Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

US STOCKS-Wall Street closes down, tech selloff drags as bond yields climb

Published 02/26/2021, 05:00 AM
Updated 02/26/2021, 05:10 AM

* U.S. 10-year Treasury yield rises above S&P 500 div yield
* Best Buy slips on downbeat annual sales forecast
* Weekly jobless claims decline

(New throughout, updates prices, market activity and comments
to close; new byline)
By Gertrude Chavez-Dreyfuss
NEW YORK, Feb 25 (Reuters) - Wall Street's main indexes
ended sharply lower on Thursday, with the Nasdaq index posting
its largest daily percentage fall in four months, as
technology-related stocks remained under pressure following a
rise in U.S. bond yields.
The benchmark 10-year Treasury yields US10YT=RR hit a
one-year high of 1.614%, prompting investors concerned about
rich valuations to lock in profits on some high-flying growth
stocks. US/
The Treasury note yield rose above S&P 500 dividend yield,
wiping out the stock market yield's strong advantage.
"Rates matter. At 1.5%, the yield is comparable to S&P 500
dividend yield," said Peter Tuz, president of Chase Investment
Counsel in Charlottesville, Virginia. "And there's no capital
risk with a 10-year, you'll get your principal back. All of a
sudden it's competitive with stocks,"
Apple Inc AAPL.O , Amazon.com Inc AMZN.O , Microsoft Corp
MSFT.O , Alphabet Inc GOOGL.O , Facebook Inc FB.O and
Netflix Inc NFLX.O all fell.
Despite the broad market slide, GameStop Corp GME.N shares
soared again after doubling in the previous session, triggering
a series of NYSE trading halts and leading a surprise resurgence
of so-called "stonks" championed online by retail investors.
Unofficially, the Dow Jones Industrial Average .DJI fell
561.36 points, or 1.76%, to 31,400.5, the S&P 500 .SPX lost
96.12 points, or 2.45%, to 3,829.31 and the Nasdaq Composite
.IXIC dropped 478.54 points, or 3.52%, to 13,119.43.
The S&P 500 technology sector .SPLRCT fell, as did
communication services .SPLRCL , among the sectors that powered
the market's rally in 2020.
The S&P 500 growth index .IGX is nearly unchanged in
February, sharply underperforming the value index .IVX , which
has gained more than 7% on optimism related to a post-pandemic
reopening of the economy.
"You've had an equity market that's hit record highs many
times this year and it's expensive relative to historic norms,"
said Chase's Tuz. "We were primed for a sell-off."
Meanwhile, data showed fewer Americans filed new claims for
unemployment benefits last week as COVID-19 infections fell, but
the near-term outlook remained unclear after winter storms
wreaked havoc in the South this month.
Optimism about more U.S. stimulus and a quicker pace of
vaccinations at the beginning of the month have positioned the
Dow Jones .DJI index for its best monthly gain since November.
However, the lack of significant new developments around the
fiscal package and the winding down of the earnings season have
caused uncertainty.
"In the beginning of February, the stimulus news was the
driving force but now that it has been priced in, there is
nothing on the distant horizon for equity investors to be
excited about and there is a concern that upside is limited,"
said Mike Zigmont, head of trading and research at Harvest
Volatility Management.
Tesla Inc TSLA.O fell after a media report that the
electric-car maker told workers it would temporarily halt some
production at its California assembly plant. Moderna Inc MRNA.O jumped after the drugmaker said it was
expecting $18.4 billion in sales from its COVID-19 vaccine this
year.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.