(New York) The New York Stock Exchange ended in the red on Thursday for the third straight session as long-term bond yields continued to climb.
The Dow Jones index lost 0.84% to 34,474.83 points, the tech-heavy NASDAQ fell 1.17% to 13,316.83 points and the S
Bond yields on 10- and 30-year Treasuries hit 16-year highs in session at 4.30% and 4.40%, already hit in October 2022 when US inflation was raging.
“I didn’t expect ten-year rates to jump to 4.30%. That’s really what drives the multiple down,” said Jack Ablin of Cresset Capital, referring to the price-earnings ratio (PE), or the ratio of a company’s market capitalization to its bottom line.
“The current level of bond yields suggests a PE at 17, but the average ratio of companies in the S
All sectors of the S
The big names in technology have weakened like Apple (-1.46%), Amazon (-0.81%), Meta (-3.13%) or Netflix (-3%).
“Stock markets will remain under pressure until this rise in yields reverses,” the Cresset Capital analyst added.
For Joe Manimbo of Convera Financial Services, the rise in bond yields reflects “positive news from the U.S. economy.” The analyst also pointed to the US GDP (Gross Domestic Product) growth projection for the 3rd quarter by the Atlanta Fed, which was revised up sharply to 5.8%.
“Now we have to wait for what Jerome Powell, the Federal Reserve Chairman, says in Jackson Hole next weekend and whether he sets the stage for another rate hike by the end of the year.” , added the Convera analyst. “If the data continues to be good, it will open the door wider for further upside.”
Listed, shares of CVS pharmacies plunged 8.14% as a major insurance company Blue Shield in California severed its drug supply partnership to turn to Amazon in particular.
Walmart, a member of the Dow Jones, fell 2.24% to $155.69 despite strong results.
The hypermarket chain has revised its forecast for its staggered 2024 financial year upwards in view of the performance achieved in the second quarter, during which its sales increased by 5.7% over one year. The group generated a record net profit of 7.90 billion dollars (53.3% over one year) on a turnover of 161.63 billion.
Telecommunications systems giant Cisco climbed 3.34% after reporting better-than-expected fourth-quarter results and citing market share gains in artificial intelligence-related equipment.
Electric utility Hawaiian Electric plunged 15.84% after reports from The Wall Street Journal that the group was in talks with a consulting firm specializing in restructuring as it faces financial and legal challenges after the deadly fires on Maui Island.
The stock of stock market newcomer VinFast, a Vietnamese electric vehicle maker, which jumped 68% on Tuesday, the day of its IPO, fell back below its IPO level at $20 ( -33.58%).
Strength in energy stocks was not enough to keep Canada’s main stock index from posting a loss on Thursday, due to weakness in technology and other sectors, as US markets also fell.
The composite index S
In the currency market, the Canadian dollar traded at an average rate of 73.94 cents US, down from 73.98 cents US on Wednesday.
