By DAMIAN J. TROISE and ALEX VEIGAAP Business Writer
Tech companies led a sharp fall in stocks on Wall Street on Tuesday, deepening the September plunge in the market.
The sale came about because the Treasury’s rapid rise in yields forced investors to reassess whether stocks, especially the most popular stocks, were overpriced.
The S & P 500 fell 1.5% at 3:21 pm EST, but the Dow Jones Industrial Average fell 389 points (1.1%) to 34,479. High-tech heavyweight Nasdaq fell 2.5%. On the New York Stock Exchange, Decliners outperformed Advancers 3: 1.
The pullback lost momentum by late afternoon. Earlier that day, the S & P 500 was moving at the fastest pace since May, while the Dow fell by more than 600 points.
Yields on 10-year government bonds, the benchmark for many types of loans, including mortgages, jumped to 1.54%. This is the highest level since late June, up from 1.48% at the end of Monday and 1.32% a week ago.
Higher yields mean that the Treasury is paying more interest, and investors have less incentive to pay higher on risky stocks and other things than super-safe US Treasuries. The recent rise in interest rates has hit tech stocks particularly hard, as prices appear to be more expensive than many in other markets compared to how profitable they are.
Soaring bond yields spy investors and shrink tech stocks | National News
Source link Soaring bond yields spy investors and shrink tech stocks | National News