(AP)
Stocks were mostly lower on Wall Street as another tick up in bond yields gave investors pause. Wall Street continues to look to Washington, where economic data, comments out of the Federal Reserve and President Joe Biden’s stimulus package remain front and centre.
In early afternoon trade, the The S&P 500 index was down 0.2 per cent The Dow Jones Industrial Average was up 98 points, or 0.5 per cent and the technology-heavy Nasdaq has lost 1.3 per cent. The Australian sharemarket is set to edge lower, with futures at 5.05am AEDT pointing to a drop of 7 points, or 0.1 per cent, at the open.
The Charging Bull statue in New York’s financial district. Credit:AP
Banks benefited from the increase in bond yields, which allows them to charge higher rates on mortgages and many other kinds of loans. The yield on the benchmark 10-year Treasury note rose to 1.48 per cent from 1.41 per cent.
Goldman Sachs rose 2 per cent and JPMorgan rose 2.5 per cent, while Wells Fargo and Citigroup both rose more than 3 per cent. The KBW Bank Index, a measure of the 24 largest banks, was up more than 2 per cent.
“The 10-year yield is saying the economy is going to get stronger,” said Ryan Detrick, chief investment strategist for LPL Financial.
Treasury yields hit the psychologically important 1.50 per cent mark last week, as investors have braced for stronger economic growth but also a possible increase in inflation.
“The good news to remember is there are other groups taking the baton,” Detrick said, adding that technology stocks are slipping while banks and energy companies benefit. “Some higher inflation at the beginning of a new economic expansion is perfectly normal,” Detrick said.
The Australian dollar was sitting at US78.06c at 7:00am AEDT.
