US stocks closed lower Wednesday under the weight of higher yields in the bond market. The 10-year yield rose to 4.61% from 4.54% late Tuesday following an auction of $44 billion in seven-year Treasurys, the AP reports.
- The S&P 500 dipped 39.09 points, or 0.7%, to 5,266.95 and fell further from its record set last week.
- The Dow Jones Industrial Average lost 411.32, or 1.1%, to 38,441.54
- The Nasdaq composite slipped 99.30, or 0.6%, to 16,920.58 after setting its latest all-time high a day earlier.
American Airlines Group led a slump for airlines after cutting its forecast for profit and other financial targets for the spring. It fell 13.5%.
ConocoPhillips fell 3.1% after it said it would buy Marathon Oil in an all-stock deal valuing the company at $22.5 billion, including $5.4 billion of net debt. Marathon Oil rose 8.4%. Advance Auto Parts sank 11% after its results and revenue for the latest quarter came up just shy of analysts' expectations. On the winning side of Wall Street was Dick's Sporting Goods, which jumped 15.9% after topping analysts' expectations for profit and revenue in the latest quarter. The retailer also raised its forecast for profit over the full year. Chewy, an online seller of pet supplies, likewise reported stronger profit for the latest quarter than expected, and its stock jumped 27.1%.
Higher Treasury yields hurt prices for all kinds of investments, and they can pack a particularly hard punch on stocks of utility companies. When bonds pay more in interest, they can peel away income-seeking investors who might otherwise buy those stocks for their relatively big dividends. Utilities in the S&P 500 fell 1.4% as a group for one of the worst losses within the index. This month's swings in Treasury yields have also come as traders recalibrate their expectations for when the Federal Reserve could begin cutting its main interest rate, which is at its highest level in more than two decades.
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