Wall Street Drifts, As Even Treasury Yields Slow Their Rise
The S&P 500 was 0.3% higher after flipping between small gains and losses in early trading. It remains close to its record high set at the end of last week. The Dow Jones Industrial Average was up 48 points, or 0.2%, at 31,117, as of
“What we saw starting on Monday is just some exhaustion on part of the rally,” said
Markets around the world have rushed higher recently on building optimism that a healthier economy is on the way because of the rollout of coronavirus vaccines and the prospect for more stimulus from a
Some of the biggest action has been in the bond market, where expectations for increased federal borrowing, economic growth and inflation have pushed longer-term
The yield on the 10-year
The concerns are reminiscent of the 2013 “taper tantrum,” when markets tumbled after the Fed said it expected to slow bond purchases as the economy recovered.
Low rates have been one of the main underpinnings for the stock market’s rise to records, even as much of the economy still struggles under the worsening pandemic. The 10-year yield has been spurting higher, up from 0.90% on
If interest rates keep climbing, it could bolster the argument for critics of the stock market, who say it has climbed too high and left prices too expensive.
Stocks that would benefit in particular from low rates were leading the way in Wednesday morning trading. Utility stocks tend to pay relatively big dividends, so their appeal often rises when bonds are paying less in interest and drawing fewer investors seeking income. Utilities rose 2% for the biggest gain among the 11 sectors that make up the S&P 500.
Tech stocks also climbed, as low interest rates help make investors more willing to pay high prices for their expected growth. Within the group, Intel jumped 7.4% after it said industry veteran
On the losing end were some of the market's biggest winners recently, which have climbed with expectations for a stronger economy and higher rates. Raw-material producers in the S&P 500 fell 1.2%, while industrial stocks fell 0.7% and financial stocks lost 0.3%.
Stocks of smaller companies also pulled back from their big recent rally. The Russell 2000 index of small-cap stocks slipped 0.3%, though it remains 7.4% higher for 2021 so far. That towers over the 1.4% rise for the big stocks in the S&P 500.
Other risks are also hanging over the market, headlined by the worsening pandemic. Accelerating coronavirus counts and hospitalizations are doing more damage to the economy, and
Political uncertainty continues to engulf
Investors have been looking past such political turmoil for the most part, though, focusing instead on expectations for a stronger economy ahead.
President-elect
In European stock markets, indexes were also making only modest moves. The German DAX returned 0.1%, and the French CAC 40 added 0.2%. The
Asian markets were mixed. Japan’s
AP Business Writer
Top Asian News 7:24 a.m. GMT
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