk taunted the Securities and Exchange Commission on Twitter just days after he agreed to settle an SEC lawsuit triggered by a tweet he sent in August.

According to media reports, financier David Einhorn also criticized Tesla, comparing it to Lehman Brothers, which went bankrupt during the financial crisis.

Costco Wholesale dropped 5.6 percent as it disclosed that it uncovered a "material weakness" in its controls on financial reporting. Costco said it hasn't found any mistakes in its earnings reports so far. Stocks began the day higher after the employment data added to confidence in the strength of the American economy. Germany's DAX lost 1.1 percent and the CAC 40 in France dropped 1 percent.

However, the unemployment rate fell to 3.7 percent last month from 3.9 percent, an unusually large drop and the lowest reading since December 1969.

US Treasury bond yields are on a seven-year high, echoing a market correction in February when rising yields of risk-free government debt made equities less attractive and lowered their value. The Japanese yen was little changed versus the greenback at ¥113.89 to the dollar.

Benchmark U.S. crude was little changed at $74.34 a barrel in NY and Brent crude, the standard for worldwide oil futures, fell 0.5 percent to $84.16 a barrel in London. Intel lost 1.1 percent to $47.63 and Netflix lost 2.78 percent to $353.62.

Copper fell 0.3 percent to $2.78 a pound, the lowest in more than two weeks.

Gold futures increased 0.5 percent to $1,207.60 an ounce. It's down 0.9 percent in the week. Copper fell 0.5 percent to $2.76 a pound.

Higher U.S. yields are anything but favourable for emerging markets as they tend to draw away much-needed foreign funds while pressuring local currencies.

The gains were broad based with the euro falling back to $1.1476 after being as high as $1.1593 on Wednesday.

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